When we first started our company, raising a million dollars felt impossible. Sure, we read about it every single day on Techcrunch but the path that those startups took to get funding was a mystery to us. I know we aren’t alone here, when you’re first starting a company, you dream of raising a million dollars, getting an office and hiring the initial team. It feels impossible in the early days, or at least it did to me.
Fast forward two years later and we had over a million dollars in our bank account. We had raised a little more than $400,000 going into Techstars and after demo day we set out to raise a $500,000 round, which we over-subscribed and quickly found ourselves at $1,000,000.
It was a surreal feeling, I took a screenshot of our Chase bank account with over a million dollars in it – wow. If/when this happens to you, it’s easy to feel like you’ve made it. That far off goal that you dreamed of happening one day actually happened. You’ll quickly realize that it is actually the exact opposite, this is where it starts to get really hard.
Fast forward to today and I can tell you there is a lot I wish I knew before we raised our first million. Unfortunately I don’t have a time machine, and if I did I wouldn’t go back to that specific time, I’d go somewhere cool like ancient Egypt – wouldn’t you? What I can do now is share what I wish we knew before we raised our first million, so let’s dive in.
Here’s what I wish I knew before we raised our first million.
- Hiring is hard and takes longer than you’d expect and you’ll likely do it wrong at first. I thought that we’d be able to scale our initial team within a month or two after raising our Seed round. I was very wrong. It took about six-months in total and included hiring and firing someone who we should have never hired in the first place. If I were to do it all over again I would have started interviewing a lot earlier, and asked for a lot more advice from other founders that had done the same, so that when the money hit we could put it to use and put our foot on the gas right away. (Want to learn more about hiring? I highly recommend this article by Mark Suster)
- Titles matter to people a lot more than you’d think. When we started our company, everyone told me, titles don’t matter – don’t worry about them, all that matters is that people work well together and get shit done. So, early on we gave people bigger titles than what they had at their previous job. This back-fired, we gave an individual contributor a manager title and literally the next day her attitude changed. Within a week she had moved a huge chunk of her work onto our junior developer. The same thing happened with another early hire. We gave him a Director title and things changed, quickly, and not in a good way. Titles do matter, they might not matter to you, but they do to the people you hire so don’t just give away titles, people should be qualified for, and earn, the titles they get. (Want to learn more about titles? I highly recommend this article by Marcela Sapone)
- You likely don’t need all those advisors. A lot of people told us that our company would look better to investors if we had a badass advisory board. So by the time we raised our first million we had half a dozen advisors. Now I’m not saying there’s anything wrong with having advisors, but unless you have clear goals and deliverables they are just another vanity metric. After raising, I realized that we could benefit from having some advisors but we had to really find a need first rather than just picking advisors that were people we liked and we thought would look good on a slide deck. (Want to learn more about advisors? I highly recommend this article by Jason Calacanis)