Shopify raises $7 Million Series A(shopify.com)
shopify.com
Shopify raises $7 Million Series A
http://www.shopify.com/press/articles/7-million-series-a-funding/
9 comments
Well as you can see, the post was taken out of the Profitable & Proud series and was renamed to a QA right after posting.
I guess we are not technically bootstrapped by some incredibly demanding definition of the term.
To me all those things - Bootstrapping, Angel money, Grants, VCs, etc - are just tangential tools in a pretty large toolbox that we as entrepreneurs can draw upon. There is no secret bootstrap society that you get to join if you do that just like there is no secret hammer society that you get to join if you only use hammers for all your carpentry jobs.
In any case, use the right tool for the job. We started a risky business in a crowded space so we bootstrapped. We ran out of cash so we got Angel money. We became profitable so we increased our own spend. We got really good at this and wanted to accelerate so we take VC money to get to our goals faster. It's not rocket surgery.
I guess we are not technically bootstrapped by some incredibly demanding definition of the term.
To me all those things - Bootstrapping, Angel money, Grants, VCs, etc - are just tangential tools in a pretty large toolbox that we as entrepreneurs can draw upon. There is no secret bootstrap society that you get to join if you do that just like there is no secret hammer society that you get to join if you only use hammers for all your carpentry jobs.
In any case, use the right tool for the job. We started a risky business in a crowded space so we bootstrapped. We ran out of cash so we got Angel money. We became profitable so we increased our own spend. We got really good at this and wanted to accelerate so we take VC money to get to our goals faster. It's not rocket surgery.
Quite true. I've mentioned some of those things below, and I absolutely don't mean to denigrate your success, you guys are great. It's just changed the way that I see how you see yourselves, though I guess I should have been thinking that way all along.
Keep up the awesome. :)
Keep up the awesome. :)
It's not brain science either. :)
They've already proven their business model, have tons of customers, are making a profit, and have a plan for scaling their business. This is the perfect time to take investment - regardless of whether they were bootstrapped to this point.
I don't think anything in the so-called "lean startup" philosophy runs counter to the idea of taking Series A financing when appropriate. Hell, even 37Signals took money from Jeff Bezos...
I don't think anything in the so-called "lean startup" philosophy runs counter to the idea of taking Series A financing when appropriate. Hell, even 37Signals took money from Jeff Bezos...
Oh totally. Just commenting on the change, that's all. I certainly don't think 'lean' means 'never take money,' but it also does demonstrate that Shopify is a 'startup' and not a 'lifestyle business.' Maybe they always were, and I just didn't notice.
What I was thinking. I'm sure 37signal guys have something to say.
But you know what, I bet they got an amazing deal because of their leverage. how can you not take the money?
But you know what, I bet they got an amazing deal because of their leverage. how can you not take the money?
Actually, re-reading my link, apparently they had angel money before, so they already weren't technically bootstrapped.
I found an interesting bit of info by Tobias on Quora
"...it took about 3 years to reach positive cashflow
and we financed this by not taking salaries as founders,
angel investors and grants (canadian government) all
at once."
Not a single Canadian VC in the bunch. A pretty good illustration of what's wrong with Canada's VC industry... it doesn't exist! ;-)
The last Canadian VC I talked to accused me of being uninterested in growing my company after I didn't want to show up for some event with their LPs...
Being insulted by a VC is almost a rite of passage up here.
Being insulted by a VC is almost a rite of passage up here.
That's horrible if true (and I have no reason to doubt that). However, methinks you've been talking to the wrong Canadian VCs...we're doing our best @iNovia to change those perceptions. I think the reality is VCs who act like jerks are going feel it in their pocketbooks when their deal flow and returns dry up. That being said, congrats on the round - great syndicate, great team and a great product.
Between Well.ca, Shopify and Beyond the Rack, Canadian E-Commerce companies seem to be on the cusp of big things...exciting times indeed.
Between Well.ca, Shopify and Beyond the Rack, Canadian E-Commerce companies seem to be on the cusp of big things...exciting times indeed.
Karamdeep,
I notice you're an Ivey grad - very cool, so am I. Next time you're in Toronto I'd love to chat - I write quite a bit on Canadian entrepreneurship. A notable example:
http://www.myplanetdigital.com/digital_strategy/blog/why-can...
