It’s been almost two years now since my full-time job at a company I founded. Since then I’ve gotten to work with some fantastic individuals that have changed some of my core beliefs about startups. Namely Nate Watson at Contemporary Analysis, Cory Scott at LiveBy, and the three founders of Buildertrend: Jeff Dugger, Steve Dugger, and Dan Houghton.
Preston Badeer, data scientist, product manager and startup founder
Learning from these people and many others has drastically changed my views on what’s important in an early-stage business. In hindsight, I think my mistakes as a founder were caused in part by core beliefs that were fundamentally wrong.
False Belief 1: ‘VC is evil’
One of the biggest mistakes I made when starting companies was delaying raising capital for as long as possible. Mind you, I wasn’t pushing it off because I didn’t need it, but because I despised the idea of it.
Asking others to fund your company always seemed backward to me. If it’s a viable business model then it should fund itself, or at least be on its way toward doing so. And if that’s the case, why raise money at all? Why spend time formulating a pitch deck when you could be formulating your actual product?
I also found it easy to question the authority of VCs on any given topic, since most are successful founders and most successful founders would admit to luck being heavily involved.
This then draws into question the “success metrics” by which a VC can claim their authority or point to past success. There seems to be very little agreement on which metrics should be used, and many of the ones in use were clearly chosen because that particular VC had good results on that particular metric.
However, despite all this, I now believe investment (VC or otherwise) is crucial to the success of any startup. It’s purely about timing and the investment style. My problem was that I was focused squarely on VC, didn’t evaluate other styles, and had the timing totally wrong.
False Belief 2: ‘Focus on the product’
I was a developer for a long time, and some habits are tough to break. One of those is an incessant focus on product quality and development “progress.”
Unfortunately, neither of these things make money, and if you mean to build a business, you must at some level follow the money.
Product quality is only as useful as the sales it creates. If the quality is causing your ideal customers to say “No,” then work on the specific area of quality they complained about. Make those potential customers give you feedback during the development of the fix, and continually ask them what their barriers to buying are.
If you mean to build a business, you must at some level follow the money.
Development “progress” is things like features launched, integrations created, lines of code written, pages of your app created, etc. and it’s easy to get attached to building these out. Development can be very abstract, so performance-driven individuals (or developers who report to them) will grasp for some way to measure progress or success.
This is a lose-lose situation for everyone because you’ll focus on the wrong things and also gain false confidence in your product. Using potential sales to inform what you develop and measuring success based on sales impact will force you to focus on what your potential customers are focused on.
False Belief 3: ‘Quit your job’
In the introduction to the book Originals, Adam Grant makes a point about common misconceptions. His prime example is when he didn’t invest in the earliest stages of Airbnb because the co-founders held full-time jobs.
It’s well-known that investors don’t like to put their money into part-time endeavors. If you want VC money, you’ll almost certainly have to quit your job and go full-time. Or — and most VCs prefer this — you already have by the time you’re asking.
As Adam Grant points out, however, having a full-time job outside of your startup actually increases the odds of your company surviving by 33%.
This alone should tell you not to quit your job, but I want to take it a step further. I believe that if you can’t pay yourself at your startup, and you don’t have a seperate full-time job, you should spend time getting one.
Ideally, you should get a job at another startup with founders you look up to. You’ll learn from their mistakes, your own mistakes, and learn a lot from general experience, all of which benefit your company.
In addition, by getting a stable job you’re actually decreasing the burn rate of your startup and increasing its runway. Which is why I believe (again, if you can’t pay yourself at your startup and you don’t have a full-time job) getting a job is actuallywhat’s best for your company, not just you.
Avoiding investment before sales might sound like the slow lane, but if you put sales first then you’re on the fast track to either paying yourself or being appealing to investors (whose money you can use to pay yourself). This, in turn, will allow you to quit that job and focus all efforts on your business.
I believe early-stage founders having or getting full-time jobs is not a bad thing. In fact, it’s actually in the company’s best interest. It’s also the key to getting the right timing for investment.
