capital will still be required to build a dominant cloud business. If you plan these stages thoughtfully, you will be able to minimize dilution by progressively decreas- ing your cost of capital, mixing seed capital with venture capital and possibly debt before attracting public market investors. With the increased sophistication of debt and equity providers in the cloud space, we are now seeing multiples of CMRR (and similar subscription measures) as the primary valuation metric. It is worth noting that many businesses are not natural candidates for venture capital and should look to other sources of capital for early funding. Friends, family mem- bers, former co-workers, and strategic partners are all time-tested pools of friendly startup capital. Venture capital firms can be extremely valuable as partners in your Adam Miller business, but are really only a fit for opportunities where the team is “swinging big” CEO, Cornerstone and have the potential to be billion dollar businesses at some point. OnDemand (NASDAQ:CSOD) Although we place a great emphasis on the risk of underestimating the cash cushion needed to build a large cloud business, another great risk is that of underinvestment “In the early days, our in the business. Trust your metrics and your dashboard and invest behind success. company was literally financed on our personal If your cloud metrics show strength and your unit economics are meaningfully credit cards so I tracked positive, then it would actually be irresponsible to not invest aggressively in growth. our cash position on a The Cloud Computing market is no longer a secret and the competitive dynamics daily basis. Bringing on continue to heat up quickly. If customers love your product and the financials make Bessemer as an investor allowed us to then ac- sense – it’s time to run after the opportunity aggressively to grab the full market po- celerate our business and tential, or someone else will! take it to the next level. But even to this day as a If this sounds like your business, please reach out to us at Bessemer as we’d love to be $1B+ public company, old habits die hard; cash your partner and join you for the path ahead. is still king.” Bessemer Venture Partners 25