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LATEST POSTS 📚

If you’re new, not yet a subscriber, or just plain missed it, here are some of our recent editions.

🌳 16 Ways To Make Your Business More Amazonian. How to take Amazon's leadership principles and apply them to your own business.
📡 Building Realtime AI & Landing Sam Altman As Your Client. An interview with Russ D'Sa, founder & CEO of LiveKit.
👟 Nike’s Fall From Grace & Super Bowl Comeback. From world's most recognised logo to an incumbent on the ropes.

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HOUSEKEEPING 📨

A few weeks back I made a small positioning point against Trump in this newsletter, and following it I had a reader reach out (only one which was cool) to tell me he didn’t appreciate me bringing politics into the newsletter. It’s not what he signed up for. Which, in one way is totally fair and reasonable. In another way, this is Open Source CEO—by Bill Kerr. And part of my wants to just say it as I see it.

And the thing is, I think we should all be conversing back and forth with each other right now. Politics, locally and abroad, is highly fractious right now. Pretending this is business as usual is, in my opinion, wrong. Take this tweet from The White House a couple of days. Does this seem like we are living in usual times? I think not.

No matter if you a diehard MAGA cultist, or a full-blown ‘progressive’ hailing from the centre of Wokeistan—you’ve got to see what’s going on here. The Trump administration is straight-up thumbing its nose at federal courts that ruled Kilmar Ábrego García’s deportation was illegal. This isn’t about politics; it’s about defying the law’s clear call. This is not a fun position for the world to be. Tariff shmariff in comparison to this. Out of interest, before we dive into this stuff, I want to know if you’d read my stuff is I broadened my scope. The main reason I’d like to write about some of these topics is that I would love to use my writing continue to learn in the open. It would be less ‘Trump Is The Devil,’ or ‘DEI Is Bad,’ and more ‘How Tariffs Work’ or ‘Who Is Nayib Bukele.’ Stuff that is relevant to me, me but probably you too.

I am not qualified in many of these topics, but let's be real—I'm not that qualified in business and tech either. Anyway, I’m interested in hearing what you think. For though, here is today’s post!

GUEST POST 💄

How To Raise $50M (Fast)

There are fewer things I like more in this world than beehiiv. As my excited little fingers bash away at my keyboard, the buttons become my letters, my letters become words, and those words craft stories. All while magically being transported into the world’s leading ESP (Email-Service-Provider), beehiv.

beehiiv are not just an ESP, they are the ESP. And if you are serious about building a newsletter media brand today your options are beehiiv #1, daylight 2-7, ConvertKit #8, daylight again until ~the mid twenties, Substack #23. People that build outside of beehiiv are not serious people.

And yes, I am talking my own book. I love beehiiv so much I invested in their most recent round. It’s one of five angel investments I have made and easily the top performing. I invested because I expect beehiiv not only to grow their market share, but to grow the overall pie for the marketing channel that is email. Think of what Shopify did with ecommerce.

So today, I have nice treat for you all. My buddy Tyler, the CEO of beehiiv, is going to detail how they raised their $50M to date. It’s going to be a rip-rocketing tale of success. And if you like it, you can find loads more like it at his personal newsletter, Big Desk Energy. One of the only founder newsletters I look forward to every week. So without further ado, here is the man, the myth, the email marketing legend, Tyler Denk.

A quick backstory

Hey team, Tyler here! Pumped to dive into this one. So here’s the quick backstory: I’ve raised close to $50M for beehiiv across four different rounds—and each one has a totally different story to tell.

Now, if you’re able to bootstrap your business—massive respect. But when my cofounders and I started beehiiv, I was 26 and they were just 23. We didn’t have the cash to cover salaries, vendors, or convince others to quit their jobs and join us.

For us, raising outside capital wasn’t optional, it was necessary. Either we secured some backing, or we kept building beehiiv as a nights-and-weekends project, knowing full well we’d risk falling behind.

How we closed our seed

We spent nearly a year moonlighting the project before we finally had a working prototype in the summer of 2021. Until then, we were juggling full-time jobs and squeezing in beehiiv wherever we could.

Every day, I set up shop in the living room, standing over a stack of books I called a desk, pitching investors one after the other. Not sure who had it worse:

• Me, after hearing 40+ rejections.

• Or my friends, who had to listen to the same pitch 40+ times.

Raising a seed round is a humbling experience. You’re asking people for millions of dollars with no product, no revenue, no traction … and somehow, you’re still surprised when they pass.

I haven’t experienced that many rejections since spring break in college. That last sentence was a lie, I crushed it that spring break.