Preston Badeer is a data scientist, product manager and startup founder
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
Chinese investors are not notorious for investing in African startups, although they invest in other startup ecosystems in world. However, China’s venture capital (VC) investment in the Indian startup ecosystem grew five times at $5.6 billion in 2018 compared to a $668 million in 2016.
In India alone, Chinese investors have clearly been betting big on startups with their funding surpassing their American and Japanese counterparts in 2018. In fact, Chinese funds flowing into India have seen exponential growth over the last couple of years. China’s venture capital (VC) investment in the Indian startup ecosystem grew five times at $5.6 billion in 2018, compared to a mere $668 million in 2016, according to research and analytics platform Tracxn. In 2017, the number stood at $3 billion.
Given their interest in investing in startups, most founders here would give an arm and a leg to have a cheat-sheet to the dos and don’ts while meeting Chinese investors.
During a panel discussion at the fourth edition of the TiE Global Summit in New Delhi on Friday, Damien Zhang from CDH Investments and Jeffrey Yam from Integrated Capital gave a sneak-peek into the mind of a Chinese VC. CDH Investments is a Beijing-based alternative asset management firm while Integrated Capital is a Hong Kong-based multi-strategy private investment office. Both entities have investments in Indian startups.
The Dos
“We are casual about meeting founders, so feel free to meet for drinks. And reach out for karaoke if you’re in China,” Damien says.
According to Jeffrey, as an Indian startup founder, even if you don’t fit a Chinese investor’s mandate, be “proactive”.
“Their advice could help a lot. Once you’ve developed a personal relationship, it’s easier to get an investor on board once they know your journey rather than just seeing a deck. You want investors that you actually enjoy hanging out with and vice versa,” he adds.
Never exaggerate your numbers and do not under-report your competitors, says Damien.
“Every Chinese investor does a very thorough cross-checking and if you understate your competition or there is something amiss about your numbers, they will just go past you,” he says.
Jeffrey concurs, and adds that trust is the key.
“On the numbers, you would want to be absolutely transparent. And you want potential investors to have trust in you,” he says.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
My startup Meddy, a GCC-based consumer-facing online platform that helps patients find the best doctors and book appointments with them, recently raised a total of US$2.5 million in a Series A funding round led by NYC-based Modus Capital, along with participation from 212 Capital, Kasamar Holdings, Dharmendra Ghai (Health Tech Angel), Innoway, and others. While we get set to use the funds we raised to scale up our operations in the UAE, I also wanted to share some of my insights from the fundraising experience with all you entrepreneurs out there- hope these help you in your own startup trajectories!
1. Start early (as it will take a while)
Fundraising is a very long process, as you have to build a relationship with investors before they are ready to talk terms and commit. A lot needs to happen between your first call or meeting, and ultimately wiring the funds. According to a report published by MAGNiTT, 71% of startups claimed fundraising took up to nine months. So, don’t start fundraising when you have only less than three months of runway. You will probably not close in time, and even if you do, you’re unlikely to get favorable terms, because you won’t be in any position of leverage.
2. It’s a sales process
Closing a venture deal is very similar to a long enterprise sales cycle. It’s highly unlikely that your first meeting will lead to a term sheet. You will probably start with an email, which will lead to a call, which will lead to a meeting, which will lead to reviewing the numbers and research, and so on and so forth.
There are multiple decision makers along the way, and it’s key that you be spending most of your time with the key decision maker. You will know you’re making strides when they start introducing to other people in the firm to get their buy-in. Remember that it’s not uncommon for your lead to go cold on you after staying in touch for weeks or months- you may have to find another entry point to get back on their radar.
3. Manage your funnel properly
You should treat fundraising similar to how you treat a sales pipeline- you have to manage and nurture them properly. I maintained a Google Spreadsheet with detailed information about investors, their sector focus, prior investments, last meetings, etc.
Towards the end of it, this evolved into becoming a nice customer relationship management (CRM) record of all the investors I met, as well as those who I needed to meet. At the end of the day, it’s a sales funnel, and you have to keep feeding the top of the funnel with a lot of investor meetings to increase the probability of some of them eventually converting and writing a cheque.
4. Don’t underestimate a very well-written cold outreach
The prevailing wisdom is always to get warm intros to investors, and I fully agree with that. But most people underestimate a very well-written cold outreach. My lead investor came through a cold outreach on Twitter.
