[propter_hoc]

> This summer, the wind started to turn. We witnessed stronger open-source traction, our revenue increased dramatically, and VCs became more insistent. It was time for us to open a new chapter for the company and raise a series A round.

Rhetorically, why was it time for this?

Practically, the answer is right there: the VCs wouldn't accept a mere rapidly-growing company with great tech. It's either an up round so they can mark up the value on their portfolio, or if the market isn't hot enough for a high-priced Series A, force an exit.

[maccard]

> why was it time for this? Practically, the answer is right there: the VCs wouldn't accept a mere rapidly-growing company with great tech.

Remember that this is a decision you make when you accept the seed money, not when it comes to looking for further money. If you want to build a profitable growing company, bc funding is not the path to that.

[satvikpendem]

Depends, if you have a majority on the board you can do whatever you want. Some companies get a seed round to then use that to bootstrap to profitability and growth over time.

[bomewish]

Practically, what happens if the founders don’t want to play ball? VCs can muscle up and force a sale on worse terms? Just not clear how much of what goes on is asking nicely vs coercion, and where the actual leverage lies.

[maccard]

It’s going to depend on what the terms you agreed to are. In my experience, the company leadership are free to suggest an alternative to the hyper growth plan, but the board (which you likely won’t have a majority on) will reject it. VC’s don’t care about recouping money, they’d rather you fired everyone, pivoted, and started again and tried again with the money you have. They want successful exits, not break evens. It’s not about money it’s about reputation.

If you suggest something they don’t like, they’ll stall until you run out of money, or force you out.

[fulmicoton]

Our seed round was 100% made of SAFE, so VCs did not have the power to force us to do anything.

The sentence in the blog post is a tad misleading. I suspect François is not really talking about VCs that had already invested in quickwit, but about the usual flow of other VCs who contacted us, to know about the company and be part of our eventual series A.

It just generally felt like we were "at a crossing".

No one twisted our arm.

[propter_hoc]

Thanks for the clarification, and sorry for jumping to an incorrect conclusion based on vague wording. (I would edit my comment accordingly but I can't anymore.)

[Rastonbury]

You're a founder who raised seed and now appear to be hitting PMF and making repeatable sales, won't you raise A to scale?

[propter_hoc]

Is that a rhetorical question, or aimed at me specifically?

Regardless, in my case, it's not my first rodeo; I didn't give up any board seats or majority control. I mostly raised from angels that I know personally and trust me. And we're a high-margin B2B business (apparently similar in those limited respects to Quickwit) so I don't feel particularly capital constrained without raising additional rounds.

So I don't have a board pushing me for "valuation events." But I am very familiar with this toxic dynamic from my previous experience.