According to the wikipedia definition of Fund. A fund is the act of providing resources, usually in the form of money or other values such as effort or time, for a project, a person or a business, or any other public or private institution.
Consolidating the UniversidadQuantum project is what keeps me busy and has kept me busy over the last few months. When we started in 2012, I counted on development going faster, so that by the beginning of 2013 we could have launched from scratch with the effort of the team alone, without needing investors.
But when you start a project of this size, the number of factors that depend on each other is not only large, it is also fundamental to building a solid structure. We started with a vision and something more than a prototype, also with content of our own. What was still missing was making it known to users, creating a solid user base and making the project economically viable.
Paul Graham, founder of the well known incubator YCombinator, spells it out magnificently in his article http://www.paulgraham.com/growth.html, pointing out that if there is one thing that sets a startup apart from a small business, it is its growth.
And Paul Graham knows what he is talking about. Look at some of the companies that have gone through YCombinator: Reddit, Clustrix, Wufoo, Scribd, Xobni, Weebly, Songkick, Disqus, Dropbox, Twitch, Heroku, Airbnb, WePay, Bump, Stripe, CarWoo, Hipmunk, PagerDuty, Pebble, Meteor, Rap Genius, Codecademy, and many more.
And this growth, above all at the beginning, does not have to come from revenue alone. It can be measured by the steady increase in the number of users, or by the development of the product or service.
All of this is something I had been seeing for a while, and it was not happening in our case. Last week, though, I had several meetings.
The first one was with the technical team, where I put on the table where we were failing: the Vision, the Commitment or the Skills of the team. By the end of the meeting it became plain to me that everyone felt we had reached the limit with the way we had been working so far, either because of the time some members can put in while juggling their jobs with their collaboration on the project, or because of the slow development.
The second meeting was with Danny King, founder of Accredible, over a G+ videoconference. Danny was kind enough to spend an hour with me and share his experience of these last few months, moving from the UK to Silicon Valley to get his project funded. Accredible and UniversidadQuantum have things in common: the vision that education, and the accreditation of what a person knows, can be done differently, so that people can make the growth and the change they want in their professional careers.
These are some of the lessons he shared with me:
The funding culture in Silicon Valley is very different from what it is in Europe. Even very different from the east coast of the United States. In the Valley they invest constantly and they know that many startups end up failing. They take the risk.
The equity that investors ask for in Europe is larger for a smaller amount invested.
The most important things in a startup, in this order, are: the Team, the Vision and the Traction. Traction can be, for example, a user count of around 100,000.
Looking for funding is a full time job.
Even if you are looking for funding, keep the focus on building and improving your product.
Read Paul Graham’s article: How to Raise Money
Read this book three times: Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist
Delay the “valuation” of your company as much as possible
Use convertible notes as a way to get investment before an A round of investment. This lets an investor put money in without having to value the company yet, since that would affect the later investments. The investor or business angel can then get some kind of discount for the risk of being one of the first investors
Going slowly can be a good thing if the courses we are developing end up of higher quality. (Our vision is to follow in the footsteps of Udacity with resources in Spanish, and to be more than a course aggregator by contributing original courses and training of quality)
All that is left to say is that I had a third meeting, which is worth an article of its own. Right now, though, I am facing another key moment. To speed up development we have to change many things: how the team works, the development of the platform and new courses, the search for investors. I will keep you informed. If you have anything to add, do not hesitate and leave a comment.