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Sam Jacobs, Founder & CEO, Pavilion | PUBLISHED ON Nov 4, 2021

On the Rise Volume 2: Fundraising

Brought to you by Pavilion

Welcome back to On the Rise, a place where we believe the business world can operate on kindness and reciprocity. This month, I want to explore the fundraising scene.


Last month we talked about the war for talent, which is leading to a boom in wages. Another thing skyrocketing this year — fundraising.

Global venture funding hit all-time highs in every quarter this year, we’re on pace to hit 1,000 Unicorns by early 2022, and everyone seems to be going public. 

You might think it’s just the big dogs getting more and more money. But seed stage funding has increased significantly, too. We even closed our first ever financing this year at Pavilion

Perhaps most surprising, is the size of the rounds and implied valuations compared to the companies actual traction when it comes to scale and revenue.

A quick anecdote:

I was presented with an opportunity from a “friendly-ish” CEO to invest in his Series B. I said yes because I’d heard good things about the company, but then life intervened. As the closing date approached, I finally got around to asking some basic questions:

  • What’s the current revenue run rate?
  • What’s the pre-money valuation that I’ll be buying into?
  • Am I buying common shares or preferred shares?
  • Am I buying secondary or primary?

For those that aren’t as tied to this world, common shares sit at the bottom of the capitalization table and have far fewer rights than preferred shares. And buying “secondary” means I’m not investing directly into the company or buying the shares from the company, but instead buying the shares from another shareholder.

 So what kind of deal I was getting?

  • The company was doing about $3M in recurring revenue
  • The company was raising money at a $200M pre-money valuation 
  • I was buying common shares 
  • From the Founder

So yes, wild times. This company (which just announced this financing) was getting a 66x multiple in revenue and the founders were already taking money off the table.

So how does this all end?

Well it’s hard to say. Interest rates and the overall availability of capital play a very direct role in valuation. There aren’t strict laws saying a great SaaS company should trade at 20x revenue (vs 66x) or at what point a company should be profitable.  

Perhaps if interest rates stay arbitrarily low and MMT (Modern Monetary Theory) holds true, this is just the way the world is right now.  

But my sense is that with so much distance between traction and valuation, many companies are setting themselves up for trouble in the future. Maybe in this world you can dance your way around a $200M valuation on such early revenue, but at some point there likely needs to be a tighter correlation between revenue, growth, and value.

The pressures of growing into a ~$250M valuation might create a cascade of bad decisions that end up cratering the culture of the organization and imperiling their ability to reach a $200M valuation the old fashioned way — with $20M of recurring revenue.  

Bottom line: Watch this space.  And get that secondary if you can.


The rise of climate tech

Climate tech is one of the industries benefitting from this boom in capital. $49 billion of venture capital funding is expected to be funneled into climate tech in 2021.

When I took Terra’s Climate School earlier this year, they gave us access to the En-Roads climate policy simulator. The policy simulator is an amazing machine that lets you play with various inputs and outputs and see how they impact the overall warming of the planet.  


Here’s what you’ll find if you play with it:

There are two things that can reverse the warming trend we’re seeing on the planet — a price on carbon and technologies to actively remove carbon (and methane) from the atmosphere. 

You know what has no impact at all? Vehicle electrification. And a bunch of other things you read about that really aren’t going to make a difference.  

In fact, climate is a fascinating topic precisely because so many conservationists continue to preach that “doing less” can possibly save the planet for humankind. I’ve always thought that doing less was both impractical and ineffective. Paraphrasing Marc Maron, bringing our own bags to the supermarket ain’t gonna cut it. 

It is by doing more, namely investing in large scale carbon sequestration and removal, that we might possibly have a chance.  

To that end, we’ve been working with Ecologi to help offset the carbon footprint of Pavilion HQ staff with a goal of planting 10 million trees in the coming years, nature’s original form of carbon sequestration.  

It’s the right time for climate tech and the funding proves it, as long as we are willing to dream and think big.


More from Pavilion


What’s trending in fundraising

Finance Pavilion leader Peter Nesbitt breaks down funding options for your business — from debt to venture capital. Read on.


Moving from Series A to B

Back when we were Revenue Collective and Operations Collective, we held a webinar on positioning yourself for the next stage of growth. Watch the replay.


Thanks for joining me on this journey of exploring new ways to do business.

Until next time,



Subscribe to next month’s On The Rise newsletter here.


Resource Box Header On the Rise Volume 1: Thoughts on the war for talent in 2021
On the Rise Volume 1: Thoughts on the war for talent in 2021

Welcome to the first edition of On the Rise. If you’re here, I hope you too envision a better world where business runs on kindness and nice folks finish first. Let’s get…