Pat Sullivan, founder and former CEO of ACT! and SalesLogix is quite familiar with the concept of raising capital. Now with his new startup Contatta, he approaches raises differently.
Contatta recently announced the completion of a $3.25 million financing round led by Grayhawk Capital Venture Fund II and Kickstart Seed Fund II.
According to Contatta, all of their current board members reinvested in this round, including Grayhawk, bringing total financing to date at $6.4 million. Read more about Contatta’s raise here.
Watch this 1-minute video on Pat’s response to “The Myths of Raising Capital” here.
5 thoughts on “Pat Sullivan talks "The Myths of Raising Capital" – video”
It’s my understanding that unless you hold 51% or more of the ownership of the company, investors as well as (or in concert with) the board of directors could vote a CEO out in favor of a better candidate.
I do agree with Sullivan’s premise — investors don’t want to meddle with a company, they do however want it to perform.
I am curious about Sullivan’s thoughts on the need/desire to go after venture capital and why it is better than the desire to bootstrap and maintain total ownership of the company.
I think Pat’s point is that investors generally speaking, investors don’t intend on investing in your company and then getting rid of you, even if they own a majority stake. However, investors do react quickly to changing management who doesn’t perform as expected or promised. So in that sense, you are right that if the founder doesn’t have controlling stake, there is always that risk.
Investors don’t intend on investing and then taking over but they want that option and you will give it to them if you take money too early! Bootstrap, bootstrap, bootstrap is your best friend although you won’t think so at first. Spend a little time in Silicon Valley and learn what other start-ups are giving away and why….we are on our 2nd round and will post a link to my Twitter about our experience. Every last detail…Did I say Bootstrap? Enjoy! Follow @Tonyrides1
Tony, you should write an article for AZ Tech Beat about your experience.
Definitely. Hope all is well Hamid
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