5. Target the right investors
Do your research to figure who would be the right investor for you, and for the stage of your company. Most investors make it explicitly clear on their website at what stage they invest in. So, don’t spend too much time chasing investors who do late-stage growth rounds, when you’re raising your seed or Series A round. You should certainly get in touch with them to get their feedback and nurture them with quarterly updates to eventually get them to participate in your next round.
However, it’s best you prioritize your time finding a strong lead investor for your round. As the name suggests, lead investors are extremely important as they set the terms for the round for them, and for everyone else to participate. They also become your partner, and they will help you close other investors.
6. Remember that venture capital (VC) funds are not the only source of venture capital
As counter-intuitive as it may sound, there are more sources of capital than just going after the venture funds. Angels, angel groups, and accelerators are, of course, a big part of the ecosystem, but not many startups are targeting family offices, high net worth individuals, C-level executives at big companies, large corporates as strategic investors, etc. Most of them are looking to diversify their investments from asset-heavy businesses to asset-light investments- not to mention their extensive network connections in the market that you can leverage.
7. Build a document for frequently asked questions (FAQ)
Since you will be meeting a lot of investors, you will start getting the same questions over and over again. Instead of winging an answer every time on the fly (and probably putting yourself at risk of saying a different answer), you should build an FAQ document for yourself where you can put concise answers that you say to anyone who asks you the same query another time. This will make you sound more confident and prepared, and investors like it when you have already thought about the questions and concerns that they have. It just makes you seem that know what you are talking about.
8. Legal takes a long time
When we first got a term sheet, I thought I can just delegate all this legal stuff to a lawyer, and have him/her take care of this. I couldn’t have been more wrong. Legal ended up taking an insane amount of my time. Legal due diligence gets very messy if not handled properly, but that’s for a different post altogether.
9. Be prepared to not get any answers
You will be meeting a lot of investors, and as such, you’ll constantly be getting feedback. It’s imperative you learn from the feedback, and improve your business and pitch deck. Some investors would be kind enough to give you an affirmative “no,” and even give a rationale behind it. This will help you move on, and spend your time and effort going after others.
However, most investors will not reply, and they’d just ghost you. VCs are notorious for not saying no to keep you on the hook, in case you become interesting down the line. From my experience raising multiple rounds of funding so far, a “yes” usually comes a lot quicker than a “no.” However, it’s not uncommon for them to change from a “yes” to a “no” later on as well.
10. Get better at storytelling
In order to raise funding, you need to have great numbers and compelling overall traction. But numbers are not everything. You’re there to tell a story, you’re painting a picture that roughly follows this format: the current status quo is not good enough, millions of people are struggling with a problem. You have a product that is 10 times better at solving the problem, and is, in the process, making the world slightly better.
You need their money to accelerate that progress. You’re there to convince them that you and your team are the right people to pull it off. Numbers and traction definitely help with making a decision, but they are not everything. It’s also a lot about your chemistry between you and the partner at the fund. After all, people make decisions emotionally; they just rationalize the decisions to others (and themselves) with numbers. So, being good at telling a story and convincing others to join on that vision is super important.
11. Always keep in mind that fundraising is a means to an end -and not an end in itself
Fundraising itself is not a goal of your company- that should be to build a sustainable business that solves a problem. So, treat fundraising as such, and get back to working on your business. Don’t spend any more time on fundraising then you have to.
Haris Aghadi is the founder of Meddy, a GCC-based healthtech startup that helps patients find the best doctors and book appointments with them, shares his insights from the fundraising experience.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
Some venture capitalists and private equity players are likely going to re-evaluate their investment priorities after some of SoftBank’s promising bets went south, Jonathan Larsen, chairman and CEO at Ping, a Global Voyager Fund said.
The $1 billion Global Voyager Fund is part of major Chinese finance conglomerate Ping An and it invests in early-stage fintech and digital health start-ups.
Pushing companies to profitability too early isn’t the answer, but having a coherent story and a coherent path to profitability is, Larsen said.
