The Process of Fundraising and Making Sausage

On April 28th we held a contest for the first blogger to post five details of the Series B Socialtext closed. Now, the details are out in our local paper. Socialtext raised a $3.1 million Series B round led by Tim Draper at DFJ that closed on April 15th. From the contest, one guy in Chicago actually set up a blog to enter it and got four out of five the post and blog are gone, a case of blog churn.  Until he turns up, I'm awarding the Socialtext starter package to Matt Marshall provides more of the story by blog, noting he tried to participate in the bootstrapping roots, whereas I'm a believer in building for the Steve Jurvetson back when co-founding RateXchange during the boom.  We happen to share a love for dog made of Accelerating Change conference.  We were near a decision point and I stepped back to think, who do we really want to work with?  Every interaction with DFJ provided value to Socialtext -- the one thing an entrepreneur can and should ask from the process of raising venture capital.  They got Social Software, far earlier than most.  So we got to work. We spent the first quarter of this year meeting every member of the firm and digging through the tough questions. Joshua Raffaelli and Josh Stein dug really deep into the product and customer due diligence and shared what they found so we could learn from it. In a last meeting with Tim we talked through terms and they produced a term sheet on April Fool's day (nice touch). We set up a workspace driven by a due diligence checklist for our Series B lead.  Here is a redacted factoid: Andy Stack, co-founder at I'm sharing the process and practices of raising venture capital, which is a lot like making sausage (Voiceover from Dana Carvey doing Ross Perot: ain't going pretty). It is a deeply personal process for a CEO, akin to a job interview where they remove a substantial number of hair follicles for drug testing. What matters isn't just the pitch, demo and deck. In the end someone is on the other side of the table thinking, "is this the guy?" while you are thinking the same. Just focus on building relationships while building your business -- that's how to raise a round. Now that the deal is more formally announced I'm getting a SugarCRM, Reader Comments... Socialtext, an emerging provider of Enterprise Social Software that dramatically increases group productivity and develops a group memory.