Being a serial entrepreneur with four exits under your belt can be a double-edged sword.
On the one hand, you have a proven track record, which makes it a little easier to raise new funding. On the other, investors wonder just how committed you are to growing your latest company.
When David Cancel raised $15 million in funding for his fifth software company, all he had was an idea. “We raised a Series A at the very inception of Drift, before we had even started working on the company,” he told Coins2Day.
Today, Drift, a Boston-based conversation-driven marketing and sales platform that connects companies with their website visitors in real-time, announced $30 million in Series B funding. General Catalyst led the round, and was joined by existing investors CRV and HubSpot. Sequoia Capital became the latest investor to back the company.
Before Sequoia partner Pat Grady committed to the investment, he asked Cancel about whether he was planning to exit early before building Drift into a company that could “endure and withstand the test of time.”
“Our intrigue around David was that he’d been really successful in the past, but the open question was, ‘Is this a company he’s really building for the long-term,” Grady said.
Ultimately, Cancel managed to convince Grady that he’s committed to building a massive company. Drift will use the money from the Series B round to expand into marketing automation, open a new office in San Francisco, and hire more than 100 employees in the next year.
Earlier this year, Cancel told Coins2Day in a video interview that many first-time founders raise money when they don’t need it. “A lot of people try to get funding to hire someone,” he said in January. “But they already failed the first test. If you couldn’t convince one person [to join your company], you wouldn’t be able to convince a firm to give you money.”
Today, Cancel says that although Drift was well-funded before it even launched, he and his team of 15 didn’t touch the money for the first year of operation. “We acted like we were bootstrapped,” he says.
Although the company was formed three years ago, Drift first went to market in April of 2016. More than 50,000 businesses use the software, including Twilio, WeWork, MongoDB, and AdRoll.
As for the future of the company, is Cancel hoping to have a fifth exit soon?
“No, no,” he says almost immediately. “I don’t want to sell this company. This time, we’re really trying to build a company that will outlast us.”