Every day, it seems like there’s a new press release about a startup landing seed funding. You know the headlines — “Startup X nabs $1.2 million for dog-friendly mobile app” or “Y raises $700K to digitize your sock drawer.” Sure, it’s exciting for the companies involved, but the straightforward financial news is not always terribly interesting. The story behind the funding is usually the really cool part, but it often goes untold.
That’s why Buffer is doing something different. The startup, whose app enables users to easily schedule Tweets and Facebook posts to be posted at a later time, has raised new seed funding. But for Buffer, the fact that it has taken on $400,000 is secondary to explaining how it all happened — and the company’s hope is that other startups can learn from the experience.
Pulling back the curtain on seed funding
Buffer on Tuesday published a detailed blog post that details exactly how founder Joel Gascoigne and co-founder Leo Widrich met each of their 19 new seed investors (including Guy Kawasaki, AngelList designer Graham Jenkin, Huddle co-founder Andy McLoughlin, and AngelPad’s Thomas Korte and Gokul Rajaram) and why they decided to take on each investment. A typical paragraph begins with, “It was a sunny day in October when we sat down in a Starbucks in San Francisco with Andy…” It’s a fun read and could be especially helpful for other startup founders interested in how the funding process happens.
“As a company, we always want to be very transparent,” Widrich said in an interview Tuesday. “So instead of the typical funding announcement, we decided to write this story where we explain every story behind every investor. We wanted to help people understand the fundraising process. There’s really no reason to be secretive about it.”
The Silicon Valley advantage
It was just five months ago that Gascione and Widrich moved from Birmingham, UK to San Francisco to turn Buffer, which had profitable operations as a “lifestyle business,” into a full-on company. Since then, the app has grown its user base from around 20,000 to 85,000, seen a huge uptick in engagement, and Buffer has added a third full-time employee. Right now, Buffer is making some $20,000 in revenue per month.
For Buffer, being in the Bay Area was a hugely important step for enabling this growth, and for helping its founders forge key relationships in the tech world. Widrich said:
“The most interesting thing about Silicon Valley is the aspect of serendipity. Here, if you keep your mind open and your eyes open, you can connect with anyone. Being here has been a fabulous way to get in touch with people.”
Unfortunately, due to an inability to secure H-1B visas, the Buffer guys are moving from San Francisco to Hong Kong this week. The company will use the new funds to hire more people, but in true lean startup form, all Buffer’s operations will be virtual. “We basically pulled up Google Maps and said, ‘Where in the world do we want to go?’” Widrich said. “Hong Kong sounded pretty cool.” Indeed — it’s a pretty cool time for startup founders in general, and for Buffer especially it should be an exciting road ahead.