We strongly believe in the value of being open and transparent. In that spirit, we decided to start publishing our email update to investors.

So here it is verbatim.

TLDR; We have 5 months runway. We need to figure out how to finance ourselves after that. We have a current burn rate of ~$35k/month and we could keep it that way for the rest of the year if needed it to be.

What should we do?

  1. Keep the current pace, no rush, raise another $300k-$500k in SAFE notes (last round was $300k at $8M cap last summer)
  2. Raise more without institutional investors like $1M-$2M on Angel List
  3. Raise money through equity crowdfunding. Get more people excited and involved in the project. Power of the network!
  4. Go all out and try to raise VC money.
  5. Why not use Open Collective to raise funds? Eat your own dogfood.
  6. Apply for grants, plenty of foundations would love to support you.

Please respond to this email with 1, 2, 3, 4, 5 or 6. Even better if you have the time to articulate your position in an email or on a call.

Latest about the business:

We now have a strong presence in the open source community. Don’t take our word for it; ask your developers if they’ve ever heard of Open Collective.

Stats:

  • Monthly donations: ~$20k, half of which is monthly recurring.
  • Churn: 65% of monthly recurring donations remain active after 3 months.
  • 100 active collectives per month.
  • 25 new collectives per month (about 60% are still active after 3 months)

Let’s talk about (our) money.

We raised $800k so far mostly from angel investors that we knew in San Francisco, NYC, Brussels and Buenos Aires ($500k SAFE note at $5M cap in Oct, 2015 and $300k SAFE note at $8M cap in Summer 2016).

We now have $210k in the bank.

Our burn rate is ~$35k/month. That means that we have about ~5 months of runway.

In Buddhism, there is a notion that you are what you eat and breath. The environment in which you operate shapes you. That’s why we want to be mindful about how we are funding Open Collective, Inc.

Our goal is to be self sustainable. We get 5%* of all donations on our platform (like most other crowdfunding platforms). Our collectives raised $120k in donations through the platform last year (and received another $150k through different hosts such as Women Who Code 501(c)(3)). We made ~$6k last year. We need to fund ourselves for at least another year beyond our current runway.

While we are confident we can get there, we’ll need to raise a bit more money.

* note: our FAQ says 10% but we share that commission with the fiscal sponsor. Only 5% is revenue to Open Collective, Inc.

Next steps

  • Figure out funding
  • Release Events: an easy way for collectives to sell tickets online
  • Help collectives find more ways to fund their collective by providing services to the external world (office hours, consulting, swags, etc.)
  • Organize the SustainOSS conference with Github and other partners in San Francisco to discuss the topic of Sustaining Open Source Communities, May 24th.

Blog posts

Don’t hesitate to reach out if you have any questions.

– Xavier and the Open Collective team