John Cook of the Seattle P-I noticed something synchronous about three recent technology company financings in Seattle:
But … what is it with raising $8 million? Is it just a coincidence that Seattle area startups Judy’s Book, BioPassword — and now Trumba — have all raised $8 million rounds in the last few weeks. Is there something magical about the $8 million figure that I am missing?
Funny he should say that. I remarked recently after a meeting that there is increasingly a kind of a la carte standard financing menu when doing tech deals. Series As get done by putting in $X, Series Bs involve putting in $Y. And if you ask why Bs require an $8mm insert, for example, people can ably explain the number to you, but there is always a strong whiff of reverse engineering behind it, as if the exercise started with the “B” round number and then worked backward into uses, rather than the other way around.
Related posts:
Assuming VC attention is a finite resource, a certain amount of attention has to be budgeted toward deciding which deals to do, and a certain amount has to be budgeted toward deciding how much to do for each deal.
From your experience, which allocation of attention has a better overall return on investment?