Focus on the scarcer side of your marketplace first, the other will follow. You don't need hyper-growth to build something life-changing. After each funding round, keep three options open: profitability and independence, ability to raise again, or becoming an attractive acquisition target. High valuations and preference stacks can kill acquisition deals.
Chapters
Do you have any specific tips maybe for earlier stage marketplace founders here that might be helpful? Yes, certainly. I think again, one of them is think about which side of that marketplace is more scarce and figure out how do you get more of those individuals involved because the others will generally fast follow actually on their own. You know, again, in our case, if we've got more customer demand than we can possibly handle, then we're not gonna have any problem going out and hire technicians. You know, Uber's deal was drivers, right? They knew if they had drivers on the road, they're gonna get riders. The other, the inverse was not necessarily true. So that is certainly one. I think secondly, if most of you guys have launched your businesses in the last few years, we were all drunk on capital in the last few years. And for better or worse, some people took advantage of that. Some people didn't take advantage of it. And some people are now actually, they're now feeling the negative effects of perhaps, you know, that environment. And so, you know, marketplaces do generally require a, in order to achieve like, you know, the big billion-dollar outcome that certainly VCs want to achieve, like it does require a pretty material amount of capital. But what I would tell you is you don't necessarily, you know, not every business necessarily is well suited to achieve that type of scale, and that's okay. You can still have an amazing life-changing outcome for yourself and for your team without necessarily achieving that level of scale. However, your capital strategy definitely will have a significant influence on the path forward. And so, you know, I think as you think about fundraising, I think that you should approach every single round as if it's going to be your last round. And furthermore, you know, by the time you— if you raise capital, by the time that you deploy that capital, You should have optionality and you should have 3 options. You should have optionality to get profitable and continue to control your own destiny. You should have optionality to raise additional capital, and you should have optionality to ideally also be acquired through, you know, through some strategic acquisition. That becomes increasingly challenging the more capital that you raise, the higher valuation that you've set, because some acquirers just aren't going to They can't afford to cover your $50 million preference stack, nor are you going to see any money in your $60 million acquisition if you raise $50 million, for example. Again, just a hypothetical. So those are a few quick points of advice that I might share, but happy to answer any other pointed questions.
