Glowforge announces $22 million in financing

[szara]

I’m glad you are entertaining yourself, because I sure as heck am not interested in entertaining you!! I am stating what I think about the lack of progress that I see happening! We should know a little more about the basic (promised) features, not a single screen shot of the GUI, or a discussion of leather key chains and how beautiful they are (on whatever machine they were cut)!!

[jbmanning5]

@jdodds

When you hear anyone hereabouts say Glowforge doesn’t (or won’t) need that $22 Mil. it’s akin to them saying “Click your heels together three times and say ‘There’s no place like home’ and you’ll be there’.”, they’re dreaming in technicolor. They do or will need it, period. There is no way in “H - E - ‘double hockey sticks’” Dan and the other co-founders want to give up equity WAY in excess of the value of the $22 Mill to obtain funding that funding if they don’t or will not need it. Like it was said, the VC’s are doubling down, all or nothing. And for that, they would demand WAY more than the double down amount on the upside. That people is how things work on the finance side of business.

You’re correct. And they are either getting it from a round of funding or from the bank. I know a few banks specialize in startup notes but, as an early adopter on preorder, I’d rather see those dollars coming in the way of founders relinquishing some equity rather than debt.

[jdodds]

@szara

I am stating what I think about the lack of progress that I see happening! We should know a little more about the basic (promised) features, not a single screen shot of the GUI, or a discussion of leather key chains and how beautiful they are (on whatever machine they were cut)!!

It took me quite a while to come to grips with the fact that we the crowdfunders are going to get updates on functionality, etc., when, and only when, Dan et al believe it is in their best interest to do so. If we’re not happy with that, we best learn to get over it. Hey, I even put up a little spreadsheet at one point asking if it could be updated for anticipated release date of all features. That request was politely and discretely turned down.

I took a deep breath and changed my approach. For me, features and functionality that I see in videos at Maker Faires, etc., become the benchmark, the only features that are working at least at some level of reliability. And since people always love to show the best they’ve got, what you see is what you get and nothing else is up to snuff at that point in time. That is my new measuring stick.

Then the now infamous $22 Mil lands on the table. Some are furious that they were not told that more money would be needed implying that the project was near failure. Others, LIKE MYSELF are thrilled as no matter how close the project was to final completion or complete disaster, it is now $22 Mill more likely to succeed. Some of us see this as a good thing.

Now, will the Glowforges be delivered by December end? I’ve no idea. Heck, even Dan et al may not be 100% confident on that one. Who knows. Will it have full promised functionality at that point? Probably not based on the survey from back a month of so. However, $22 Mill more available cash will make it that much more likely to have a positive outcome for the crowdfunders.

Only question remaining for any individual whom is uncomfortable enough that they do not want to go forward. Do I want to ask for my money back and move on? Me, I’m in for the count.

Why do I find this all so entertaining? Because there are 100’s of post on the topic that just never stop recirculating in one form or another. The questions and responses are pretty much always the same.

[Clone]

Sounds like good news to me. Having worked on massive multi year projects with multi 100 million dollar budgets, more money never hurt even if it wasn’t needed. And at the end of the day if the goal was accomplished you just return it to the cost center or you spin up a mini to allocate it to some pipe dream that you didnt think you where going to be able to do in the original scope.

[laird]

I’ve VC-funded and sold two companies, and if you can raise money when you don’t “need it” you get a much better deal than if you wait until you “need it”, because when you need money the investor knows it and has more deal leverage. If you don’t need the money, the investor wants in because he thinks you’re going to win, so you have more deal leverage. So the company gets more money for less equity/terms than they would otherwise, which is good for them. And if the investor gets into a winning company, pre-empting other investors, that’s still good for the investor.

[ray716]

@jdodds

there are 100’s of post on the topic that just never stop recirculating in one form or another. The questions and responses are pretty much always the same.

And this is why I don’t always post… because by the time I am able to read things, someone else has already said what I would have said, but they say it much better.

As far as this thread goes, this just makes me more interested in start-ups and also more scared to even try since I don’t have a mind for money, just for ideas…

[dan]

@szara

It is disappointing to read (at this late stage) that Glowforge needed more funding in order to just now begin distributing beta units!

I apologize for being unclear: we did not require any additional funding to deliver beta units or for any other purpose.

@szara

Why couldn’t the $27+ million (crowd funding) and the $9 million (initial private funding) be used for this?

We prefer to use investor dollars to operate the company, not the funds you paid us. Should something happen to us, that means your funds would still be unspent and available for refunds.

@szara

Oh, we discovered some issues that have to be corrected, so we need more time in order to ship you the best product !

I hope that does not occur, but you’re quite right that it’s possible: if we find problems, we will postpone and accept that many people will want refunds, rather than ship a product that is substandard. As I’ve always said, shipping on time is the second most important thing to us, second only to shipping the high quality product you paid for and deserve.

@szara

I am tempted to cancel my order and use my money more productively on other tools that I can put to use now!

I’d understand and we’d issue you a full refund right away if that’s what’s right for you.

@szara

Dan has been asking the community to suggest features they’d want included in the laser

Please ignore that request if it causes you upset or frustration.

