Cambly's founder raised $60M+ from Bessemer and Benchmark after a failed Series A in 2017. He turned the company cash-flow positive in four months, which made investors who'd rejected him suddenly eager to back it. The lesson: the less you need money, the more investors want to give it to you.
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You did, you did mention, you know, raising from some pretty amazing investors like Bessemer and Benchmark, and, you know, kind of 8 years of not announcing. So could you share a little bit more about, you know, that, that journey, maybe kind of going back to, you know, your earliest rounds and what it was like?
Yeah, it wasn't easy. It definitely wasn't always easy. You know, I've, I've attempted to fundraise several times and succeeded, you know, a handful of them as well. And You know, my personal experience is like, it kind of goes one of two ways. Either it goes like super smoothly and super well, or it is painful, it drags out. And in my experience, it like often doesn't get done in that scenario, or at least I say like, hey, it's no longer worth it. And so, you know, I actually end up talking to a lot of founders about fundraisers and like, you know, I You know, I think again, I'm one data point, and so I talk about my own experience, but I really like to have the company be in like a really, really strong position for a fundraise. Like, I like to fundraise when it's easy, not when it's hard, basically. And so that might be a function of how the market is doing. It may be a function of like where the business is at the moment, but it can be such an uphill battle and I've fought some of those uphill battles and then eventually been like, never mind, I'm not going to fundraise right now. And then I've also had experiences where it just come together really smoothly, really like my dream investor. And so I think focusing on the traction of the business, just really being heads down and being like, how do I make this business so compelling that you'd be crazy to say no. Canopy's also been cash flow positive for the last 5 years. And that was something that we got to not necessarily by choice. Our hand was forced. Like, we went out to raise a Series A in 2017, and it did not go as planned. We did not get the reception we were expecting. And that was pretty stressful because we actually weren't in a great position at the time. We were burning a decent amount of cash. We didn't have a lot of money in the bank. And we basically had— we brought the team together and we're like, hey, we were going to raise a Series A. It didn't work. Here's Plan B. And Plan B is we're going to get the company to cash flow positive. And it was an intense and highly focused, you know, period. But over the span of 4 months, we took a company that was burning a lot of cash, not a lot of the money in the bank, to a company that was cash flow positive. And then, like, a year later, we went back to a lot of those same investors that had said no in 2017, and we basically had grown the business a ton without any external capital. We'd basically done what we said we were going to do if they gave us money without the money, and it was super compelling. And so we ended up getting 4 term sheets for the Series A, and And they were all people that had passed in one form or the other a prior year. So it's just like, it was such a different experience that I guess one, I was like, cool, it's really nice to fundraise from a position of strength. How do you put the company in light? And these investors are smart people. Like, you just make a better company and they're more likely to be interested. The less— irony is, the less you need the money, the more likely they're going to want to give it to you. And so I just tend to focus on those things and And we've kept the company cash flow positive ever since. And so I think that makes the fundraising a lot smoother in my opinion. And that was one attempted and sort of failed fundraise, but we had previous ones as well where, yeah, it kind of, for me, it sort of went one way or the other.
