I am confused about the dates. If they are doing $3.6M revenue run-rate, that means revenues are $300k/month. Why bother wasting the time to raise what amounts to 6 weeks of earnings?
This is correct, we had a $150k run rate when we raised (and pitched with this deck) and the $3.6M figure was a projection (and clearly one which was rather ambitious!).
I was confused by that, too. I am sure it made sense in the context of their pitch (due to WHEN it was made), but the "milestones" slide didn't indicate which items had occurred vs were simply goals.
Did you hit timing issues with fundraising? Something I see coming for me is that I want to start generating revenue before actually getting funding (as Buffer did), but I can't afford to fully surrender a substantial income during the transition from dayjob+startup to allstartup. Ah, to be in my twenties and happy with ramen-profitable again...
At any rate, I want a fairly tight window between getting the revenue stream started and getting funded enough to make a living and hire more people. Any advice for keeping the size of that window down?
My best advice is not to drop your work for as long as you can
until you see traction. In our case, Joel only stopped working after
we hit ~$1k in monthly revenues.
(read: http://joel.is/post/6687368692/startup-bootstrapping) and I
only dropped out of College a lot later after Buffer actually had
already received funding and was supporting a team of 5.
I think the key might be to only drop your work once your
revenues are enough to support you. So I would try and make that
window almost 0, in our case working nights and weekends is a
great way to get there.
Thanks, that's very helpful! Much of my problem is that I'm coming into this as a full-fledged grownup - twenty years in the industry, two college-aged kids, mortgage, car payments, etc. What cushion I have is my retirement money, and my spouse will only let me burn just so much of that before she loses patience. I could maybe get a few months of pure bootstrapping in, but the drop from a six figure income to less than minimum wage is very steep indeed.
Right now, it's 20+ hours a week on the startup in my "copious spare time". What worries me is the pain waiting for me when the rubber meets the road... the support time and emergency fixes needed when I have real, paying customers. That's when the conflict between dayjob and startup will truly loom large.
But what the hell, I WILL make it work. I'm done with working for other people. I've already signed my Declaration of Independence, but if I want my freedom, I'm going to need to survive my Valley Forge as well.
I too was doing my startup part time for about 6 months before we were admitted into an accelerator. I am currently working FT on my startup. But my personal situation is completely different than yours (no kids, no debt, no house, low cost of living state, cars all paid, spouse working ..) . Take baby steps every day and you will be surprized how much you can accomplish in few months. Be consistent about it and you should be good.
On the plus side, my wife has a high-paying IT job as well, so we won't starve immediately. And I'm kind of boggled at how much I've managed to build, effectively solo (legal help only), in the past six months. But I have another six before it's really money-ready, I think.
I like the takeaway that the only slide that matters is traction.
Looking at the Team slide, they have a decent amount of social validation from their advisors & previous investors. I'm guessing this was critical for getting the intro's to ~200 prospective investors.
We went through AngelPad (accelerator in SF) just before we raised, and through the program we received our initial $20k funding from AngelPad and $100k convertible debt funding from two VC firms associated with AngelPad (so a total of $120k as soon as we got into AngelPad). We then raised a further $50k from another firm (Inspiration) during the program before demo day and before we started pitching. So that is the 4 logos you see as previous investors. We also were lucky to get Guy and Hiten on board as advisors during our time at AngelPad. This social proof certainly helped us a lot, however it all happened very close to our pitching and so it is not too comparable to a true "previous financing". Hope that helps - let me know if you have any more Qs.
I was able to chat with Joel a few weeks ago (he has open office hours over skype! Talk about awesome) and I really think Buffer is the next SEOmoz-like company that does things the right way and shares along the way.
We're still not too "smart" about our scheduling. We have a few things planned down the line in our roadmap though.
What we found was that if we can help someone go from sharing once a day to 5 times a day, that would help them much more than if we were to assist them in sharing that 1 post at exactly the right time. That's why we've kept much more on the side of pushing forward with integrations and simply making it easier to add content to Buffer rather than working too much on the intelligent sharing.