Venture capitalists and private equity players will likely have to re-evaluate their investment priorities after some of SoftBank‘s promising bets went south, an investor said Thursday. The Japanese conglomerate reported its first quarterly loss in 14 years on Wednesday, and some of it was owing to the dramatic fall of office space-leasing start-up WeWork in recent months. SoftBank recorded a $3.4 billion writedown on its WeWork investment two weeks after injecting fresh funds of $5 billion and taking 80% control of the company. While it’s difficult to speculate the long-term sustainability of WeWork’s business model, it is “not unusual in innovation cycles for expectations to get ahead of reality,” said Jonathan Larsen, chairman and CEO at Ping An Global Voyager Fund.
“Pushing companies to profitability too early isn’t the answer, but having a coherent story and a coherent path to profitability is the answer.”-Jonathan Larsen, chairman and CEO at Ping An Global Voyager Fund
“From our perspective, rationality and reasonableness of expectation is actually positive,” Larsen said. He added that a slight reset in how investors scope out investments would probably be helpful to those trying to put their money in real, transformative technologies. “I suspect that we’ll see some re-evaluation across the venture spectrum as well as private equity.” Of the 11 investments the Global Voyager Fund has made so far, the largest was a 41.5 million euro ($45.90 million) check for German start-up Finleap, which builds fintech companies. Asked about expectations Ping An has of its portfolio companies, Larsen said that they don’t have to show profitability in the short term. Instead, those start-ups should have a sustainable path toward long-term profitability. “It’s typically a 7 to 10-year process to be able to get a business up and running, to be profitable and then meaningfully profitable on a sustainable basis,” he said.
“Pushing companies to profitability too early isn’t the answer, but having a coherent story and a coherent path to profitability is the answer,” Larsen added. In Ping An’s case, the fund looks at both the financial case presented by prospective investments as well as the strategic case — in terms of how well the technology and business scopes align with Ping An’s own research and developments. “Our job at the Voyager Fund is to find technologies, business models, platforms and approaches, which are complementary and are additive to what we can do internally,” he said. “Alongside that, of course, we’re looking for a strong financial case so that we can deploy our capital responsibly.” Larsen explained that if the right opportunity presents itself, the Global Voyager Fund may shell out amounts north of $100 million, but the scrutiny into the company would be a lot more stringent. “It would need to be a larger company, it would need to be later stage, it would need to look more like a private equity opportunity than a traditional venture opportunity.”
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
The ratification of the African Continental Free Trade Area (AfCFTA) on 7 July is a major milestone in the integration of Africa’s markets — and a big opportunity for business. Provided critical parts of the agreement are finalized in time, countries are due to commence trading under the AfCFTA on 1 July 2020. That will create new impetus for investment, trade and industrialization across Africa.
The AfCFTA builds on years of effort by African governments to accelerate regional integration — and past progress provides an encouraging indicator of the opportunities ahead. For example, the six-member East African Community and the 15-member Southern African Development Community have both seen their intra-bloc trade grow at around 15% a year over the past decade.
First, set a clear aspiration to guide your expansion.
The most successful pan-African firms have been deliberately bold. Consider the example of Saham Finances: in little over a decade, the Morocco-based company grew from a small local firm into a leading African insurance company operating in 23 countries across the continent. Saham’s strategy included buying stakes in existing insurance firms in countries ranging from Angola to Madagascar, then overhauling their management and rapidly growing their sales. In 2018, Saham merged with Sanlam, a long-established South African insurance company that had also made Africa its major growth focus and was operating in 34 countries.
Second, prioritize the markets that matter most.
In a continent with such scale and geographic complexity, companies need to be clear in prioritizing markets. Coca-Cola provides a compelling example. Even though it is present across the continent, it picked 10 countries as priorities for growth — and within each of those countries, it focused on the big cities that accounted for the lion’s share of GDP. In the other 44 African countries and thousands of smaller towns, the company offers a simpler portfolio of products and packaging. In constructing a successful pan-African portfolio like Coca-Cola’s, companies need to look not just at the spending power of countries today, but also at the fast-growing countries that will be home to tomorrow’s consumers (see below).
Third, define how you’ll achieve scale and relevance.
