Hello world, and welcome to the twelfth issue of Thursday Thoughts.
Each week, founders and investors share their thoughts on fundraising trends and strategy.
Dove Metrics is sponsored by The Index Coop - a community-led initiative focused on making crypto investing simple, accessible, and safe. They create and maintain the world’s best crypto index products: DeFi Pulse Index ($DPI), ETH2x-Flexible Leverage Index (ETH2x-FLI), BTC2x-Flexible Leverage Index (BTC2x-FLI), Metaverse Index ($MVI), and Bankless BED Index ($BED).
Dune Analytics is the most successful community-centric solution to query, visualize, share, and explore smart contract data from public blockchains.
After a $2M Seed round in September 2020, they recently announced their $8M Series A round, with Union Square Ventures, Redpoint, Dragonfly Capital Partners, and Multicoin Capital.
Co-founder and CEO Fredrik Haga sat down with us and answered a few questions about his company's fundraising journey.
You started building Dune Analytics in August 2018 - it took you more than two years to raise (or at least announce) your seed round in September 2020. What was that experience like? How did bootstrapping Dune at the start influence the company?
We were from the getgo super focused on building something very useful. So we figured a paying customer is the best way to prove that. We signed Dharma as our first customer 4 months after we started. We initially spent 7 months working full-time on Dune with no salary.
Then we got into Binance Labs and did our pre-seed with them. At the end of that program there was a pitch day in SF and we tried to do a seed, but couldn't do it. We went back SF 8 months later in February 2020 and tried to do a seed round again. Still no luck. So we kept on keeping on and didn’t hire anyone, keeping burn at a minimum. Finally in late summer 2020 crypto summer occurred and our traction started to pick up significantly. Then we managed to do a seed round, but it was not obvious - we spent some time gathering those checks and convincing the funds.
So yeah not having funding has significantly shaped us. The great thing about it has been that we think really really hard on what we prioritise and which direction we take. The initial hardship was part of the reason why we did Dune as an open community product, as opposed to some closed access thing.
You and Mats are in Oslo - not historically a hotbed of crypto investing activity. Did that make raising money harder?
Probably, yes. At least when we started out post-covid. I’m pretty sure that a project with the same traction we had early on based in SF would have easily raised a round long before we did. However, not having money early on really required us to test our assumptions about the product and business we were building.
You presumably have a really good pulse on emerging projects given your business. Do your investors lean into that for diligence on other projects?
Absolutely. That has become a major advantage for fundraising: that ~all investors in the space use and like our product. It’s so amazing to see a new project emerge and just like that someone creates a dashboard for it. I think within an hour of EIP1559 being live there were 10 dashboards on Dune. Similarly when loot exploded recently the Dune dashboards occurred instantly. It really displays the power of this community, and it’s incredibly exciting that these insights become available to anyone for free, not just the privileged few.
As mentioned in your Series A announcement, you didn't know anyone in crypto when you started building back in 2018 - any tips to founders with no connections in the space seeking to raise capital?
Initially, we went to all the crypto events we possibly could. ETH Berlin, ETH Denver, ETH CC, Devcon++ While we felt like outsiders for some time we also came to realize that crypto is still so early that most other folks are not too established either. Luckily, most people in crypto are very approachable. Compared to other more established industries I think crypto is very easy to break into community/network-wise. As I’ve described in this post crypto is born and raised on the internet, as opposed to almost any other industry.
In one way it’s harder when you can’t fly around and meet people due to covid, but on the other hand I’d say it’s now way easier because you can just go into Discords and DAOs and participate. So I actually think that getting going in the crypto space is easier and more accessible than ever.
Redpoint came into this round - they're not historically associated with crypto investing. How did that come together? How were those conversations different than with crypto native funds?
Good question! They quickly displayed an extremely strong conviction in Dune, and have previously funded some amazing data and tech companies. While crypto-centric investors are great, there's a lot about building and organizing a team of amazing people that’s the same or very similar to startups outside of crypto. Redpoint has so far been incredibly helpful for us.
Many thanks to Fredrik for sharing such valuable insights.
See you on Tuesday for Dove Dispatch #18,
The Dove Mountain Team