Where can startups find funding?
Our first investor
With our MVP in hand and some slow but steady traction on the user side, Dom and Max went in search for investment. With no prior experience in raising, the two were somewhat lost. A contact of Dom’s based in London announced on LinkedIn that he was actively looking to invest in startups. Dom and Max saw an opportunity and without hesitation booked trains from Edinburgh to London to see if they could come back with some capital. Up until now the two had been surviving on the bare minimum but in order to grow they knew investment was key.
The pitches went relatively well bar some nerves and a few slip ups (they were new to this after all). The two rattled through meetings one after another, learning and improving as they went on. A week had passed and the two headed back to Edinburgh. After an apprehensive wait and extensive due diligence processes, the feedback from one particular investor was probably the most exciting news we’d had to date. Our first Angel asked for an agreement to be drawn up for a £100k investment. At this early a stage £100k is a huge amount to invest but was testament to what the two had built with such limited resources prior.
Note to the startups out there - use your networks! At best you’ll land a deal, at worst you’ll be given feedback and critical information on how to improve. This whole process takes time to learn and it only gets more difficult as you progress through the rounds.
How to find investment
In Episode 1 of A Little Bit of This, A Little Bit of That, Dom spoke with Ivan Tan - Founder of Humant Lift; a marketplace library for creatives and publishers to discover and license influencer stock content. Ivan admits finding capital is difficult but money is out there - “you have to get creative in how you find it”. Ivan followed in many other’s footsteps in creating a deck and uploading it to a wide range of early-stage VCs and accelerator’s infamous “upload your pitch deck here” portals. However he tell us that in reality, 90% won’t reply. In our own experience we have heard stories to back up Ivan’s claim, understanding that some VCs receive in excess of 2000 pitch decks a day! So how did Ivan counteract this catch 22? He starts off by telling us he approaches other founders and ask them about their experiences. Ivan makes a good point - the startup community is largely very friendly and at least in our own experience we have benefitted from advice from other founders and likewise, many have benefited from our advice. In fact Ivan reached out to Dom asking what it takes to join APX - one of Europe’s leading early-stage VCs backed by Porsche and Axel Springer. ThisThat had joined APX several years prior. Ivan and Humant Life have since accepted APX’s terms and look like they’ll have a very promising 2022 as a result. Ivan speaks about a Karma Circle - founders helping founders and that you shouldn’t worry about expecting anything in return as more than likely you’ll have something positive come back to you in a roundabout way.
Ivan does then get more crafty in his methods - he speaks about finding other startups in a similar space to you and researching them on platforms like Crunchbase. Crunchbase is largely a space where startups go to show off their impressive list of investment rounds and participating investors. What better place to find a strategically aligned investor for yourself! From there, its child’s play - simply add the investors on LinkedIn and get talking.
Our experience with APX
At ThisThat we followed the Accelerator route and couldn’t recommend joining one highly enough. APX, formerly an accelerator program, now VC that still offers the world class support we experienced. Our offer was a 3 month intensive, tailor-made program for the team at ThisThat, €50,000 in investment and 6 months of office space. To this day we are supported by APX and have benefited from having them on our side. The training, mentorship and access to their incredible database of contacts really helped in professionalising ThisThat and fostering growth of the company. "This kind of support was worth multitudes more than the initial investment" says Dom Ivison - ThisThat Co-Founder.
De-risking your investment round is of great importance. Spend time preparing for your round and carry out tasks set out in the due diligence processes by your investor to a high degree. Doing so will provide confidence in the procedure and reassure your investors that you are capable of executing your vision.
Once you’ve got your terms sheet it’s best you seek legal advice and while budgets may be small, this is a good time to establish a relationship with a law firm and an accountant as you’ll no doubt need their services imminently and well into the future.