Midway through July, I got introduced to Howard Lindzon at Social Leverage. He asked if I was free for a 7am Sunday call (total hardo move). The call went well, and he invited me to meet in San Diego later that week.

I was only visiting LA at the time and didn’t have a car, so I rented a Ford Mustang convertible to drive down the Pacific Coast Highway to San Diego. That’s an equally irrelevant detail, but nothing signals desperation more than a rented Ford Mustang.

If you’ve ever raised money, you know how this goes: no one wants to commit until someone does, and then everyone suddenly wants in. Once Social Leverage agreed to lead, the rest of the ‘we’re interested but not ready’ crowd jumped in.

Miraculously I had arrived in LA just a few weeks earlier with a semi-functional prototype and a dream to go all in on this business… and left that July with $2.6M secured in the bank.

💡 Key Takeaway: We had a dozen or so ‘strategic’ investors who were interested but weren’t able to lead the round (the lead investor is the largest check and dictates the terms of the round). It’s important to have interest from smaller strategics so you can signal that there is demand, but it’s also most important to close the lead before accepting those smaller checks. It’s a constant game of cat and mouse and doing what you can to artificially amplify demand.

The messy middle: Seed extension

Fast forward a few months and it turns out that I had grossly underestimated how expensive it is to build a business at this pace and scale. Hiring A+ talent is super expensive, as is offering competitive benefits, insurance, retirement matching, and all that jazz (and there’s a lot of jazz).

I quickly came to the realization that we needed a seed extension. Translation: we fucked up and didn’t raise enough money for our seed.

Given all of the early traction and succeed, I had (wrongly) assumed that we would be able to raise the money in just a few weeks.

But the market had other plans. There was a huge pullback in the spring of 2022 and investors weren’t writing checks. This ended up being the most difficult round we ever raised. To make matters worse, our CTO and cofounder tragically passed away in April.

For me personally, this was the bottom. We just lost a friend and arguably the most important person at the company. My days were split scrambling between damage control and being rejected by every investor I spoke with.

One fund had me jumping through hoops for weeks—calls, diligence, building a data room from scratch—only to come back with the most mind-numbing rejection:

The classic ‘we like everything, but still no’ rejection.

Early investors get outsized upside because they make a bet when there are still plenty of uncertainties; it seems like they forgot they were a seed fund. Whatever, I don’t hold grudges.

Sasha from Creator Ventures, an existing investor from our seed round, caught wind that we were looking to raise additional capital and expressed interest in leading the round. He ended up making dozens of introductions and took charge in pulling the round together (something I’m infinitely grateful for til this day).

Our extension was led by two EU-based VCs: Creator Ventures and Blue Wire Capital. We joke that all the US-based VCs were too scared during the pullback to make a move. Both have been incredible partners and stepped up and bet on us during one of our most difficult times.

💡 Key Takeaway: Capital is commoditized. I’d prefer to spend one week raising funds from lesser-known investors than waste ten weeks chasing capital from a “top-tier” fund (probably with worse terms). Raising money isn’t the job, building a product or service that solves customers’ problems is. Take the path of least resistance and keep building.

Series A: From burnout to term sheet in 7 Days

Fast forward a year and the tables had turned. We were no longer the scrappy underdogs investors brushed off. In fact, it was the opposite. I would receive (and ignore) a few dozen emails each week from funds who wanted to invest.

By May 2023, we were generating roughly $300K in revenue per month. We just had our first profitable month, were growing revenues ~20-25% MoM, and were really beginning to hit our stride as a company.

And while that all sounds great on the surface, we were running on fumes. I was routinely up past midnight answering support tickets when I finished all of my other work, our engineering team was constantly shuffling between fires, and we were always short on bandwidth to execute on the roadmap.

One night I was up past 1am answering support tickets and just absolutely hit a wall. I was voluntarily choosing to play an already difficult game on the hardest level, and was stubbornly choosing to ignore email after email from all the top VCs.

Capital isn’t always the answer, but if it allowed us to hire a few additional engineers, shift my efforts away from support tickets, and invest more into the business… well, that would probably improve the product and morale of the entire team.

Friday, May 12

I wrote a one-pager to myself with a hypothetical: if we did have $10M in the bank tomorrow, what would we even do with it?

Saturday, May 13

I slept on it, re-read it in the morning, and came to the overwhelmingly obvious conclusion that doing anything else was just purely irresponsible.

I replied to a handful of funds that I was down to play ball and explore what a Series A would look like. That kicked off one of the most intense and memorable weeks of my life (will save the full story for another post).

Friday, May 19

We had two term sheets on the table.

