Monday, April 7, 2014

You Don't Need a Technical Co-Founder to Receive Funding

At least that is what we have seen recently. Is there a trend starting where companies are getting Series A investments from top tier VC's without a technical co-founder to run the product engineering?

Not sure if it is a trend, but we have run into a couple of companies recently that were able to achieve their first round of funding without the benefit of someone running the engineering team.

In some ways it makes sense. The risk in web startups is not usually a technical one. It is mostly assumed that these applications can be built and the technology challenge is minimal. The risk is that the companies will ever receive traction, acquire users and generate significant revenue.

Both of these startups had significant revenue traction and a scalable business model. The products were developed with outside agencies and web development firms using seed money. Only after they had closed their Series A, have they begun the search for their VP of Engineering.

What do you think? Will we see this more often in the future or is this an anomaly?

Once the fundings have been publicly announced we will update this post with the names of the companies.

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