This is the third post of a series about Talend’s recent Round C Fundraising.
Previous Post: Fundraising in September – Face Time

As the financial crisis accelerated, we continued our Roadshow all over the world. Our news was good. We closed a very interesting Q3 in terms of results and in terms of growth. And our news flow was excellent in terms of the press, analysts’ white papers, and quarterly results; all this validated our pitch to the VCs.

In October, all the VCs were evaluating the impact of the economic situation on their existing portfolios. Sequoia Capital and Kleiner Perkins, the two biggest names in venture capital, were both on track to fund less than half the number of companies that they did in Q3.

At this point, every single one of the VCs we were talking to had a new question: how does your value proposition address the new reality of a tanking market. For the first time we had to prove that our market space and strategic position had a delineable future. In September, nice-to-have was sufficient. Just one month later you couldn’t raise money with nice-to-have. The perception of value had moved to another level.

We were able to address this very quickly by actually leveraging the market downturn. We never changed our pitch, but we positioned it against the gathering storm. Frankly, if we weren’t open source we wouldn’t have raised a dime.

The downward spiral continued. October 6th launched the worst week for the American stock market in 75 years. The Dow Jones lost 22.1%, its worst week on record. Standard & Poor’s 500 Index – down 42.5% from its own high in October 2007 – also had its worst week since 1933. The economy continued to shrink and the word “Recession” became more prevalent.

Bertrand

Next post: Fundraising in November – Inking the Deal