Saturday, May 20

We signed our Series A term sheet with Lightspeed (just one week after waking up and deciding we should raise a round).

I owe it mostly to our monthly investor updates; a detailed update I regularly send to all of our current investors, employees, friends, and family. Typically when I get introduced to new investors, I’ll add them to the list in place of ‘grabbing a coffee.’

Faraz from Lightspeed had been receiving our investor updates for months prior to me reaching out about wanting to explore raising a Series A. The updates made it simple to follow our progress and traction, which entirely replaced the need for weeks of diligence and calls (hence the term sheet being signed in just 7 days).

💡 Key Takeaway: Build the habit of writing an investor update, even if you don’t have any investors. It creates accountability for yourself and the team, and can be leveraged as a vehicle to nurture investor relations. If you need some inspiration, you can sign up to receive every investor update I’ve ever sent for beehiiv here (for free).

A quick note on building-in-public

I’ve always loved startups—and I’ve always wished I could’ve followed along as some of my favorite founders built their companies in real time. So when we started beehiiv, I made a decision early on: I was going to share the journey as it happened—both the wins and the losses.

The wins are easy to talk about (and I’ve shared a few here already). But I try to be just as open about the hard stuff too.

While I genuinely want to provide value and maybe inspire a few future founders, building in public has also become a real superpower for us. (I wrote a full post about it here)—it’s helped us reach new audiences, attract new users, and even get in front of some game-changing investors.

And as I kept sharing our progress, dozens of investors started reaching out each week. Most I ignored. But not all. Which brings us to the final chapter of this story—raising our Series B.

Series B: Go big or go home

This past March we still had over $10M in the bank, but our costs were beginning to rise (new hires, vendors, paid acquisition, etc.). As an unprofitable business facing rising costs, your immediate inclination is to slow down… but I saw an opportunity to accelerate and really capture more meaningful market share.

It was a true fork in the road moment for us.

We could have scaled back and grew the business more conservatively, but at what cost? I’d rather we fail after having pulled every possible string to compete and win vs fail because we were too conservative and wrongly assumed the same opportunity would be there for us to capitalize on in the future.

I decided to put out some feelers to investors regarding a possible Series B. I mentioned previously that we had received two term sheets for our Series A; one from Lightspeed and the other was from NEA.

Danielle from NEA was the first person I reached out to, and after a few quick conversations it was apparent that the interest was still there. We did end up running a bit of a “formal” process with a deck and all… but ultimately there was a reason why we had NEA in our top two just a year before.

In April of last year we announced a $33M Series B led by NEA, backed by Lightspeed, Sapphire Sport, DST, and others.

As part of our Series B fundraise, we reserved $1M of allocation for our most loyal users to invest. It was an unconventional move, but our competitive advantage has always been putting our users above all else. Allowing them to become shareholders and participate in the upside was a no brainer for me.

And ever since our Series B, I’ve been in founder mode operating and scaling the business the best I can 😏.

💡 Key Takeaway: As is true with any negotiation, you want as much leverage as possible. We raised our Series B with $10M in the bank and truly didn’t need to raise additional capital. The fact that we could have walked away at any moment worked out pretty well in our favor.

Summary

Hey team, Doc here again to wrap us up. I hope you enjoyed this one with Tyler. He’s a guy I look up to for a number of reasons. beehiiv as a platform ships harder and faster than any platform I have ever seen. And I mean that. They ship like their lives depend on it while competitors like ConvertKit spend 12 months talking about nothing but a useless rebrands.

But I also look up to Tyler because he, like a few other great founders I’ve gotten to know—James from PostHog + Nick from Attio come to mind—does the whole build-in-public / founder brand better than most. And I am just here for that. So my ask for you today is to go and subscribe to Big Desk Energy, and follow Tyler’s journey. Him and beehiiv are absolutely ones to watch in the coming years.

Extra reading

• How Athyna Makes Remote, Work - January, 2024

• Tyler Denk & beehiiv Are Growing Really, Really Fast - March, 2024

• The Acquisition Mechanics: beehiiv + Swapstack - January, 2025

And that’s it! You can follow Tyler on LinkedIn and Twitter and also checkout beehiiv on their website to learn more.

BRAIN FOOD 🧠 

TWEETS OF THE WEEK 🐣 

TOOLS WE USE 🛠️

Every week we highlight tools we actually use inside of our business and give them an honest review. Today we are highlighting Paddle—a merchant of record, managing payments, tax and compliance needs—we use their ProfitWell tool.

See the full set of tools we use inside of Athyna & Open Source CEO here.

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