At an event in San Francisco Thursday night, Instagram founder Kevin Systrom said that the most important thing to take into consideration when raising money for a startup is finding the right people to work with. “It’s all about the partners you work with,” Systrom said in an on-stage interview for the PandoMonthly event series. “One of the risks about larger firms is just them not having a lot of time to chat with you and not realising that you’re pivoting … and that’s just a risk you take.”
Systrom doesn’t think startups should necessarily avoid working with larger firms, but still emphasises that when you bring someone onto the board, it’s essentially for life.
Immediately before Facebook acquired Instagram for a hefty $1 billion, the company raised a large round led by Sequoia Capital. Previously, Instagram had raised money from investors like Square CEO Jack Dorsey; Chris Sacca, a former Google manager who was an early backer of Twitter; Baseline Ventures; and Benchmark Capital.
But Instagram’s very first investors were Andreessen Horowitz.
The mention of “pivoting” may be an oblique reference to that firm, which backed Instagram when it was the maker of a location-based check-in service called Burbn. After Systrom switched gears to focus the company on a photo-sharing app, Andreessen Horowitz declined to follow up its initial investment with additional money, citing a conflict with another photo-sharing startup it had backed.
People close to Systrom told the New York Times that Andreessen Horowitz’s partners rarely spoke with him after their initial investment.
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