Adding more believers
May 20, 2024
Coming out of this year, we had forecasted that we'd have $[ ]M left in cash in the bank by the end of the year if we just hit our numbers and with a clear line of sight to profitability without needing to raise. With revenue coming in $[ ]K+ above plan just four months into the year, it's looking like we would have given ourselves even more runway just based on our own performance alone. Still, we always want to be in a position of strength when it comes to cash and the board clearly felt the same way so they preempted us with a term sheet for a convertible note to help bolster our cash balance just in case things don't go exactly according to plan.
This was not a simple convertible note to raise as it doesn't quite fit the profile for many investors right now. Our valuation is too high for angel investors as their potential multiple on returns are lower (e.g. potential returns at a $[ ]M pre-seed is very different from an $[ ]M Series B). The amount we're looking to raise in this note is too small (as it should be since we want to be mindful of dilution) for VCs who generally want to own several percentage points of the company, in which case they'd want to invest multiple millions. There were no shortage of VCs this time around who were interested in taking a deeper look if only we were able to take a $5M+ check.
Despite all that, I'm excited to share that we've added over $[ ]M to our balance sheet as a result, with not just the board stepping up but two new investors as well who are joining us on this journey. One is a family office that has been following our story for quite some time through one of our existing angel investors. The other is a quantitative trading firm similar to the likes of Susquehanna, who is already an investor and board observer. As we evolve the business to add on the exchange component, having two institutional investors with deep experience in this space will be instrumental in helping us strategize on how we bring this to life.
We are adding more believers and supporters who want to be a part of our story and giving ourselves plenty of runway to get to profitability and beyond. Let's make them proud.
