A few days ago we announced that we've successfully raised $1.65m as part of our seed round. VentureBeat did a nice review our current flagship feature (HearHere) and broke the news of our funding. Thanks, Matt.
This is my first time out as an entrepreneur and one thing I've learned is that raising money, even a smaller seed round, can be very time consuming. As much as you would like to think it doesn't impact the core business - it really does. There is no doubt that the time I spent raising money had a minor negative impact on the business. That is the paradox for start-ups - you need capital to build your business but you can spend so much time focused on raising capital that your business suffers. I'm thrilled to have this behind me and to once again turn my full attention to the business (product development, hiring great people, responding to customer emails, talking to partners, etc.). As one of my angel investors, Brian Magierski, always told me, "The goal isn't raising money. The goal is building the business. You just sometimes need capital to get there."
We actually didn't try to raise $1.65m (which is a healthy amount for a seed round). Initially we were looking to raise a much smaller amount, but there was so much interest in what we were doing and we believed that we could accelerate our progress by taking in more capital. However, it wasn't just about the money. It was about the people. We were incredibly fortunate to have such an incredible group of technology and business leaders as investors in Pluggd and available for guidance and advice.
We also didn't expect to have Intel Capital participate in our seed round. This is quite unusual for them to do. Initially, we only spoke to Matt Gordon (then at ICAP before joining Microsoft's IP group) because he was friends with one of our lead angel investors. He thought Matt might know other angels and have some good feedback on what we were doing. In the end, Matt liked what we were doing enough to mention it to some of the other folks at ICAP...and things just went from there.
One thing I've learned is the importance of having some lead investors who can give you credibility in the community. You need someone to stand up and say "these guys are credible and I'm putting my own money in." Perhaps these folks should be called "Archangels" because they really do play a key role in leading a group of investors. My "Archangels" were Scott Oki and Bill Bryant. I will always be extremely grateful for their support and belief in me and Pluggd.
Anyway, we have a ton of work to do. Afterall, raising money isn't the goal.