Companies need a clear plan for how they will achieve scale and customer loyalty in every territory they play in. One essential component is a company’s brand: Because African consumers must navigate greater uncertainty in their daily lives than their counterparts in developed markets do, they place great value on brands they can trust. A further step is to tailor your offering to Africa’s diverse consumers, country by country and city by city. Companies such as Coca-Cola have conducted careful customer segmentation exercises, then evolved their traditional products and created new ones to target each segment.
Fourth, shape the ecosystem you need to thrive.
The guiding question here is: Who will we work with to win? A company’s ecosystem must be broad enough to provide all the elements it needs to run its business in Africa. These include reliable power and water supply, appropriately sited land, a robust supplier base for everything from raw materials to business services, and a distribution network that can get its product into towns and villages across the continent.
The integration of Africa’s economies — many of them rapidly growing — offers exciting opportunities for companies that craft bold yet wise geographic expansion strategies. It also opens up the potential for more large-scale African corporations to emerge. McKinsey’s research shows that Africa is already home to more than 400 companies with annual revenues of $1 billion or more, but this is just 60% of the number one would expect if Africa were on a par with peer regions.
We might think of big companies as the baobabs of the business landscape: Not only do they tower above the rest, they also have deeper roots and longer life spans. Known as the tree of life, the baobab produces highly nutritious fruit that sustains many communities. Business baobabs, too, enliven their local economies: They contribute disproportionately to higher wages and taxes, productivity improvement, innovation, and technology dissemination. Like baobabs, large firms create their own ecosystems, fostering small-business creation through their supply chains and distribution networks. They are also better able to attract capital, which means they are much more likely to compete on the global stage. We are confident that regional integration will help spur the growth of many more business baobabs across Africa.
Acha Leke, is a director at McKinsey & Co in Johannesburg.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
Frontier markets — developing countries that are more developed than the least developing countries, but are too small, risky, or illiquid to be considered emerging markets — are high-risk, high-reward opportunities for today’s young tech entrepreneurs. Among such frontiers, global analysts have proclaimedtime and again that Africa is the future. Dynamics in economic growth, demographics, and connectivity make this obvious — and Nigeria sits at the intersection of all three trends. Nigeria has been an innovation hub for Sub-Saharan Africa and a hotbed of entrepreneurship and young talent.
The challenges facing an entrepreneur in a country like Nigeria are incredibly steep and require an uncommon level of savvy and adaptation. While building and scaling my company, I faced difficulties which included accessing capital and talent, sorting through unpredictable regulatory crises, and solving for market size and a fragmented customer base. I learned to rely on my strengths of being able to study markets and the local culture and be able to keep adapting the product offering based on user feedback to bypass the inevitable roadblocks in an entrepreneur’s path to success.
What to do when capital is scarce
In frontier markets, as elsewhere, it all starts with capital — a lack of which can stop a good idea in its tracks. For startup founders in Nigeria, finding capital to fund their vision can be difficult, if not impossible. Because my co-founders and I were MIT graduate students, we were able to leverage our network while at school in the U.S. before heading back to Lagos. We got into TechStars, a startup accelerator in New York, and established our business with the help of accomplished entrepreneurs and mentors there before returning home to Nigeria. With capital markets much less developed in a place like Nigeria, my co-founder and I always recommend that peers seek entry into a top-tier global startup accelerator in Europe, the U.S., or Asia.
Finding good talent can be an uphill battle
Access to talent presents a similar challenge, due to a shortage of top-quality tertiary education in frontier markets. Only 6% of prospective students receive some tertiary education in sub-Saharan Africa, compared with 80% in developed countries. This shortage is even more dire in the computer science (CS) field — CS departments on the continent are under-funded and unable to accommodate the number of students who wish to enroll. Facing this challenge, my co-founders and I hired our first technical team members from MIT. When we launched in Lagos, we recruited local talent through referrals from friends in the tech ecosystem and through LinkedIn. We couldn’t afford to pay the market rate at the beginning, so we learned to sell our company’s mission — of making mobility safe, affordable, and accessible to 1 million Africans — to attract great talent.
