Good news for the US Start-Up StudyBlue. They just raised $9 million accordting to this article. Now StudyBlue has $14.8 million in total funding. These are incredible investments compared to Europe.

After winning the start2grow Award in 2009 we also tried to collect venture capital. But in Europe it’s not that easy as in the United States. Especially if you build up a company in the field of e-learning. We had a proof of concept, a business modell that already generated revenues, the confirmation of the jury. However, in Germany is known for high-tech machines. So you compete with these start-ups while pitching your idea.

Very quickly we understood that trying to raise venture captial is time consuming and worthless. One person was honest enough to tell us that e-learning projects were not sexy enough to fund. From that day on we never applied for anything. Bootstrapping was our strategy and I have to admit, it was the right decision for us.

Adventages & Disadvantages of VC money

No doubt, there are a lot of advantages in raising VC money. Finally you can attack all the ideas you had in mind, recruit people to do that and increase the value of your start-up. Most probably StudyBlue will reach the amount of users Quizlet can proudly present now. Market share will change on the US market where we are not doing any marketing anymore. Our core countries are Germany, Austria and Switzerland.

Raising money has also disadvantages. You are not free in your decisions anymore. Noone gives you money without restrichtions. Most VC’s place managers in your management department. Some people report that their daily business is now writing reports for funders. This ist not really fun and the entrepreneurship I desire.

Furthermore, VC’s usually don’t give you all the money after communicating it. First you get – let’s say 100k. If you can reach goals with this money fine. If not you have to give answers to a lot of questions (why were goals not reached etc.).

Difference between USA and Germany

As far as I understood for the article above StudyBlue does not earn any money at the moment. They assume that students are willing to share content. Maybe this is the case in the US, but our experience the opposite. People don’t share content. Perhaps due to different copyright regulations in Europe.

StudyBlue aims to implement the freemium model like we did in 2010. If it should be based on the content people share and others buy…hmm I have my doubts. But ok, funding companies know more details than I do.

In Europe noone would fund a start-up not having a proof of revenues. As I’ve written before. We already were earning money and nevertheless it was not attractive enough to fund us. Especially in Germany a seed finance round can bring you 500k.

Conclusion

I’m pretty sure the guys from StudyBlue will do the best out of the money and change some major things in e-learning. Of course, I would like to see a similar funding for CoboCards, cause CoboCards is the best flashcard app in Europe 🙂

Tags: CoboCards, funding, quizlet, studyblue, venture capital