How I started Seesmic and raised $6 million

How I started Seesmic and raised $6 million

Loïc Le Meur blog
Feb. 14, 2008 

I closed the initial funding of Seesmic in September 2007. The main investment came from Atomico‘s
Niklas Zennstrom and Janus Friis (they invested $5.5 million on the $6
million). Talking to bloggers all the time, I have not been very good
at keeping the secret as Om Malik was the first to talk about it on October 8, 2007. On November 28, Liz Gannes got almost the entire list of investors right. We have never really hidden the funding as a partial investor list was even on our company backgrounder at the last Demo conference (by the way see our DEMO video if you want to learn about Seesmic in 6 minutes). So the only real news today is the full list of investors.

We should have made it "officially" public for a while but I did not
want to do it until all the paperwork was done and signed. That
happened last week. Getting 14 investors on board – most of whom are
individuals and not through funds – takes time.

Niklas Zennstrom
and I have been friends for years and we have been wanting to launch a
project together for a while. We both know that the media that has not
really changed since the growth of the Internet is TV. Most of our
friends do not watch TV anymore or watch it only with a laptop on their
knees. TV will totally change in the future, we all know that. While
Niklas and Janus are focusing on the high end video content with Joost, I have always been fascinated by the conversations.

I explained to Niklas that for me, the quality of conversations that
I have enjoyed on blogs and social software since 2003 had to happen in
video and that simply isn’t happening yet. I said I wanted to make this
happen and make it my next company and Niklas immediately said he was
interested in funding it, as a real partner, as a cofounder, not just
as an investor. He quickly introduced me to his long time partner Janus Friis and we immediately got on very well and started to talk how we should make it happen. Mattias Ljungman
who works at Atomico with them quickly worked with me on the terms and
the deal happened at an unusual pace for a funding this size. Niklas,
Janus and Mattias are just the best investors to deal with. They think
as entrepreneurs and behave like entrepreneurs. The trust they have
given me is unique and I know exactly what it means. Niklas, Janus and
Mattias spend an incredible amount of time with us, we were just a full
day in London with them, see what they say about Seesmic.

What is the most important for me is how Niklas and Janus reached a
massive adoption for Skype without any marketing ("in fact marketing
sucks" – as Janus often says), how they turned it into a global product
(Niklas and Janus are pushing us to support tens of languages on Seesmic since launch which is what we are working on) and also obviously how to scale, to name a few things.

I started thinking about launching the company. It was back in May
and I of course remembered the several startups I launched before
Seesmic. What I really wanted with Seesmic, is a global conversation,
involving people from as many countries as possible. What my previous
companies taught me is that it is very difficult to build a global
company in Paris. Just because the center of the Internet is Silicon
Valley and will remain, because if you are in Paris you tend to focus
on France or Europe naturally. There are exceptions like the dating
site Meetic who managed to become
#1 in Europe and reach a size that can compete with Match.com, but it
is rare (disclosure, I am a board member at Meetic). During the same
dinner with Niklas, I decided with my wife Geraldine to move to San
Francisco with our three kids to give Seesmic the highest possible
chances of becoming a global conversation from day 1.

In two months, we changed our life, our house, the kids’ school, our
main language switched to english (keeping our accent, though !), got
our 5-year long investors visa in the US. I changed phones and
computers, leaving my ten-year old business network and friends in
Europe.

In September 2007, I felt like I was graduating from business school again and starting from scratch here. Fortunately it was not totally the case. I spoke twice in a row about entrepreneurship at Google Zeitgeist Europe then Google invited me to Zeigeist in the US and that is how I met Steve Case.
Conferences often help creating a network very fast and this is why I
go to so many. I did not really need to raise anymore money, I could
have just settled for the $5.5 million, but I really wanted to have
entrepreneurs and friends help me launch Seesmic. I started calling my
friends and I won’t name them all here of course (please do not be
offended if you helped me and I did not quote you here, I did not mean
to be comprehensive). Jeff Clavier, Freddy Mini and Scott Rafer helped a lot in setting up everything even before I got my visa.

After formally announcing I was moving here, Michael Arrington and Jason Calacanis gave me my first speaker role as they invited me to become an expert judge at TechCrunch 40, which gave me great connections. I sat next to Ron Conway, introduced by Conrad Riggs.
The minute I talked to Ron about Seesmic, he immediately invited me to
have coffee at his San Francisco home, and he decided to invest in
Seesmic after one hour. Ron introduced me in turn to so many people I
had trouble to keep track of them – including Michael Parekh who gives me tons of advise, like building a reputation system in Seesmic for example.

If you asked me to name only one difference between Europe and the
US it would be the positive attitude that floats constantly around
here. It is the "how can I help" by default. Trust is by default. You
can probably lose it fast but you have it much faster than in Europe
where the attitude is more suspicious, more negative. Each time I
launched something in Europe I started by getting the criticism and
listening people who would explain me why I would fail. Here I have
troubles counting how many people offer their help. I spent two hours
with Mark Zuckerberg in Davos
this year, I enjoyed of course every minute and Mark repeated three
times "how can I help you". It is still so unusual for me that the only
thing I had to answer was "I do not know yet, but thank you, and let me
know how I can help you too". That was exactly the attitude of Mark Pincus.
Mark immediately made time for me in his schedule last summer and
helped me. Seesmic’s office is actually located at his building at 365
Vermont St and I usually get a piece of advice when I bump into him in
a corridor as well as English accent lessons.

