As I've said before: The fact that people "celebrate" a funding event is really bass-ackwards when you think about it.
It says that the company couldn't figure out how to grow without bringing in a bunch of financiers, who have a low hit rate (3 go north, 3 go south, 4 turn into the living dead), who provided negative 10 yr returns even with Google in the portfolio, and who take 2-3% + 20% of exit from their own investors.
Definitely an excuse to drink, but not for reasons of celebration.
Practically all the most successful tech companies have raised outside funding. If raising money is a sign of lameness, then for some strange reason the most successful startups all seem to be the lame ones.
Honestly, you should be ashamed of yourself. The Songkicks have worked hard. This is a big milestone for them. And you are pissing all over it without knowing anything about them, just because this news happened to trip some idee fixe you're in the grip of.
Did I get wrong 1. hit rate, 2. negative IRRs or 3. the take?
> Practically all
But not all.
The challenge isn't to get funded. The challenge is to find a VC who can improve your valuation by more than the percentage they take. Finding that is worth celebrating.
And considering that their IRR's are negative (they're not even making money for their limiteds), which VCs would that be?
Series B investment is a lot different from "should I bootstrap or not" in the early stage. I think there are a whole lot more people who can work without salary for a year or two, and maybe dump a few hundred thousand of their own money into a business, getting it proven and to profitability, than there are people who can take a successful business, see great metrics, and decide to invest a spare $10mm in taking over the world.
It's useful to argue against VC financing as a "requirement" for early stage businesses (even though it helps a lot of businesses) mainly because it removes an excuse from people who can't raise money (by being in the wrong place, whatever) starting now.
There's very little point in arguing for or against Series B and later funding -- by that point, you either have a business or you don't.
That is completely false. The most common reason companies raise VC money is so they can grow at a faster rate than they could without funding. If you have a business where X dollars invested in customer acquisition equals X+Y dollars in revenue but your revenue lags your customer acquisition by 6-12 months then you should go raise all the money possible given the size of the opportunity you are pursuing. Focusing on near-term profitability is not always the right decision.
Counting the PhDs at Songkick is interesting. Excessively smart people who are passionate about the problem domain (and luck) seems to be the only way to make up for the structural problems in the music industry.
I can't work out why jpdoctor is so down on this, but each to their own.
