Why One Startup Is Telling Investors Not to Wire the Money

A few months ago, I wrote about a number of early-stage startup founders who chose not to raise venture capital after an initial seed round, instead running their startups on the sales their businesses were generating. Dan Shipper, founder of media and artificial intelligence software startup Every, is taking this “seed-strapping” approach a step further.

His 14-person startup said last week it had raised $2 million in seed funding from LinkedIn co-founder Reid Hoffman and Starting Line, its second round of venture funding after raising $700,000 in pre-seed funding from Bedrock and other investors. But instead of receiving the new round all at once, as is typical for startups, Every will only draw on that cash when it needs it. 

“It’s a little bit like a line of credit,” Shipper told me. “I just didn’t want to be staring at a bunch of cash in a bank account.”