Today is going to be an interesting day in terms of funding. A German start-up, NumberFour, just raised €38m for their Series A. It's Marco Boerries, so a seriel entrepreneur, and the business has been around since 2009.....just without launching any products. This is not a post about Marco. He's a rockstar and if anyone should get this size round in Europe, it's probably him.
Nevertheless, don't get caught up in the numbers. Everyone is talking about the size of the round. Journalists don't have much to go on so they are focusing on this. Every blog post has something along the grounds of "biggest", "largest" and so forth. No one is actually talking about any products. First, no one really knows what they are. Further, even if the products were available to the public, most journalists wouldn't talk about the technology because they'd have no clue what to write about it. It's software for small businesses. Even today, no one really gets this area.
It all feels so 90's! Back then (for those of you who weren't around in the scene) you had posts everywhere about size of rounds. Everything was about bigger, bigger, bigger. It all started first in the US and then eventually made it's way over to Europe. Same thing this time. Do I feel we are in a bubble? Well, no, the IPO bubble of the late 90's this isn't. At the same time we are in a valuation bubble and where this goes, no one really knows. Yet, it doesn't matter.
Focus on your business. Don't let large financing rounds distract you or get you down. I am already hearing all over Europe questions such as "should I go out and try to raise €10m?" or "Did we raise for far too low a valuation?" from the lucky few who were funded. It's all irrelevant. You either focus on your product and it rocks or you don't. The only thing that is going to make you successful or keep you from flaming out is an awesome product and customers willing to pay for it. The louder the noise about valuations and the size of rounds, the more you should be looking away and focusing on your task at hand.....making your product awesome and your customers happy.