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How I Raised $50M

How I Raised $50M

Each round has a totally different story to tell.

Tyler Denk
January 07, 2025

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As a founder myself, I gotta say my favorite part about Agree.com is that their founders are accessible and dialed in to making the product 10x better than the alternative.

I already know you’re smart because you read Big Desk Energy. Now you can show others that you’re smart because you send contracts with Agree.

Using Agree.com is an IQ test.

I’ve raised nearly $50M for beehiiv over the span of 4 different rounds. Each round has a totally different story to tell.

To set the record straight — I don’t believe raising money in of itself is an accomplishment, it’s simply a means to an end. Just look at Bench Accounting who raised over $100M and abruptly shut down over the holidays (before Employer.com swept in to acquire them at the last minute). That saga deserves its own post, but the point remains: raising money doesn’t really mean shit.

If you have the means to bootstrap your startup, then good on ya. Back when my cofounders and I began building beehiiv I was 26 years old, and they were both just 23. We didn’t have the means to pay our own salaries, our vendors, or other people to come join us.

We spent nearly a year moonlighting the project before we finally had a working prototype in the summer of 2021. Despite that, we still had full-time jobs and were only spending a fraction of our time building beehiiv. We were on the sidelines, and it felt like we were letting a massive opportunity slip through our hands… so we eventually decided to raise some capital and go all in.

I rented a summer house in Venice that July with a group of my best friends. That detail is fairly irrelevant outside of the fact that it lines up perfectly with raising our seed round.

I arrived in LA that month with a simple goal: raise enough money to quit our jobs and pursue beehiiv full-time.

I would spend all day in the living room at this makeshift standing desk I put together (a stack of books) and pitch the opportunity to investor after investor. I’m not sure who had it worse:

Me, being rejected by more than 40 investors.
My friends, who had to listen to me repeat the same pitch more than 40 times.

Raising a seed round is a really humbling experience, but you also can’t help but acknowledge the absurdity of it all. We had no product, no revenue, and no customers… yet I was caught dumbfounded with each rejection. “What do you mean you don’t want to wire us millions of dollars?”

I haven’t experienced that many rejections since spring break in college. That last sentence was a lie, I crushed it that spring break.

Midway through July I got introduced to Howard Lindzon from Social Leverage, who asked if I was free for a 7am Sunday call (total hardo move). The call went well and he suggested meeting IRL in San Diego later that week.

I was only visiting LA at the time and didn’t have a car, so I rented a Ford Mustang convertible to drive down the Pacific Coast Highway to San Diego. That’s an equally irrelevant detail, but nothing signals desperation more than a rented Ford Mustang.

Anyone who’s ever raised money before understands the dynamics of how the round comes together — no one wants to give you money until one person wants to give you money, then everyone wants to give you money.

As soon as Social Leverage agreed to lead the round, all of the strategic investors who had danced around giving me an answer quickly fell in line and committed to writing a check.

Miraculously I had arrived in LA just a few weeks earlier with a semi-functional prototype and a dream to go all in on this business… and left that July with $2.6M secured in the bank.

Key Takeaway: We had a dozen or so “strategic” investors who were interested but weren’t able to lead the round (the lead investor is the largest check and dictates the terms of the round). It’s important to have interest from smaller strategics so you can signal that there is demand, but it’s also most important to close the lead before accepting those smaller checks. It’s a constant game of cat and mouse and doing what you can to artificially amplify demand.

Fast forward a few months and it turns out that I had grossly underestimated how expensive it is to build a business at this pace and scale. Hiring A+ talent is super expensive, as is offering competitive benefits, insurance, retirement matching, and all that jazz (and there’s a lot of jazz).

I quickly came to the realization that we needed a seed extension. Translation: we fucked up and didn’t raise enough money for our seed.

I had thought that given the early traction and success that we’d be able to raise the money in just a week or two. We had clear product market fit, were scaling quickly, and I felt like we had proved that we could actually build something of value and generate revenue (something that may not have been obvious a few months prior during our seed raise).

The market had other plans. There was a huge pullback in the spring of 2022 and investors weren’t writing checks. This ended up being the most difficult round we ever raised. To make matters worse, our CTO and cofounder tragically passed away in April.

For me personally, this was the bottom. We just lost a friend and arguably the most important person at the company. My days were split scrambling between damage control and being rejected by every investor I spoke with.

I spoke to one fund for weeks; did several rounds of diligence, pulled together a rudimentary data room, and poured all my time into it only to receive the most asinine rejection.

“We like the team, the product, the traction, and the customer feedback… we just have some concerns about your ability to build the ad network.”

I’m paraphrasing, but they seem to have wanted a risk-free investment into a 6 month old company. Early investors get outsized upside because they make a bet when there are still plenty of uncertainties; it seems like they forgot they were a seed fund. Whatever, I don’t hold grudges.

too late they already passed on our seed
— Tyler Denk 🐝 (@denk_tweets)
4:59 PM • Nov 28, 2024

Sasha from Creator Ventures, an existing investor from our seed round, caught wind that we were looking to raise additional capital and expressed interest in leading the round. He ended up making dozens of introductions and took charge in pulling the round together (something I’m infinitely grateful for til this day).

Our extension was led by two EU-based VCs: Creator Ventures and Blue Wire Capital. We joke that all the US-based VCs were too scared during the pullback to make a move. Both have been incredible partners and stepped up and bet on us during one of our most difficult times.