Back to Michael Arrington. Michael was the first to see Seesmic and was also the first to become so excited about it.
Michael sees hundreds of startups a week so coming from him it was a
important for me of course. It was the first validation of the video
conversation possibly being a big opportunity for me. Michael asked me
if he could invest even though it would create issues about investing
and writing at the same time, even though disclosures are always in his
posts. We would for example have made it to the Crunchies but got kicked out because Michael invested and I said I would still prefer Michael’s advice.

Reid Hoffman has been a long time friend, I was fortunate enough that Reid let me invest at the very first round in LinkedIn
and Reid was willing to invest in my next venture without even asking
what it was. Same story with my buddy and one of Europe’s best
entrepreneur Martin Varsavsky
who told me for years he would be very offended if I did not let him
invest in my next startup so here they are both friends and investors
in Seesmic. I remember so well when Reid shared with me the LinkedIn
slides deck he used to raise his first round, with the entire strategy.
I have always been such a fan of Reid. Reid explained that there was no
point in getting any revenue in LinkedIn before there is a very large
community using it every day. And that is exactly how he did it. I do
not think LinkedIn has charged anything before they reached like 3 to 5
million members. Now LinkedIn will generate around $80million in
revenues in 2008 (disclosure, I invested in LinkedIn’s first round).
Seesmic will I hope be as successful but in any case follow the same
launch, focusing entirely on its community for now.

Ted Wang,
our lawyer, introduced by Jeff Clavier played an amazing role in
closing the Series A and I recommend him to any entrepreneur. Actually
you will be lucky if you can get Ted’s time because he is the lawyer of
so many great startups that it’s more about being lucky enough to have
him as lawyer than the opposite. Ted introduced me to Ariel Poler who in turn decided to invest around a coffee (and help!).

Of course Robert Scoble gave me precious advice (after he also broke the news on launching Seesmic as a rumour)
on how to launch and I spent time with him, Robert also participated in
the very early conversations at Seesmic. Robert gave me amazing
feedback and also introduced me to countless great people. Robert liked
the way we shared the idea of Seesmic on a daily basis on loic.tv and gathered feedback from bloggers the very first day. Robert pushed me to continue in this direction, Shel Israel liked the approach too.

One of the first person I called and became friends with is Dave Winer,
that I had been reading since I launched my own blog in 2003 and talked
to him about Seesmic, how he thought I should launch, how he saw the future of TV. Dave first asked me if he could invest and I immediately accepted of course and then decided
he should not invest in company stock whatsoever with the stock market
crash. And it’s fine, it’s not about money, it is about friendship and
advice. Jeff Clavier wanted to increase his investment allocation in Seesmic
in any way he could so he took Dave’s allocation in a second when I
told him it was there. Dave, I will still ask you what you think about
what we are doing anyway !

I have watched how Steve Garfield and Jeff Pulver
have been creative with videoblogging and online video in general for a
while and learnt a lot from them. I was very happy when they asked if
they could invest too, it was another validation that building a
conversation platform for videos makes sense. Dan Gillmor‘s book, "We the Media"
inspired me a lot in the way media is evolving and of course in
creating Seesmic. Dan helps on a daily basis, he currently says we
should ad Creative Commons support in Seesmic "for yesterday" and that
is what we are doing.

Having friends as investors if is a very difficult exercise. It is
in principle the best of course because trust is here by default but
there is an additional responsibility in taking their money, especially
if you fail. It is very risky and all my investors know that. I
discussed it with them and want to stay friends with them whatever
happens. I have personally invested in about 15 startups, many with
friends and lost my money in many so I know what I am talking about and
I would hate that investing in Seesmic would change anything in our
friendship. In fact I could have not taken their money at all and just
built Seesmic with Atomico. It is an additional responsability on my
shoulders to take friends money but their advise is so valuable that I
wanted to do it.

There are many other people who asked me to also invest in Seesmic.
Unfortunately even though we announced the funding today only, it was
actually closed for months (most of it in September 07), I just did not
want to announce it before all the paperwork was done.

I thought that sharing how Seesmic got
funded was important, just like sharing and being honest are the most
important parts of both the Seesmic community and the product. We are
building Seesmic since day 1
based on the community feedback. We have now a few thousand members of
Seesmic around the World who post more than a thousand video a day in
average and our active members love it. That is what matters. The
people and the product. The funding is "just" the fuel.

Next steps: add the key features which are missing and launch very soon in public. You can follow daily how we build it, join Seesmic and give us your feedback. We will listen to it as much as we can.

Here is the full investor list in Seesmic, for $6 million Series A:
* Atomico (Niklas Zennstrom, Janus Friis, Mattias Ljungman and Geofrey Prentice)
* Michael Arrington – Founder, TechCrunch
* Steve Case – Co-Founder and former CEO and Chairman, AOL
* Jeff Clavier – Managing Partner, SoftTech VC
* Ron Conway – Early investor, Google
* Steve Garfield – Pioneering video blogger
* Dan Gillmor – Director, Knight Center for Digital Media Entrepreneurship
* Reid Hoffman – Founder, LinkedIn
* Michael Parekh – former Managing Director, Goldman Sachs
* Mark Pincus – Co-Founder and former Chairman and CEO, SupportSoft
* Ariel Poler – Founder and former CEO, IPRO and Topica
* Jeff Pulver – Chairman and Founder, Pulver.com
* Martin Varsavsky – Founder, FON

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