Xoopit had a chance to take more than its initial round of $1.5 million when it was just getting started. But rather than take the money upfront, Xoopit said "no."
Bijan Mirashi, co-founder and CEO of Xoopit, which was formed in the fall 2006, tells John Bautista, host of fundRazor, that he thought raising 12 to 18 months work of capital was a more prudent route than taking in capital for a few years. Taking just enough cash would give Xoopit the opportunity to build a product, iterate a few times and figure out hte right product market fit, before scaling, said Mirashi.
"Sometimes having too much money too soon can be distracting for the business b/c it could lead etnrepreneurs to make decisions to try things that they wouldn't try when they have to just have limited funds." "When you have limited funds you have to make very, very hard, painful trade offs. It's those hard painful trade-offs that force you into something specific and valuable."
Xoopit eventually raised a Series A round of $5 million.
In this segment, listen to Mirashi also explain the importance of having the right board members and how Xoopit board members Foundation Capital's Charles Modlow and Accel Partners' Theresia Gouw Ranzetta have helped unlock doors for the company.
Finally, Mirashi's advice on fundraising. "First and foremost, get involved with the pro's - professional investors and angels who've done this before."