Cultivating relationships is critical
Sure, engineering talent is crucial to the success of a start-up, but in frontier markets like Nigeria, soft skills like communication and adaptability are even more critical to deal with regulatory challenges. For many African startups, regulatory challenges will present an existential threat at some point in the early stage of a business. Bureaucratic bottlenecks are commonplace, tax requirements spread across multiple jurisdictions, and regulations can change at the drop of a hat. In an environment that lacks a predictable regulatory process, founders have to stay on their toes.
In July this year, for example, my co-founder and I heard reports that the Lagos state government was proposing a new regulation for bike-hailing startups. In anticipation of such events, I have been cultivating good working relationships with relevant government officials over the past four years. My relationships with regulators have given me access to information around potential reforms as well as the opportunity to influence those reforms. My co-founder and I built relationships with regulators around the common goal that Nigerian consumers should be able to access higher-quality transportation in an affordable way — which gives us credibility and access to crucial information.
For startup founders in frontier markets, engaging regulators is a survival skill and a chance to influence long-term prospects for sustainable growth. The opportunity to participate in such conversations is one of the greatest honors of operating a start-up in a frontier market.
Consider scalability and price
Market size and fragmentation present, for some frontier start-ups, a fundamental limitation that must be baked in at the concept stage. In our case, we had to engineer a technical product with unique pricing challenges and market barriers in mind.
For example, while disposable income in sub-Saharan Africa is among the lowest in the world, our product is intended for mass-market consumption across the continent. We’ve had to tailor our pricing and services to maximize exposure to the greatest number of low-income consumers, which limits our margins. Our company had to be scalable from day one in order to be profitable, a challenge that many founders in developed markets don’t encounter until further down the line. Further complicating things, Africa is not a homogenous market. Barriers abound — from cross-border payments to multiple languages within a single community to differing cultural attitudes around transportation. The only way to work around these barriers is to live within them — entrepreneurs like us rely on strong communities, wide networks, and authentic relationships in order to navigate such a fragmented system.
Our experience has left us with the certainty that market immersion is as essential to successful entrepreneurship in a place like Africa as is access to capital and talent. Building a product that is really in demand, that people will connect with across boundaries, and that consumers can adopt at scale requires an intuitive sense of the market. Founders who are serious about frontier markets must go there themselves, be in constant contact with customers, suppliers, and regulators, and gain immersion in the culture. The rest will flow from there.
Adetayo Bamiduro is the CEO and co-founder of Max.ng, a bike-hailing startup in Nigeria. He founded MAX at MIT and built up the initial team at MIT throughout the fall of 2014, bringing on graduate students and undergraduate software engineers from across MIT. He developed a full business model and a minimum viable product, launched in Nigeria, and has successfully raised over $9m in funding to scale across West Africa.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
Finding and getting venture capital for your startup can be daunting. Where do you start? Here’s how to find and get venture capital for your startup.
Startups and venture capitalists are so closely linked in the tech world that it can be hard to think about one without the other. We certainly wouldn’t have our tech giants, like Facebook or Twitter or basically any other startup-gone-big you can think of without VCs. But, finding and getting venture capital for your startup can be daunting. Where do you start? How do you start? Don’t fret — we’ve got you. Here’s how to find and get venture capital for your startup.
THE APPROACH:
Focus On The Firms That Align With Your Values
While it might seem like the more VCs you contact, the higher the chances of investment are, that’s the wrong approach. You shouldn’t try to contact as many people as possible. Instead, try to find venture capital firms that are the best possible fit for your startup and your deal. The more closely aligned your startup and you, as the founder, are with the needs of the venture firm, the more likely you’ll find venture capital firms willing to write you a check.
Some questions to consider as you’re looking for a good VC fit for your startup include:
What other companies have they invested in? Are those companies similar or different to your startup? Have they invested in a direct competitor?
What stage of funding do they like to do? If they’re primarily interested in Series A, you shouldn’t be going to them for seed funding.
Is your company really a startup — or is it a small business? VCs are interested in exponential growth. If that’s not what you’re offering, it may be a good idea to consider other funding sources.
Does your long term vision for your startup match the long term vision of the VC? For example, some may be looking for a quick exit, while others are more interested in building value over time. Take a look at their prior exits to give you an idea of what you’re potentially getting into.
