Entrepreneurs can expect to face plenty of rejection as they seek financing from venture capital firms. For Rajeev Goel, co-founder and chief executive of sell-side platform PubMatic, those hurdles were a sign that his company was a pioneer in advertising technology.

“I felt there was a big opportunity to create a multibillion-dollar technology company focused on the needs of premium publishers, and that’s exactly what we’ve done,” he said in this interview with Beet.TV.

PubMatic in December went public with a valuation of more than $1.4 billion, and its stock price has steadily appreciated since then.

The IPO marked was a significant milestone for a company that Goel and his business partners started in 2006. In those early days of pitching to investors, about 20 of them declined to participate in the fundraising. Instead of being discouraged, Goel found inspiration in rejection.

“I knew I was onto something that was unique, and there would not be dozens of copycat companies following behind me because investors didn’t understand the concept or opportunity,” he said.

Lessons for Entrepreneurs

Goel has learned a variety of lessons as a technology entrepreneur, including the importance of being financially disciplined. He advises against raising too much money, such as hundreds of millions of dollars before the business has gotten off the ground.

“In many cases, it’s before the company has figured out its core unit economics and things like that,” he said. “That’s a real danger because if you don’t grow into that valuation that’s implied by that level of fundraise, or if there’s an economic cycle between now and your next fundraise, that can be a real handicap.”

Before raising $118 million in its IPO, PubMatic has raised a total of $60 million from private investors, and its last round was in 2012.

He also advises that startups focus on working with individuals at VC firms, rather than seeking investments from those potential partners based on their reputations.

“In reality, you’re going to be working with an individual, a partner who’s going to be on your board,” Goel said. “Their job is to represent the quality of the investment to the rest of the partners in case there’s follow-on investments or time that has to be spent to move things forward.”

Recipe for Success

Goel attributes PubMatic’s success to its focus on its team and company culture. He said company management is transparent about its operations.

“We share a lot of information with our employees, whether it’s good news or not-so-good news,” he said. “We bring everyone into the decision-making process to the extent possible.”

As a provider of technology that processes trillions of bids on billions of ad impressions a day for publishers, infrastructure also has been a key focus for PubMatic. He said the company works to continually innovate in a highly competitive marketplace.

IPO Rationale

Goel’s goal for PubMatic was to be profitable as soon as possible to better “control its destiny,” he said. In considering the possibility of being acquired or going public, he said it was important that potential acquirers understand PubMatic as a technology company.

“One of the challenges in the category is that strategic acquirers have a hard time understanding the companies in this category,” he said. “Being public gives us a level of transparency that creates confidence with those partners to build for the future and to build their business on top of our platform.”

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