Fake: We were extraordinarily fortunate in that the road was pretty smooth.
The tide completely turned for us with Flickr. We’d been trying to get the game
off the ground. Raising money for the game from outside investors had been
really grueling. Raising money is very hard, especially in that market. We were
building something that was not really known to people. If it wasn’t a shrinkwrapped
game sold at Best Buy, they didn’t know what it was.
Livingston: Were you talking with VCs or angel investors?
Fake: At that time we were talking to venture capitalists and they didn’t get it.
But with Flickr, it completely turned around because the momentum behind it
was so strong that at one point, we were getting calls from three to four VCs a
week. They were getting in touch with us—completely different from when we
were going door to door and beating the bushes trying to raise money.
Livingston: Did you wind up taking any investments?
Fake: We did a small angel round, but we didn’t take any venture capital. And
we lucked out and got an interest-free loan from the Canadian government.
We’d applied for it, and gotten rejected, and then just sent the same application
in again when it was open again, and much to our surprise, we got it. And here’s
the other thing that was interesting about Flickr: almost immediately after we
launched—even when we were just the IM client—we were being approached
by potential acquirers. So it was clear that we were onto something. People
really weren’t sure what yet, but there was definitely a lot of excitement and
interest.
Livingston: Why did you decide not to take venture capital?
Fake: A couple reasons. We didn’t think that we were ready, and we were kind
of in a holding pattern. We weren’t sure we wanted to take venture capital at all.
We were being approached by all the acquirers and VCs and still many angels
who were willing to invest. We had enough money to carry us through six
months into the future and we already had some great angel investors, including
Esther Dyson and Reid Hoffman. So we didn’t feel we had to go for it. That
was the ironic thing, because when you need money, nobody will return your
calls. When you don’t need money and you say, “Sorry, guys, don’t need any
money,” they can’t stop calling you. They just can’t help themselves.
At that point, we were almost at break-even in terms of our operating
expenses. If we were to take venture capital, it would have been making a big
bet, expanding rapidly, rather than growing organically. And we were already