Retool founder David Hsu says most of startup fundraising is about"ego and optics.""That's not a costless game," he argues, for what it means for employee shares.When Retool CEO David Hsu set out recently to raise fresh funding for his low-code software startup, he took an unusual risk: leave as much money on the table as possible.
“How we build software really hasn’t changed very much in the past 20 or 30 years. You sit down in front of a computer and you write code,” Hsu says. “We think that there could be a substantially faster way of building software with much higher levels of control.” “You talk to candidates these days, and I think a lot are worried about valuations being pretty high and having already missed the boat,” Hsu says. “Team is what got us here, which is why we feel a sense of duty to get the team a great strike price on their options.”
Outside Retool’s supporters circle, other venture capitalists note that raising small rounds and banking on fast-following with more could prove risky if the current abundant capital cycle shifts. Some entrepreneurs, like Slack’s Stewart Butterfield, have historically argued it’s best to raise as much as one can when the money is cheap.
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