Key Takeaway: Capital is commoditized. I’d prefer to spend one week raising funds from lesser-known investors than waste ten weeks chasing capital from a “top-tier” fund (probably with worse terms). Raising money isn’t the job, building a product or service that solves customers’ problems is. Take the path of least resistance and keep building.

A year later we were no longer the underdog that funds were quick to pass on. Quite the opposite actually — I would receive (and ignore) a few dozen emails each week from funds who wanted to invest.

By May 2023, we were generating roughly $300K in revenue per month. We just had our first profitable month, were growing revenues ~20-25% MoM, and were really beginning to hit our stride as a company.

And while that all sounds great on the surface, we were running on fumes. I was routinely up past midnight answering support tickets when I finished all of my other work, our engineering team was constantly shuffling between fires, and we were always short on bandwidth to execute on the roadmap.

One night I was up past 1am answering support tickets and just absolutely hit a wall. I was voluntarily choosing to play an already difficult game on the hardest level, and was stubbornly choosing to ignore email after email from all the top VCs.

Capital isn’t always the answer, but if it allowed us to hire a few additional engineers, shift my efforts away from support tickets, and invest more into the business… well, that would probably improve the product and morale of the entire team.

Friday May 12th

I wrote a one-pager to myself with a hypothetical: if we did have $10M in the bank tomorrow, what would we even do with it?

Saturday May 13th

I slept on it, re-read it in the morning, and came to the overwhelmingly obvious conclusion that doing anything else was just purely irresponsible.

I replied to a handful of funds that I was down to play ball and explore what a Series A would look like. That kicked off one of the most intense and memorable weeks of my life (will save the full story for another post).

Long story short, we had two term sheets in hand by that following Friday, and signed our Series A term sheet with Lightspeed that Saturday (just one week after waking up and deciding we should raise a round).

I owe it mostly to our monthly investor updates; a detailed update I regularly send to all of our current investors, employees, friends, and family. Typically when I get introduced to new investors, I’ll add them to the list in place of “grabbing a coffee.”

Faraz from Lightspeed had been receiving our investor updates for months prior to me reaching out about wanting to explore raising a Series A. The updates made it simple to follow our progress and traction, which entirely replaced the need for weeks of diligence and calls (hence the term sheet being signed in just 7 days).

Key Takeaway: Build the habit of writing an investor update, even if you don’t have any investors. It creates accountability for yourself and the team, and can be leveraged as a vehicle to nurture investor relations. If you need some inspiration, you can sign up to receive every investor update I’ve ever sent for beehiiv here (for free).

This past March we still had over $10M in the bank, but our costs were beginning to rise (new hires, vendors, paid acquisition, etc.). As an unprofitable business facing rising costs, your immediate inclination is to slow down… but I saw an opportunity to accelerate and really capture more meaningful market share.

It was a true fork in the road moment for us.

We could have scaled back and grew the business more conservatively, but at what cost? I’d rather we fail after having pulled every possible string to compete and win vs fail because we were too conservative and wrongly assumed the same opportunity would be there for us to capitalize on in the future.

I decided to put out some feelers to investors regarding a possible Series B. I mentioned previously that we had received two term sheets for our Series A; one from Lightspeed and the other was from NEA.

Danielle from NEA was the first person I reached out to, and after a few quick conversations it was apparent that the interest was still there. We did end up running a bit of a “formal” process with a deck and all… but ultimately there was a reason why we had NEA in our top two just a year before.

In April of last year we announced a $33M Series B led by NEA, backed by Lightspeed, Sapphire Sport, DST, and others.

As part of our Series B fundraise, we reserved $1M of allocation for our most loyal users to invest. It was an unconventional move, but our competitive advantage has always been putting our users above all else. Allowing them to become shareholders and participate in the upside was a no brainer for me.

Because of the pace at which we raised our Series A, I actually never even created a deck. But I did create a deck for our Series B that I’m damn proud of.

Beautiful slide imo

I’m making the Series B deck publicly available for the first time ever (unedited raw numbers and all). All you have to do is refer just one person to sign up for Big Desk Energy using your personal referral code: https://mail.bigdeskenergy.com/subscribe?ref=PLACEHOLDER.

Forgive the ask, but I’m a growth guy. Trust me, it’s worth asking your coworker to subscribe to the newsletter 😉.

Key Takeaway: As is true with any negotiation, you want as much leverage as possible. We raised our Series B with $10M in the bank and truly didn’t need to raise additional capital. The fact that we could have walked away at any moment worked out pretty well in our favor.

If you enjoyed this post or know someone who may find it useful, please share it with them and encourage them to subscribe: mail.bigdeskenergy.com/p/how-i-raised-50m

Credit: Danny James

✅ Corner office
✅ Floor-to-ceiling windows
✅ Multiple monitors
✅ Beach views
✅ Lumbar support (don’t sleep on it)

Shoutout Danny for the reader submission 🫡.

Think you can generate a better office? Reply with your submissions 📨.

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We have just one final spot for the Big Desk Energy Mastermind in Costa Rica. Business strategy sessions, hackathons, surf, yoga, etc. (Apply 🏄‍♂️)
Mr Beast’s content secret (Growing Viral)
Palmer Luckey explains why founders need to “make themselves obsolute” (Startup Archive)