When a little funding goes a long way
- July 15th, 2008 /
Charlie O’Donnell has a good summary of the big lesson from the Twitter – Summize acquisition confirmed today, and how $750,000 in funding helped Summize leap Tweetscan as the leader in the Twitter search space and get to the sale to Twitter.
So, when your investor is having this kind of smart conversation with an investor in one of your likely acquirers, you’re at a HUGE advantage. This isn’t someone pitching your company to get flipped–this was some pretty high level thinking (and outside the valley thinking, I might add).
So while you’re protecting all your equity from those big bad investors, ask yourself the question of who’s having these types of conversations with key decision makers and thinkers about your company. “Who’s a lot more experienced than I am that thinks intelligently about my company’s strategy–and cares about it?”
THAT’s the kind of investor that makes the rest of your equity worth multiples of what it is the moment they take their 20-30%.
The lesson: Early mover advantage doesn’t alway pay off if you can’t sustain your infrastucture due to lack of capital.
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