I notice you're an Ivey grad - very cool, so am I. Next time you're in Toronto I'd love to chat - I write quite a bit on Canadian entrepreneurship. A notable example:
http://www.myplanetdigital.com/digital_strategy/blog/why-can...
enjoyed the article...i'll be back in town late next week, drop me a line: [email protected]
That's great and I have indeed heard good things about iNovia.
Granted I mostly dealt with Ottawa VCs who have all made their bank during the heyday of the tech bubble in telecommunication industry. We were speaking completely different languages and had completely different ideas about each others roles.
Between iNovia, Real ventures and seeds such as Year One Labs things are looking to get much better here quickly. I'm excited.
Granted I mostly dealt with Ottawa VCs who have all made their bank during the heyday of the tech bubble in telecommunication industry. We were speaking completely different languages and had completely different ideas about each others roles.
Between iNovia, Real ventures and seeds such as Year One Labs things are looking to get much better here quickly. I'm excited.
i think part of the process is opening a dialogue with entrepreneurs such as yourself on what we can do to create the type of environment that is more conducive to the birth and growth of companies like shopify...i think that's been talked about for a long time - but the truth of the matter is that people have been afraid to really speak their mind in case they jeopardize future funding relationships. it's going to take a lot of hard work, but i can tell you that guys like my boss chris, mark over @ real, and ben @ yearone are working their asses off 24/7 to make that happen. i'd love to just sit down and pick your brain on what the last few years have been like for you, and what could've been done to make those a bit easier. let me know if you're interested.
I was at a Toronto event in November that revolved around this exact topic.
http://www.aspectgraphics.com/ACCTO/A_TO_invite.html
Basically, it was a room full of startup folks, a couple of people with money talking and a few lawyers. It was more informative than it sounds.
In short, the question being asked was "what's wrong with Canadian Startup Capital?"
After the lectures and a lot of conversation about the topic with other Toronto based startup folks in addition to a few VC people, I boiled the problem down to these points:
1) We don't value our own work. To hit a product out of the park, we sort of assume (like the rest of North America) that we need to be in the valley. I don't think that this is unique of Canada though - I've talked to a lot of U.S. based startups outside of California that feel the same way.
2) Canadian investors have different investments. We like resources, land, oil, that sort of stuff. Investing in tech somehow seems un-natural to a lot of the folks with the Brewsters Millions type of money.
3) A lot of Canadian tech startups are founded in revenue. Shopify is a good example - they're making money. They need some money so they took funding, but they didn't start the company needing funding to survive.
Talking to a large number of Canadian startups over the last few years, I think that the previous point is the biggest problem with the Canadian VC industry. We simply don't ask for the money early and often enough to constantly remind people outside of the tech industry how much money it usually costs to get to revenue. A lot of the products grown in Canada are not erroneous in the least - the strong majority of them have customers and revenue in proportion to the costs they incur.
4) Last, many Canadian tech companies aren't solving big enough problems. Similar to the point above, we're focused on revenue. VC is a game best played when the players are ALL swinging for the fences. A lot of the problems that our current products solve are focused on those that have a limited number of customers so that we can quickly build and sell them a solution. VC's want to fund solutions that will impact very large groups of people, if not all 6.8 billion of us.
In the end, it's only a matter of time really. We'll have a few more Shopifies under our belt and then Film Industry won't be the only folks coming up North for a good deal :)
http://www.aspectgraphics.com/ACCTO/A_TO_invite.html
Basically, it was a room full of startup folks, a couple of people with money talking and a few lawyers. It was more informative than it sounds.
In short, the question being asked was "what's wrong with Canadian Startup Capital?"
After the lectures and a lot of conversation about the topic with other Toronto based startup folks in addition to a few VC people, I boiled the problem down to these points:
1) We don't value our own work. To hit a product out of the park, we sort of assume (like the rest of North America) that we need to be in the valley. I don't think that this is unique of Canada though - I've talked to a lot of U.S. based startups outside of California that feel the same way.
2) Canadian investors have different investments. We like resources, land, oil, that sort of stuff. Investing in tech somehow seems un-natural to a lot of the folks with the Brewsters Millions type of money.
3) A lot of Canadian tech startups are founded in revenue. Shopify is a good example - they're making money. They need some money so they took funding, but they didn't start the company needing funding to survive.
Talking to a large number of Canadian startups over the last few years, I think that the previous point is the biggest problem with the Canadian VC industry. We simply don't ask for the money early and often enough to constantly remind people outside of the tech industry how much money it usually costs to get to revenue. A lot of the products grown in Canada are not erroneous in the least - the strong majority of them have customers and revenue in proportion to the costs they incur.
