Unbelievably Tile raised almost $2.7m! And this was in the middle of 2013. What we find fascinating this was the key part of their main fundraising plan AND that they managed to persuade the customers to pay in advance for the product.
Crowdfunding is no longer a fun distraction in Venture Capital for amateurs. It is a serious part of the funding process that creates a number of new opportunities for entrepreneurs. Even more importantly it represents a way for VC companies to reduce the risk in the early seed stage. The funding partners that entered the financing with Tile after their Crowdfunding campaign had an investment opportunity that was considerably lower risk.
Here I have summarised the Tile funding timeline:
2013 – Jan – $200k – Seedfunding with Tandem
2013 – Jun – $2.7m – Crowdfunding
2013 – Oct – $3.5m – Growth Capital with Tencent
2014 – Oct – $9.5m – International Expansion capital led by GGV Capital
I really like this funding story and it will be interesting to follow their success. For those of us operating in Sweden I think we can take inspiration from this case – in how the Americans accelerate the funding fast, how they work with the Team DNA, the opportunities for us with Crowdfunding (a Swedish company can run this type of campaign remotely – the world is a smaller place now).
What can we learn from the Pitch video? (Click on the youtube link above).
- It is fairly simple, not flashy or expensive.
- The product is a mock up/prototype as I understand it. They were doing more of a Bill Gates – sell to the customer first – worry about the delivery later. (As I have heard Bill sold the ”idea” of MS-Dos and then in the taxi on the way home started to worry about how to make it.)
- They used a well known actress in the film. (This is like the DNA point for me – get the best you can around you, or the right people at the right time).
- Pain Killer – as Sequoia Capital say – kill pain for people. This product does it in a simple way which is why they can raise these type of funds.
- Surely a row of other key points that they worked on and I would like the chance to interview the team at some point to see how they worked. Why not follow them yourself.
Crowdfunding is a key part of the formal funding process for Start ups and here in Sweden we must start working more with this form – both the entrepreneurs and the professionals in the industry. It also represents another interesting concept that Serendipity work with – getting the customer to pay in advance for the solution they want. The Global angle is also a key factor that I really like – the world is smaller now.
What do you think?
Thanks for reading – reach out to me on LinkedIn if you want to discuss this more. I can help you with your pitch if you are looking for funding or if you are an investor I can speak more about this funding process with you.