@MikeH

Just a guess, but maybe GF and investors are now seeing units working so well that they foresee demand for GFs after release increasing substantially and want to be ready to ramp up production quickly.

Quite true. If we know that we can pour resources into building a sustainable business after we complete your orders, then everything is made easier: we can spin up the production lines to higher volumes, we can negotiate for higher quality components for the same price, etc.

@Jules

Investors do not hand over money out of the goodness of their hearts

Very, very true. Although a quick google of Brad Feld will show that he is, indeed, a hell of a guy with a heart of gold - but not someone who will invest in a bad deal.

@szara

So how can I be confident that the initial features are working?

I understand your concerns. As we begin shipping large numbers of units, you’ll have a chance to read reviews of the product and see for yourself. You’ll also have the option of deferring your shipment (for example, if you’re early in line, and want to see what others say first) for later.

I don’t think you’ll be disappointed, though!

@printolaser

I know (in my heart) that Tony betas the sh!t out of one continuously! I would be surprised if the designers on staff weren’t in the foxhole too.

You have no idea. @Nick and @shell log the most hours by a long shot, but it’s a hot competition among the company for 3rd place. Not technically beta, though, since that refers to outside-the-company.

@jdodds

they no doubt had to hand over a lot more upside value than the value of the round 2 funding.

While we haven’t announced the economics of this round, we were happy to have the company valued much more highly than it was last time, so our equity dilution was lower.

@jdodds

There can be a minus of Foundry Group et al jumping in, in that they have WAY more equity now and WAY more control (I’m guessing here).

Not an unreasonable supposition, but we did not in fact add any board members (still just Brad and I), nor was company control meaningfully impacted in this round. More importantly, we chose Brad as a partner from the start because he’s legendary in his support of companies doing what they believe to be right, even - and in fact particularly - when it flies in the face of the investors’ short term self interest.

@printolaser

So it wouldn’t surprise me if the founders sold out and prepared themselves to feed on the addictive adrenaline of the next venture.

There was a great Zuckerberg line about ‘if I sold Facebook, I’d just start another social network’. Who knows what the future may hold, but - this is what I’ve dreamed of doing, in one way or another, since I was 18 and first discovered lasers.

@laird

I’ve VC-funded and sold two companies, and if you can raise money when you don’t “need it” you get a much better deal than if you wait until you “need it”, because when you need money the investor knows it and has more deal leverage.

Nailed it.

[cynd11]

@dan

More importantly, we chose Brad as a partner from the start because he’s legendary in his support of companies doing what they believe to be right, even - and in fact particularly - when it flies in the face of the investors’ short term self interest.

This makes me very happy. Finally, some focus by a company on more than just the next quarter.

[Clone]

thank you for the time for a long and private response (as talking about control and equity is not something typically shared with the public for a private company)

[Scott.Burns]

@dan

this is what I’ve dreamed of doing, in one way or another, since I was 18 and first discovered lasers

I remember that feeling, but I was quite a bit younger. I studied the theory behind lasers and spent quite a bit of time with two hand mirrors and a flashlight trying to create my own laser. lol

[jdodds]

@dan

Not an unreasonable supposition, but we did not in fact add any board members (still just Brad and I), nor was company control meaningfully impacted in this round. More importantly, we chose Brad as a partner from the start because he’s legendary in his support of companies doing what they believe to be right, even - and in fact particularly - when it flies in the face of the investors’ short term self interest.

I’d say you picked well.

[Jules]

@dan

Should something happen to us, that means your funds would still be unspent and available for refunds.

ROFL! (Actually clicked the link.)

I was thinking more along the lines of the whole team being permanently stuck in an elevator somewhere and having to be fed by feeder tube…“Okay Frank - pipe some more chicken soup in here, will ya?”

[marmak3261]

Thanks for the well-organized and thorough post. Another epic serial quote that displays tremendous discipline, good will and helpful information.

[Xabbess]

@dan

Should something happen to us

Could not help but find some humor in this, as ‘the big one’…the anticipated earthquake in the NW… will most certainly impact a whole lot of us buyers. It will be helpful to still HAVE an address where to ship the Glowforge!

[Xabbess]

@Jules

(Actually clicked the link.)

Ditto. I’m such a sucker for stuff like that!

[PrintToLaser]

@dan

This is what I’ve dreamed of doing, in one way or another, since I was 18 and first discovered lasers

Well then, I’d say you achieved your dream - as well as mine of owning one!

“If something should happen to us”
I suspect there will be a measurable seismic effect when someone pops into the forum and announces They just emailed me for my shipping address!!

[dan]

@jdodds

I’d say you picked well.

Having worked with him for a while now, I’d say the respect is well earned.

[volivaa]

Dan and I (and I suspect a few others here) are alumni from the National Youth Science Camp (NYSC). Here is a nice write up of him and Glowforge’s recent funding announcement on our website. If you know of qualified students, please encourage them to apply. http://www.nysf.com/w/mr-dan-shapiro-nyscamp-or-1993/

[dan]

I think I may have mentioned this before, but Marissa Mayer and I were friends when we were both in NYSC. Definitely encourage your favorite high school student to apply!

[volivaa]

Here’s another NYSC alumni that plans to 3D print 1000 completely free prosthetic hands for needy kids this year and 4000 next year.

AJ+