Make A Warm Connection
The first step to finding venture capital is to make a smart introduction to the venture capital firm you’re interested in meeting. Venture capitalists rely heavily on trusted connections to vet deals. While some VCs will take pitches from an unsolicited source, it’s best bet to find an introduction through a credible reference. Every pitch to a venture capital firm starts with an introduction to someone at the firm. It helps to know the exact profile of a venture capitalist to know which level of introduction makes sense. Typically it’s starts with an introduction to an associate and then you can work their way up to the full partnership.
Do Your Homework
But, if you can’t find any connections? Your next best alternative is to make the warmest possible introduction. You’re looking for any connection you can make to the venture capitalist so that you can demonstrate you’ve done your homework and you’re not just sending out form letters. Look for any background you can find on what previous deals they may have done that relate to your pitch. Look for some recent press that they may have gotten that you can refer to. You just need to create a little bit of warmth and personality to what is otherwise a cold intro. Showing that you’ve already done some of the homework will go a long way toward making sure you don’t wind up in the “deleted” folder. Luckily for you, most VC firms have a documented process founders should follow in order to guide their approach.
Craft And Send An Elevator Pitch
The first thing a founder needs to send to angel investors is an elevator pitch via email. The elevator pitch isn’t a sales pitch. It’s a short, well-crafted explanation of the problem a startup solves, how they solve it, and how big of a market there is for that solution. That’s it. You don’t need to “sell” the angel investor in the introduction. The opportunity should speak for itself.
Craft And Send A Pitch Profile
Sending an elevator pitch along with a 20 megabyte PDF document is a surefire way to never even make it past an investor’s spam filters. Instead, send a link to your pitch profile, which is an online profile that explains a little bit about the deal and provides a way for the investor request more information. You can create a funding profile on Fundable.com. It’s quick to do and is an easier way to provide a reference back to a company profile than messing with attachments.
THE PREP WORK:
The Executive Summary
Investors may also ask for an executive summary but, over the past decade, this has become less and less common, with most preferring a pitch deck. Regardless, it’s a good idea to have one prepared — just in case. The executive summary is a two to three page synopsis of your business plan that covers things like the problem, solution, market size, competition, management team and financials of your startup. It’s typically in narrative format and includes a paragraph or two about each section. You can expect the angel investor to jump to the one section they’re most concerned about, read a couple paragraphs, and then maybe look a little deeper. They figure you’ll answer most of these questions in the pitch meeting, so they’re not going to spend too much time on the documents.
The Business Plans
Venture capital firms don’t actually read business plans, but they sure are glad when founders have one. Business plans aren’t really about the document itself — they’re about the planning that goes into composing the document. It’s highly unlikely that you’re are going to get asked to submit a full business plan to a venture capital firm, but it is likely that you’ll be asked all of the hard questions that could be answered in the business plan, so putting one together is a perfect way to prep for your meeting.
The Financials
Of all the documents that you’re going to be expected to be armed with, the financials are the most important. Most venture capital firms are going to expect a reasonable four-year projection of the income and expenses of the business. They’ll want to know how quickly you’ll be able to get the business to break even. They’ll want to know what you’re intend to use their money for. And, of course, they’ll want to know how you intend to get their investment back to them — with a healthy return. You should be prepared to provide an income statement, use of proceeds, and breakeven analysis, at the very least.
The Pitch Deck
A pitch deck is essentially a business plan or executive summary spread across 10 to 20 slides in a PowerPoint document.
Investors like pitch decks because they force you, the founder, to be brief, and hopefully use visuals instead of an endless list of bullet points. The pitch deck is your friend and most trusted ally in the pitch process. You’ll use it as your main collateral item to get meetings, it will be the focus point of your meetings, and it will be what investors pursue after meetings.
