Before raising more funds, bill-paying startup Doxo waited for its revenue to exceeded the $29 million it had raised historically.
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revenue to exceed the $29 million it had raised historically."We've seen an over-capitalization lead to some really crazy behavior," he says of the broader startup market.After three funding rounds in its first three years in business, bill-paying startup Doxo found its momentum stalled and investor enthusiasm waning. Instead of signing an unfavorable term sheet to forge onwards, CEO Steve Shivers chose to spurn venture capital entirely until he could reset the business.
The Seattle-based company announced Wednesday that it had raised $18.5 million in Series C financing led by Jackson Square Ventures, its first new round in 11 years. It’s a small size for a funding round at this stage—perhaps more reflective of the venture atmosphere when it last raised than in 2022—but a decade of bootstrapping has taught Shivers to be conservative with capital.
VC-backed CEOs, Shivers says, can either “try to grow the business to catch up with the funding,” or they can take the opposite approach, as he believes Doxo has done. He says he twice turned down opportunities to raise new venture capital over the past four years because the terms were too one-sided to benefit the investor. “By waiting, we raised as much or more capital with way less dilution,” he says.
Founded in 2008, Doxo launched as an all-in-one bill management platform for consumers, charging a per-bill fee or a monthly subscription for unlimited service. Business growth moved slower than anticipated so following its Series B round in 2011, the company cut back on hiring and experimented with new products. “Our choice was to be lean and capital efficient, or to go raise and take a ton of dilution at a valuation that we didn’t think reflected the potential,” Shivers says.