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Comment by rokhayakebe | Hacker News Reader

Do you mind sharing how raising money helped you guys? You were only 8 people and raised $4M.

Edit: Had you reach 7 figure revenue yet?

Easy: without venture funding, I would have just been a guy sitting on the couch at home with nobody to work on this with. And the hosting costs alone to run a site that large are around $25K/month.

Yes, we had reached 7 figure revenues many years ago, long before the acquisition.

25K a month? Really? That's like 50 medium Amazon instances.. all for at most a couple million uniques a month? What were you doing that required so much servers?

Hosting options and costs were radically different a few years ago.

If you're all presuming that EC2 is some magical pixie dust for reducing the costs of running a large site, that's not the case. We had ~10 EC2 boxes and 15 managed servers at Contegix, CDN, Dynect, email service provider and a few more services thrown in.

It's not any less expensive today because those numbers I gave are current numbers.

How did you know it was time to raise? Was it because you could not afford the hosting bill anymore, or that you were getting lots of traffic and not enough time to build out the product, or...?

I finally had a better understanding of the context of the opportunity and started to think big. And I found people I liked who understood the vision and were willing to back the idea.

The hosting bill back then was ~$100/month since it all ran on a single box so, no, that wasn't a factor. It was a question of opportunity and not costs.

Great. I am in the space, so I may email you some day for more insights. Thanks again for the answers.

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