There are no hard rules for raising money. Let's say Parsley took $40m but at like $200m post - that means it's about 20% of the company.
Depending on how that deal is structured - liquidation preferences, board seats, voting rights of the preferred stock (which the vcs would get), you're probably giving up some control here.
It also raises expectations that, well you got $40m to deploy, go out and do it and eat up all that market share.
This assumes that your product / market fit is not only super bulletproof and solid, but also that you've assessed every type of market up to your valuation (ie $200m worth of value) and have a go-to-market ready for each.
Ok let's say you even had some semblance of that - deploying GTM on each vertical at that speed puts pressure on the sales team to close aggressive deals. This means that some deals might not be 100% fit but maybe 90% fit. Well if you're expected to grow at 10x what you initially thought, those 10% inefficiencies start to stack.
Ok NOW product team is starting to feel the heat to accommodate for all these not 100% perfect fit deals. So what do you do? Start hiring people on product to try and keep up.
The problem with rapidly scaling growth, esp in enterprise, is that inefficiencies and edge case situations compound significantly at scale.
In frothy markets like right now, it's up to the founders to figure out the right amount of money because not enough can kill you but so can too much.
Depending on how that deal is structured - liquidation preferences, board seats, voting rights of the preferred stock (which the vcs would get), you're probably giving up some control here.
It also raises expectations that, well you got $40m to deploy, go out and do it and eat up all that market share.
This assumes that your product / market fit is not only super bulletproof and solid, but also that you've assessed every type of market up to your valuation (ie $200m worth of value) and have a go-to-market ready for each.
Ok let's say you even had some semblance of that - deploying GTM on each vertical at that speed puts pressure on the sales team to close aggressive deals. This means that some deals might not be 100% fit but maybe 90% fit. Well if you're expected to grow at 10x what you initially thought, those 10% inefficiencies start to stack.
Ok NOW product team is starting to feel the heat to accommodate for all these not 100% perfect fit deals. So what do you do? Start hiring people on product to try and keep up.
The problem with rapidly scaling growth, esp in enterprise, is that inefficiencies and edge case situations compound significantly at scale.
In frothy markets like right now, it's up to the founders to figure out the right amount of money because not enough can kill you but so can too much.