eToro announced today that we completed a round
‘Social’ Investment Network eToro Is Picking Up Another $15 Million …
A lot of people asked me why we raised the money, and when I say that we want to expand and scale our business faster it doesn’t do the trick, I realize its more perception than anything else.
We are building something REALLY REALLY BIG, that will CHANGE THE WORLD.
My father used to tell me when I was 15, “raise money when you can not when you need”, that’s an equity markets known concept saying : you don’t know when markets are bad, and when markets are bad, business is usually bad, so when markets are good, raise money cause you can. This has very powerful impact on a 15 year old. So 16 years later, I still think raising money is ALWAYS good (in good valuation).
So why raise money – ALWAYS raise money if you believe what you are doing will return BIG time for all stakeholders. also raise money when you really need money . also raise money if you can.
(ALWAYS is only true in good valuations, if you are in downround you should consider otherwise)
Money raised, means you have more margin, more margin you can pivot more, you can experiment more, you can grow faster, you can front run product, or front run sales, you can simply do more, it doesn’t matter if you are a small start up and you raise 500K to test an idea, 15M to scale a bigger vision, or 3B to fight google, margin (of error) is good for any business to be able to innovate. That’s why :
Facebook Borrows $3 Billion and Increases Line of Credit
FarmVille-Maker Zynga Has Raised $410 Million –
(and another 20…)
Groupon Raises More Than Half of $950 Million Round – Bloomberg
A VC: Twitter Fills The Tank
So why is it fun ? because it shows someone smart believes in your vision and sees it is happening even better than you (you are already “pot” committed) . When I was 26, and I met my first early angels, I was pitching the vision, still the same vision today “open the markets for everyone”, and the people early on believed in us (the founders) and that the concept can be done, over the next rounds it became the vision, the execution level, management team the KPI’s (yes revenues always help, active users too), but its always first and foremost believing in something big that all our investors share, our envisioned future of finance, and our ability to disrupt towards it and monetize it.
Entrepreneurs are lucky today to have sources of finance, who are willing to invest on the possibility of success/growth (high P/E multiples, or even N/A), this enables to raise money for innovation, since innovation by definition is new, new things need to grow, and in order to finance growth you need growth or longer term investors.
So if you have a dream, than try building it, and if people believe in your vision and you execute well, and you are constantly lucky, then you will find investors to believe in your vision and be able to make your dreams come true.
My dream is for eToro to be the largest Investment Network in the world when Investment networks are bigger than all the existing investment houses.