Without an insider's perspective, my guess is that Facebook did a Series A because it made the most sense for the business at the time. In 2005 a Series A was very different than one now, and you could make the argument that today it would be called another seed round.

That said, Facebook at the time was seeing engagement metrics that blew away expectations. Zuck also had a concrete growth strategy and early backing from serious Valley insiders, so the proverbial rocket ship was launching.

Raising money is equally about cash and value-add, and back then Valley institutional money was both a validation point and significant competitive advantage. People forget that Facebook was entering a hugely competitive market, and winning meant securing healthy resources to grow as fast as possible and to attract the best talent.

Don't consider your A vs Angel decision in the context of Facebook. Consider your fundraising in the context of where your business is and what resources it'll take to win market position.

Institutional investment is best evaluated in light of the value they can bring to scaling a company that's scalable. Their connections, insight, and operating expertise can take an exciting company from startup to "game changer", if that company is truly a game changer. In many cases that company may not be a game changer, but if it's a real business (which many startups aren't, in the VC definition of the word - $100 million+) than the VC industry is where you'll find experts. Up until your business is surely that kind of business, it might make sense to otherwise finance.

Answered 9 years ago

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