Why Squarespace's Founder Finally Raised $39 Million After Holding Out for 6 Years
The founder of this website-building platform is making serious cash, but he doesn't want to spend a penny he doesn't have to.
In 2016, Anthony Casalena's company generated more than $200 million in revenue, but the founder of website-building platform Squarespace doesn't want to spend a penny he doesn't have to.
How did you know your idea could be a viable business?
I started programming Squarespace in 2003. Originally, I wasn't intending to start a company. I was creating it because I wanted to make a website for myself, and I was really frustrated that it required so many kinds of software. I didn't understand why all those things weren't in one place. I quickly realized that the thing I was making for myself was something other people could use.
You asked your dad for $30,000 to buy servers for the business. How did that conversation go?
My dad recalls some version of his saying to me, "We've always supported you. We're always ready to back your ideas." I remember it more like a huge fight. He didn't understand why I needed two servers instead of one. I have to credit my mom a little bit for helping me talk him into it.
You bootstrapped the company for the first six years. How can you tell when it's time to take on investor cash?
For Squarespace, it was a number of things. One, it was balance-sheet enhancing. We needed that money as a buffer, and to get loans against. Two, I don't come from a wealthy background, and I was able to sell some shares and separate my personal well-being from the well-being of the business. The other driver was I wanted to bring on better executives. To provide some corporate structure and get a stamp from great investors would really show people that this was an exciting place to work.
How do you decide what to spend money on and where to reinvest?
I attempt to operate to cash-flow breakeven. My mindset is to make spending decisions from a position of pain. I don't say, "I think we are going to be able to hire 200 people this year. There is no evidence for that, but let's just get this really big office and hope that it will be filled up." We are a lot more analytical than that. I try to be realistic about growth projections and react to those in real time. Over the years, we've just kept asking, "What can we do with this money to grow the business?" That's how it's always operated.