Startup and Funding Advice From the Co-Founder of Webs.com
Feb 17, 2012
If you were one of 999 who RSVP’d to attend DC Tech Meetup: Social Media Edition this past Wednesday, then you got a chance to enjoy Peter Corbett’s interview with Haroon Mokhtarzada, Co-Founder and CEO of Webs.com - “the world’s largest do-it-yourself website-creation solution,” which was acquired by Vistaprint in December 2011 for $117.5 mil.
If you missed this interview or want a short summary, here are a few takeaways:
- On entrepreneurship: Do not sit on your ideas, execute them.
“It’s really important to actually start. Do the thing [startup] and it really doesn’t have to be perfect or thought through from the start.”
- On raising capital: Know your investor. Venture capital may not be the right fit for your company.
“You have to realize what the venture capital firm means and what it wants. And what they are really looking for are very large opportunities. So, if you think you’ve got this great idea that if you do really well, you can get $5-10 mil in revenue, I actually wouldn’t recommend raising venture capital at all. Go to angel investors, because you create a lot of tension between yourself and venture partner, who keeps pushing you to get much bigger, while you are going after something different.”
- On exiting vs raising more capital: Know what your competition is doing and analyze the potential of your revenue growth. Selling your company at higher price in the future may not be achievable.
“On the one hand, you are waiting on the upside of continuing to grow, but there is a risk in doing that. Yes, you can continue to grow but you could flatten, and if you flatten out you basically become worthless. A lot of our competitors raised a lot of money. So, I felt that we either have to sell or raise more money. If you decide to raise more money, you add a lot more risk to the equation. Now you will have to sell the company for a much higher price and that’s a larger target to get.”
- On early stage marketing: Use as many resources as possible, i.e. forums, directories.
“I did two things. One, I went to all the directories out there that had some place where we could list ourselves and just manually listed our site. I also went to Yahoo type websites and left replies to questions.”