What can CustomMade do with it's new round of financing, 18 million dollars? a lot. I am lucky enough to experience the inside view of a large funding round like this for the second time. The first one, AdvisorTech Corp, was during the Internet Bubble years. 20 millions were nothing to talk about. This time around, the market conditions are much more realistic, and the CustomMade round is well deserved and it is a vote of confidence by the markets. One of the main success factors for CustomMade is the pairing of co-founders Seth Rosen and Mike Selguero. They have complimentary skills in a way that I have not seen for a long time.
Another factor of CustomMade's success is the first mover's advantage. While being first does not guarantee success, being first and having a team that have worked and worked to understand the customer gives CustomMade a tremendous advantage over any competitors. Any two sided market place business is difficult to understand. Which side of the market should subsidize the transaction (makers)? How to deal with competition within one side (how to encourage maker participation without shrinking the maker pool by favoring high performers)? How to match make between the two sides (customers and makers)? The CustomMade team has built up a lot of internal knowledge of how to make this market work.
But remember, to quote Mike quoting Seth:
A dollar raised is a dollar not earned -- Seth Rosen
This is a beautiful insight into the truth about startups -- Having raised this large round of financing just means that we are in the hot seat to delivery value to the investors by multiplying those dollars into revenue growth.