By Jeffrey Chambers, Ryan Kissick
2017 | Case No. E560 | Length 18 pgs.

The Thumbtack case explores the major challenges associated with raising money at a technology start-up in Silicon Valley.  In 2008, Marco Zappacosta, Jonathan Swanson, and Sander Daniels founded Thumbtack, an online marketplace that connects customers with local service professionals such as gardeners, plumbers, tutors, and caterers.  Over the course of the next seven years, Thumbtack raised more than $250 million in their journey to become the market leader in the $700 billion U.S. local services market.

Through an in-depth examination of Thumbtack’s major financings, the case highlights several learning objectives related to raising capital in a technology start-up: when is the “right” time to raise money; how much money should entrepreneurs ask for; what are the pros and cons of an aggressive financing strategy versus a more conservative strategy; how should an entrepreneur evaluate various investors; and how can entrepreneurs maintain control after giving away ownership of their company to investors?

Learning Objective

The learning objective of the case is to help students understand the various criteria associated with raising venture capital funding in a rapidly growing start-up, including the best time to raise money, the amount of capital to raise, and evaluating various investors and term sheets.
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