The architects behind Lady Gaga's social media campaign have raised around $4.5 million to scale The Backplane and accelerate its goal to become the world's home page.
The infusion was not entirely needed to bolster the balance sheet, Chief Executive Matthew Michelsen says.
"We're generating revenue," he said, adding he's kept costs low and has spent less than $1 million so far to develop the community platform that will ultimately combine calendar, email and social networking functions, including Facebook and Twitter, along with photo sharing and multilingual chat functions.
The impetus for raising cash–the round was interestingly a convertible note, but more on that later–was to solve what has become the Valley's biggest pain point for growing start-ups: hiring.
"We're looking to hire some very senior people right now. If we wanted to recruit the head of YouTube, for example we couldn't go to them and say, 'We've got nine months of capital in the bank.' They wouldn't leave their job and join us for that," said Michelsen.
So, in part to comfort top talent that the Palo Alto, Calif., start-up has staying power, Michelsen targeted a list of investors to both add cash and help the social network scale operations, hone the product and hire engineers.
For the complete story, visit WSJ's Venture Capital Dispatch.