Our Series A closed in October 2023. $14M, led by Camber Creek. From the outside, and on the press release, this was a good outcome. From the inside, the eight months leading up to that closing were the hardest months we have had as a company, and I almost walked away from the deal twice.

I have not written about this publicly because I wasn't sure how to do it without making one or more of the people involved sound bad. Enough time has passed now that I think I can write about it honestly without doing that. The people involved were all doing their jobs. The system, more than any individual, is the thing I want to describe.

Where we were going into it

By Q1 2023 we had about 200 customer properties on the platform, ARR around $4.1M, growing roughly 8 percent month over month, 22 employees. The seed round from 2019 was running thin. We had maybe 11 months of runway at the burn we were at. The choice was raise, cut, or get to default alive on revenue. We picked raise because the growth was real and the market was massive.

I had been told, by founders I respected, that Series A fundraising in 2023 would be brutal. The 2021 vintage was unwinding. Multiples had compressed. Funds were being more careful. I told myself I was prepared for brutal. I was not prepared.

The thing that broke first

We took our first meetings in February 2023. By March we had four firms in active diligence. By April we had three soft term sheets. The numbers were all lower than I had been told to expect, but they were real offers, and I was relieved that we were going to get something done.

And then in May, two of the three pulled.

One pulled because their fund hit some internal threshold I didn't fully understand. The other pulled because their partner left the firm three weeks into our deal, and the new partner did not want to inherit a deal they hadn't sourced. Neither of these reasons had anything to do with Plotline. Both of them looked, from the outside, exactly like "we passed."

The third firm, sensing blood in the water, came back and renegotiated. The new offer was at a valuation about 40 percent lower than the original. It also had terms I didn't love. A liquidation preference structure that would have hurt the team in any outcome short of a unicorn exit. A board composition that gave the lead investor effective control.

I asked our attorney to walk me through what we were actually agreeing to. He did. I left that call feeling sick.

The June from hell

I have a notebook from June 2023 and the entries get progressively worse. The first week I wrote, "I think we should counter on the prefs and accept the rest." The second week I wrote, "If they won't move on prefs we should walk." The third week I wrote, "We have 6 months of runway, can we cut to 12, what does that look like." The fourth week I wrote nothing. I think that was the week I gave up.

Whitney was the one who actually pulled me out of it. She did not give me a pep talk. She asked me a question. She asked, "If you were advising your friend who was running this company, what would you tell him to do." I sat with the question for a couple of days. The answer was that I would tell him to cut burn, get to default alive, and raise from a position of strength in 18 months.

So that's what we did.

The cuts

I have not written about this either. We let four people go in late June 2023. Two on the GTM side, two engineers. They were good people who didn't deserve it. I made the calls myself. Two of them are still on speaking terms with me. One of them, fairly, is not.

We also cut salaries for the leadership team by 25 percent for six months. I cut mine by 40 percent. Whitney covered our mortgage for those six months, which is a sentence I am uncomfortable writing because we should have had more savings, and I am still not sure why we didn't.

The cuts got us from 6 months of runway to about 14 months. The product team kept shipping. The remaining sales team closed more deals than I would have predicted, because they were either fully bought in or about to leave, and either way they worked hard.

What happened next

By September 2023 we had grown ARR to about $5.4M, hit profitable for one month (October was the first ever), and had three new firms in conversations.

Camber Creek led the round we eventually closed. The terms were dramatically better than the May offer. Higher valuation, clean preferences, normal board. Casey, the partner who led the deal, told me later that what got him over the line was that we had run the company through the cuts and come out the other side stronger. He said that is rare and that he wanted to back people who could do it.

I think about that comment a lot. Because the version of me in May 2023 was about to sign a deal that would have, in hindsight, been pretty bad for the company. And the only reason I didn't is that the deal was so bad that walking away seemed less crazy than signing it. Which is to say, I got lucky that the bad deal was bad enough to scare me off.

What I would do differently

Honestly, almost everything. I should have started the raise earlier. I should have had a clearer view of what burn cuts looked like before I started taking meetings, so that "walk" was always a credible option. I should have run a tighter process with fewer parallel firms.

The biggest thing, though, is this. I should have understood, before I started, that a Series A is not a stamp of approval from grown ups on what you have built. It is a financing transaction. The terms matter more than the headline. The investor matters more than the valuation. The position you negotiate from matters more than anything else.

I wrote half of these things on a Post-it that is still on my monitor.

The other half I tell other founders when they ask. Some of them listen. Most of them don't, the same way I didn't, because you have to live through it to actually believe it.