Well it’s finally official. Imagekind closes its $2.6 million Series A. As was reported in the Seattle PI, we took a rather unorthodox approach to this fundraising. Specifically, we started out thinking we weren’t going to raise any money at all. We managed to build the initial platform very quickly and without a large cash infusion. When people started calling and we could see that there was external interest we began to think very hard about our long term strategy and what we thought we needed in terms of partners and finances to really take the company to the next level. It was easy to see how venture funding could help us accelerate our growth plans.
On the other hand, I’d raised money before in a previous venture and I knew how time consuming and distracting fundraising can be. Just hitting our product milestones left little room for sleep and recreation. The usual program involves spending hundreds of hours toiling over an executive summary and a powerpoint deck and then scheduling meetings and giving pitches. Lots of pitches. Most of them don’t go anywhere. And while you’re out of the office your team is doing the best they can to move forward without your help and guidance.
This time, I decided to take an entirely different (and risky) approach. All those hours refining powerpoint decks, setting up meetings and re-explaining our business were to go into the product. The good news was that I knew something that wasn’t entirely clear to me five years ago. Venture capitalists are out there pro actively looking for good products and good teams to invest in! Imagine that. So we kept our heads down and kept developing. We kept refining. We kept perfecting. And our membership and revenue started to grow accordingly. People started writing nice things about us in their blogs. A little bit of buzz started to build.
And then one day the phone rang. An interested investor! Then the phone rang again. Since we weren’t interested in raising that much money it wasn’t long before there were more phone calls than there were dollars remaining to be raised. At this point it became an issue of choosing the right investors that could really add value to our organization. We wanted people who understood our business very well and the challenges we were to face. We wanted people who had global (international) experience because we believed from the beginning that we could find advantage in markets outside North America.
Focusing on the product wound up being the right decision for us. However, the investors made it very clear that while they loved how much adoration we receive from our membership base, the investment was still about the team. The investment is about YOU. They needed to know that myself and the team were the right strike force for this task. There is a lot of looking each other directly in the eye…trying to understand one another. There’s a lot of personal questions like “why are doing really doing this?” Or, “what is it that you want out of this?”
At the end of the day our decision came down to the people. We really liked the people. Holtzbrinck made a positive impression on us and vice versa.
Other investors included:
· Crosslink Capital, investors in TiVo, Omniture and Pandora
· Erik Blachford, former CEO of Expedia
· Tom Hughes, the co-founder of Photodisc (now Getty Images)
· Samwer-Brothers, the founders of eBay Germany, MyPhotobook
· Nick Hanuaer, Founder and Chairman of aQuantive, and Second Ave Partners
· Bill Trimarko, President of Larsen-Juhl, largest framing manufacturer
