Namely, the people management platform in use by media companies, ad agencies and ad tech firms, announced today that the company has raised a $3.35 million Series A round of financing. The round was led by True Ventures, the San Francisco-based venture capital firm. We recently spoke to Matt Straz, Founder and CEO of Namely, on how the company was able to raise funding in a challenging environment.
The Makegood: There is currently a Series A “crunch” where startups are having trouble getting their next round of funding. Why is this happening?
If you want to scale a startup quickly, achieving a Series A raise from a venture capitalist firm can be useful. The issue is that only 86 VCs made investments in 2012 and there are thousands of startups being founded each year. So the odds of a startup raising a Series A round from VCs are very low—perhaps less than 1 in 10.
The Makegood: So how were you successful with your raise?
There were a few factors. First, we developed a product that customers seemed to like and were willing to pay for. Revenue is important to most VCs. Second, B2B SaaS companies focused on the enterprise are attractive investments right now. Third, I met with a lot of firms. You need many good intros and meetings to increase your odds of success.
The Makegood: How long did it take to raise the money?
From the first formal VC meeting to having money in the bank it took about 90 days, which is pretty fast. But the raise was the culmination of 17 months of hard work. Our engineering, customer service, sales and marketing people got us to the point where I could raise funds thanks to their tireless effort.
The Makegood: What is it like to raise money for a startup?
The process can be difficult, even for the most seasoned entrepreneur. Founders love their startup, otherwise they wouldn’t be dedicating their life to it. VCs, on the other hand, get pitched a lot. They need to say “no” 99% of the time, even if they like you or your idea. Sometimes the timing is wrong, other times they can’t get all of their partners on board. There are a hundred possible reasons for a VC not to move forward.
Fortunately, in our case had multiple firms that wanted to invest and were able to choose the one that was the best match for our vision and culture. We intend to spend the next decade building Namely so fit was really important. We’re really excited to be working with Phil Black and Adam D’Augelli at True Ventures.
The Makegood: How will this investment help your company?
Money equals time for a startup so this investment enables us to complete our product roadmap and add to our core team. We’re excited to build a significant enterprise technology company right here in New York with some great partners.
The Makegood: Thanks, Matt.