4) Last, many Canadian tech companies aren't solving big enough problems. Similar to the point above, we're focused on revenue. VC is a game best played when the players are ALL swinging for the fences. A lot of the problems that our current products solve are focused on those that have a limited number of customers so that we can quickly build and sell them a solution. VC's want to fund solutions that will impact very large groups of people, if not all 6.8 billion of us.
In the end, it's only a matter of time really. We'll have a few more Shopifies under our belt and then Film Industry won't be the only folks coming up North for a good deal :)
Jevon Macdonald recently wrote a piece discussing a Deloitte study that suggests Canadian VC's arn't quite the fan of their own countrymen when it comes to startup investments compared to other nations.
http://www.startupnorth.ca/2010/10/28/what-do-canadas-vcs-re...
http://www.startupnorth.ca/2010/10/28/what-do-canadas-vcs-re...
Good think foreign investors are! I've seen quite a bit of interest recently actually from investors in the Middle East - a personal friend was searching for biotech funding for years and is days away from closing a major deal with a middle eastern fund (to start it in Canada). Couldn't get even a whiff from the stodgy Canadian VC industry.
The talent's here but most leave because of these non-existing VCs. Though we are getting better!
I've set up a number of shopping carts on shopify. It's been one of the best things that's happened to my freelancing life in a long time. Their documentation is a pleasure to read, and you can do some really nifty stuff without having to worry nearly as much about security (looking at you OSCommerce).
I'm working on some Shopify projects and have found the documentation lacking (i.e. written in broken English, out-of-date regarding newest code developments, and some links point to missing documents).
I have tons of respect for the company and the team, but the documentation isn't given first-class status in my experience.
I have tons of respect for the company and the team, but the documentation isn't given first-class status in my experience.
Totally agreed. We will get much better at this in the future. Unfortunately 2/3 of the funding team (me included) are english-second-language.
Maybe it's our own experience, but the "nifty stuff" is quite limiting. We've been trying to get combo pack support (ala Amazon's buy this + that together and get $5 off), and it's been a total NIGHTMARE.
For a basic general cart, it's great. But especially for an e-commerce system that you rely on your store for 100% of your income, the second you want to try anything nifty, such as combo packs, flat rate box shipping (mostly calculations involving if a cart can fit in the flat rate box), coupon codes for only specific products, and random general issues (such as 100 variants per product max, which is annoying when trying to hand-create combo packs with 200-300 variants), I'd suggest something else.
For a basic general cart, it's great. But especially for an e-commerce system that you rely on your store for 100% of your income, the second you want to try anything nifty, such as combo packs, flat rate box shipping (mostly calculations involving if a cart can fit in the flat rate box), coupon codes for only specific products, and random general issues (such as 100 variants per product max, which is annoying when trying to hand-create combo packs with 200-300 variants), I'd suggest something else.
I've had great results from FoxyCart, even with custom code.
Good on them, they have a fine product and contribute back. I hope they all make a ton of money. My wife is an e-commerce trader and she's never written a line of code, and she uses Shopify. And I am not support, and that's good for everyone under this roof.
Congratulations! Shopify is a big inspiration for me. My current project is a similar platform for selling digital subscription products and I'm hoping to one day get it to the level Shopify is at right now.
Plus, their support is amazing. I have no idea how they can manage to keep it on this level with so many people.
Plus, their support is amazing. I have no idea how they can manage to keep it on this level with so many people.
Great field, this is a very common request we are getting but it's not a true market fit for Shopify. Consider building it as a Shopify app so that you can market it to our customer base and through our sales.
Keep at it. One of our products basically a shopify for photographers and does really well.
Shopify certainly has a good deal going for themselves, with that they take a monthly fee AND a percentage of revenue. Nobody else in this market has been gutsy enough to ask for both!
I was thinking about writing a few apps for Shopify, so this might just push me over the edge.
Any ideas/hints on how they'll expand the API? There are a few different calls I wish were there.
Any ideas/hints on how they'll expand the API? There are a few different calls I wish were there.
[email protected] is the right person to talk to. We add new API's constantly as it's by far our biggest development focus. I'd also love to hear your thoughts, you can reach me at [email protected]
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That said, congrats to Shopify. You guys do great stuff, and your open source contributions are top-knotch!