Raising $76M for Partnership Tech, How it Happened and What We Learned
In this episode of SaaS Connect by Cloud Software Association, we’re joined by Cory Snyder, VP of Sales and Partnerships at Maropost, and Bob Moore, Co-Founder and CEO at Crossbeam. Crossbeam raised $76 million for partnership tech, even though it had not written a single line of code yet, nor did it have any customers. Crossbeam, founded in 2018, helps companies build more valuable partnerships; it’s essentially an Escrow service for data. On this show, Bob talks about: Why raise money? It depends heavily on the nature of the business you're building, the amount of capital risk that exists, how big it gets if it all works, and so on. Evolution of partnerships and how they looked 10 years ago. Crossbeam’s mission and the background to its story of raising $76 million. The different formats for raising money other than Silicon Valley, the hybrid hedge fund, or bank debt: The least-diluted form of capital is revenue; if you can just sell more of your stuff and operate your business profitably and have more profits, then you don't need any outside funders. However, in technology markets, where there's often a lot of upfront investment and building that needs to happen before you can deliver value, this is very hard to do. Different flavors of debt, depending on the stage of the company. ARR financing, which is a special kind of debt. Equity financing, such as giving special rights to the investor. The investor would have a lot of power, so it’s important to choose the right person. Angel investors; a big chunk of Crossbeam’s capital came from individuals like CEOs, founders, and people that sold their companies and wanted to write a check anywhere from $10,000 to $1 million because it's part of their personal financial strategy to invest directly in startups. Corporate VCs who have a strategy, but come with pros and cons. Who contributed to the $76 million that Crossbeam raised, and what made them go with Crossbeam. Seed rounds and the process. Risk factors that investors take into account. The story that sells in the seed rounds, especially in growth spaces where deals are competitive. Resources Mentioned: Silicon Valley Bank Comerica Hercules Capital Tiger Global Salesforce Ventures HubSpot Ventures RingCentral Ventures Octave Ventures Buckeye First Round Capital Firstmark Services Redpoint Ventures Andreessen Horowitz Josh Koppelman Venn diagram Thank you to our amazing podcast team at Content Allies. Want to launch your own B2B revenue-generating podcasts? Contact them at https://ContentAllies.com