Disrupt alum Trello has pulled in a $10.3 million funding round. The startup launched its visual project management system back in September 2011, on TC’s startup battlefield stage.
Three years on and its freshly announced Series A funding round is being co-led by Index Ventures and Spark Capital. As part of the investment, Spark’s Bijan Sabet will be joining the Trello board.
The visual organizing software has amassed some 4.6 million registered users — now with one million monthly actives — turning their projects, whether household to-do lists or corporate realignment plans, into visual boards using its cloud-based software.
Trello has a freemium model, monetizing its free at the point of use model with addition paid-for business-focused features. The boards are made up of a series of individual cards, that can include text and images, with users able to organize cards into lists, colour code them with labels, add due dates, track project progress and so on.
In a blog announcing today’s raise, co-founder Joel Spolsky explained the rational behind Trello’s makers, the Fog Creek Software team, taking big VC cash for Trello, given the company and product were already profitable.
He also details how they went about it: namely by spinning out Trello as a separate company, so that the investment could be focused on that product alone, and that company culture could be best preserved.
“Now, we didn’t need the money, but we certainly like money,” he writes. “We had a bunch of ideas for ways we could make Trello grow faster and do all kinds of astonishing new features and hire sales and marketing teams to work on Trello Business Class. We would have gotten around to all that eventually, but not as quickly as we could with a bit of folding money.”
“We spun out Trello into its own company, Trello Inc., and allowed outside investors to buy a minority stake in that. So now, Trello and Fog Creek are officially separate companies. Trello has a bunch of money in the bank to operate independently. Fog Creek will continue to build FogBugz and Kiln and continue to develop new products every once in a while. Michael Pryor, who co-founded Fog Creek with me in 2000, will be CEO of Trello,” he adds.
Talking more generally about the challenge of retaining the spirit, culture and control of a startup after taking in big VC cash, Spolsky notes that Trello deliberately opted to avoid taking outside investment until it had enough traction and revenue to enable it to have the pick of investors — and choose those it thought were “the most entrepreneur-friendly”.
“In the case of Trello, we had so much interest from investors that we were even able to limit ourselves to investors who were already investors in Stack Exchange [another Spolsky product] and still get the price and terms we wanted. The advantage of this is that we know them, they know us, and they’re aligned enough not to fret about any conflicts of interest which might arise between Stack Exchange and Trello because they have big stakes in both,” he writes.
“Even though Fog Creek, Trello, and Stack Exchange are now three separate companies, they are all running basically the same operating system, based on the original microprocessor architecture known as “making a company where the best developers want to work,” or, in simpler terms, treating people well,” adds Spolsky.
The Spolsky startup philosophy of treating staff well extends to having La Marzocco Linea espresso machines in every office, height adjustable desks, remote working and family-friendly polices — including $500 food delivery vouchers for new parents.
“It’s OK to put people first. You don’t have to be a psychopath or work people to death or create heaps of messy code or work in noisy open offices,” he adds.
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