At Jimdo we’ve built a rapidly growing business, which has garnered some interest from venture capital over the last few years. We’ve put it off because we never really had the feeling that money would make us any faster. But sometime last fall we found an area where money might help us grow more quickly: online marketing. We went out, gave our pitch, and had a very good term sheet from a top-tier VC on the table. Valuation, investment amount (8 figures) and the rest of the terms were everything we could have asked for. The discussions were great; they really helped us understand our space better. On a personal level we got along very well – we basically just needed to sign.
The round would have given us the chance to become No. 1 in our market in the very near future. Jimdo is currently 3rd behind Wix ($58M raised) and Weebly (rumored $20M). To put the numbers in perspective, we’ve only taken € 500k in funding and are growing from our own revenue. In comparison, 1&1, whose MyWebsite product is based on an old version of Jimdo, invested over € 37M (in advertising alone!) in 2011, and the plan is to push MyWebsite even more this year…
Why did we say no to this huge opportunity?
By taking a venture round, you basically commit to an exit. There are usually only two ways this can happen: a sale (to a big corporation like Google, Facebook, or Microsoft) or an IPO. Selling (out) to a big corporation is not an option for us. We’re building this company for the long run. We want to see Jimdo and everything it stands for as a proud and independent entity, not subsumed into some corporate behemoth (see Christian’s post “Dear Entrepreneurs, please don’t sell your company“).
And an IPO? Well, unless you’re an extraordinarily successful company like Apple or Google, publicly-traded and sustainable just don’t fit together. Shareholders interests are short-term, looking at the next quarter’s profits. But we believe that decisions made with the long view in mind are better for the business and the company’s bottom line. We think long-term and walking away from venture capital means we keep the freedom to make decisions that way.
What made the decision very easy is that the three of us are not driven by material success. Driving a Maserati or living in a big house wouldn’t make us any happier. A big exit to make lots of money doesn’t excite us. For us, Jimdo is a one-time chance: we have a great product, a great team and lots of opportunities ahead. The most fun part is working together with our team and building the product and company! We founded Jimdo on an old farm with basically nothing. We want to prove that we can build a big, innovative company with strong values together with our awesome team. That’s what drives us.
It’s our company
We went through it when United Internet owned 30% of Jimdo (we bought back their shares in 2009 when our partnership with 1&1 ended). Although we got along well with United Internet as an investor, it’s a completely different story if you have to justify decisions to a board. Jimdo is our company, and the buck stops here. That doesn’t mean we don’t want outside help—we want to make our decisions independently. And there’s another side to it: walking through the door each morning knowing this is your company—you’re not just a hired gun.
By the way: EFF (European Founders Fund) and one business angel are remaining investors in Jimdo; the three founders hold the vast majority of the shares.
With every decision, there are consequences. We won’t be able to outspend our competitors on the marketing side… at least not right now. However, we believe that in the long run, the company with the best product and strongest core values will come out on top. Thus, our mission is to renew our focus on product development—knowing that the amazing and passionate community users in the world will help spread the word. The entire Jimdo team is committed to this mission, and we’re all thrilled for the journey.