![]() ![]() Visit Business Insider's homepage for more stories.Īs the coronavirus pandemic has forced the world to work from home, Silicon Valley startup Notion swung into action.Two days and a handful of Zoom meetings later, he had term sheet in hand that was everything he hoped for and nothing he didn't.He called up a VC that had been hoping to buy a stake, Index Ventures Sarah Cannon, and had won his good graces by helping him with things like recruiting.But he and is cofounder decided that a healthy headline-making investment would help him reassure his growing customer base that Notion was stable and would remain so for years, no matter the economy.Notion is profitable, he says, and the remote work mandates have improved his business. Notion CEO tells Business Insider that he didn't need the money.Hot Silicon Valley startup Notion shocked the tech world yesterday when it announced it had raised $50 million at a $2 billion valuation on Wednesday, in the middle of the pandemic that is causing mass layoffs at other companies.The easiest explanation: more money will usually go a longer way with hiring.Account icon An icon in the shape of a person's head and shoulders. Notion has simply tried to be capital efficient and mindful of dilution, and its numbers can justify SoftBank-sized checks without SoftBank-style dilution now. “You can invest more aggressively in product and engineering, in certain kinds of marketing opportunities, than you could otherwise,” says Vernal. “Sometimes as you move up market with enterprise customers, people pay attention to things like how big the company is, how much you’ve raised in funding.” Another factor: proving you’re not going anywhere. The who: In the courtship to lead Notion’s round, as one of Silicon Valley’s buzzier businesses, Coatue got a leg up through a land and expand approach worthy of the software startups it backs. The firm put a small check in Notion’s 2020 raise led by Index Ventures, then went to work. ![]() Since David Schneider joined the firm from ServiceNow, where he was once president, Schneider has met with Kothari twice a month, Kothari says, for coaching. Notion chief resource officer Olivia Nottebohm, a Google and Dropbox veteran, met Kothari and Zhao through Coatue, initially to advise as a go-to market expert. Sequoia, meanwhile, knew Notion through its portfolio company Inkling, where Zhao once worked, and whose former CEO Matt MacInnis had written Notion a small Scout check on Sequoia’s behalf early on. Through MacInnis, Notion met Vernal, an executive at Facebook and angel investor who later joined Sequoia in 2016. Vernal’s close colleague at Facebook: Marooney, the social giant’s former longtime head of communications. The two are neighbors Coatue’s also an investor in startup Rippling, where MacInnis now serves as COO. ![]() “This was probably the fastest round to come together in my time at Sequoia, definitely top two or three,” Vernal says. The other notable new investor in the round: Base10 Partners, the firm founded by Adeyemi Ajao. Notion’s general counsel, Hasani Caraway, introduced the startup to Base10. The firm’s values - it’s pledged to donate half of the carried interest from its most recent fund to support scholarships at historically black colleges - helped make Notion want to partner with it, according to Kothari. The lesson: Notion’s executives repeatedly brought up the company’s community as a differentiator its investors turned to the same in justifying such a large investment and valuation. Only more recently has the company appeared an overnight success, meaning it’s reached $300 million-plus investment with less dilution than typical.įor other entrepreneurs, Vernal notes that Notion spent three to four years at seed-stage focused on its product. “If an entrepreneur can build an organic, product-led growth product like this, then they definitely should. It’s hard,” Vernal says.Īnd at Notion, Kothari says his message for employees after reaching a $10 billion valuation has been to quote his former boss at LinkedIn and mentor, Jeff Weiner. ![]()
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