How to easily raise $11.5 million in a bad startup funding environment, according to the CEO of Bustle who just did it

Bustle

The digital-media boom may not be over just yet.

Bustle, a media startup focused on creating content for millennial women, has raised $11.5 million in what its CEO Bryan Goldberg, who previously cofounded Bleacher Report, says was "the most oversubscribed round of my career."

Not many startups are able to say that these days, particularly as the doom and gloom of a potential market turn sets in. Over the past few years, it has been relatively easy for startups to raise big piles of cash on the promise that someday they'll figure out business models. In the past year, roughly 100 startups raised rounds of financing at valuations that exceeded $1 billion (the "unicorn" club). But some of those once promising companies have already begun to go bust, and investors have become much more cautious with their capital.

"The tone [in Silicon Valley] is different this year, it really is," Goldberg said on a call with Business Insider. "One year ago it was, 'Get everyone together with a big surprise party and a taco truck' to announce a round. That's not the mood right now. Instead the message is, 'Keep chugging along.'"

Goldberg says the secret to attracting venture capitalists in a more conservative market is simple: show them the revenue.

Bustle

Bustle, he says, still has money left over from a $15.5 million round the startup raised at the end of 2014. That is thanks in part to Bustle's advertising revenue beginning to kick in. The startup says it met its 2015 revenue goal of $10 million and expects to "greatly outpace" the $20 million goal it set for itself in 2016.

Since its launch in 2013, Bustle has grown to 45 million global unique visitors (32 million in the US, according to comScore). In November it launched a sister site, Romper, that now has 3.5 million uniques, according to Bustle's internal analytics. The top traffic referrers for Bustle are split evenly between Google and Facebook, with Pinterest being the third-largest referrer.

BustleWhile $11.5 million is a lot of money, it's not nearly as much as some other media companies have raised recently.

Last August, Vox and BuzzFeed raised $200 million each. A lot of that money is expected to help the sites become digital video powerhouses that can steal big ad dollars away from traditional television networks.

Goldberg, however, wanted to proceed with caution in terms of both its funding and its video efforts.

"At the end of the day, a fund raise should be driven by capital needs," he said. "And our revenue is growing at a high rate right now ... it is through the roof."

As for digital video efforts, Goldberg says Bustle is putting out a few clips a week but doesn't want the team to grow too quickly. First he wants to see how Facebook's and YouTube's video platforms evolve.

"There are some digital-media companies that are betting tens of millions of dollars on video ... I wish them the best of luck with that bet," he said. "We're going a little slower because we want to see how landscape develops."

Still, to Goldberg, the best days for digital media are ahead.

"A lot of media people going to be winning in 2016," he says. "Fund-raising won't stop for the best ones."

The round was led by Saban Capital. GGV Capital, General Catalyst Partners, Time Warner Investments, and Social Capital also participated.

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