THE PRESENTATION:
Once the investor has reviewed the your materials and determined they are interested in meeting with you, the next step is to arrange a time for a pitch meeting. In some cases — particularly with early stage investment — the pitch meeting is more about the investor liking you as a person than it is just pitching the idea. So take a little time to establish rapport. Investors will more often invest in an entrepreneur they like with an idea they have some reservations about than an idea they like and an entrepreneur they think is a jerk. During the pitch, you’ll run through their pitch deck and answer questions. The goal isn’t to get to the end of the pitch deck in 60 minutes or less. The goal should be to find an aspect of the business that the investor actually cares about and zero in on that point. If the investor wants to spend 60 minutes talking about the first slide, you shouldn’t rush them. There are no points awarded for presenting the 20th slide. Focus on the conversation.
THE FOLLOW UP:
The last item is kind of a catch-all that we’ll call “due diligence.” When the venture capital firm gets more interested in a deal, the next phase of discovery is called due diligence. During this phase, they’ll dig into all the details of the business, from financials to the details of how the business model works. This is where all of the research and support you’ve put together will be put to the test. They’re likely going to ask you to prove how you arrived at the market size they’re going after. You may also get asked to have your early customers talk to the venture capital firm. Assume the firm is going to do its best to make sure everything you said actually checks out. As you embark on this process of getting venture capital, you’re going to hit a lot of hurdles. You’re going to be torn down — and you’re going to hear a lot of “nos.” Raising venture capital is often one of the hardest and most frustrating part of the startup lifecycle, but it’s also potentially one of the most rewarding. Because if you persist and persist and find the right fit? That check is going to be what takes your company from bootstrapped to international.
The Startups Team
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
Will investors fund my startups? Does your startup really have a chance of getting funded?
Whether you are still debating whether fundraising is the right path right now, or you’ve had some rejection and want to know whether it’s worth continuing, these questions will help you evaluate your startup, and improve your game to increase your odds of getting funded.
Or you might find it’s time to make a quick pivot to give your vision the best chance of success.
Does Your Founding Team & Board Of Advisors Give Investors Confidence?
When it comes to early-stage startups and funding rounds, a lot is riding on your team.
You may not yet have revenues or even a finished product. Even if you do, investors at pre-seed through Series A are mostly looking at the strength of your team.
When thinking about will Investors fund my startup having a strong business idea is great, but there are few truly original ideas. What investors are looking for is the best team to execute.
Investors will be looking to see if you have any track record in successful startups, if you truly have domain experience, are being realistic, how many cofounders you have, and the advisors you’ve brought in. If you have any gaps or weak areas on your team, hire or bring in help that will round things out, and give investors trust in your ability to make your plans happen.
Do You Have Really Big Market Potential?
How big is your industry? How big are your potential gains? What does growth look like in this space over the next few years? This are questions you should ask yourself ahead of thinking the if of will Investors fund my startup.
Billion-dollar companies used to be something really rare and special. They still are great success stories but are far more common than they used to be.
You’re now competing in an ecosystem where other startups are worth tens of billions of dollars. You may end up selling or being acquired much sooner than you planned, but if you want to get funded, you should be aiming for a really big market.
This not only gets investors excited but is the range in which you have to operate if you are going to deliver those super attractive 100x returns.
Break down your market by not only total size, but total addressable market segment you are a good fit for, and a reasonable percentage of market share you can achieve.
Most businesses that never make it have nice to have products that really aren’t solving an urgent problem. If you’re going to count on people being willing to part with their precious hard-earned dollars, and more importantly, give you the time and attention to spend them with you, then you’ve got to be tackling a serious need.
Are people really searching for a solution to this right now? Will this still be one of their biggest problems in five and 10 years from now? Could this lead investors to fund my startup?
Do You Have Product-Market Fit With Your Target Customers?
You may not have it yet depending on what stage of business you are at, but it is one of the most important and hard to nail factors for startups. Achieving product-market fit is a great selling point for investors. Even if it is still at a modest level.
Securing and proving product-market fit is really about proving people are willing to pay for your solution. Getting a lot of website visits and inquiries from leads is a good sign. Though unless you actually have users, happy feedback and preferably paying customers you may not have proven you’ve got it, yet.
Do You Have A Great Pitch Deck?
You can have everything else right, and have all the right ingredients for startup investors would want to fund, but if you aren’t conveying it well through an effective pitch deck you still won’t get funded.
You have to bring together all of the points here in a cohesive, smooth flowing and easy to understand the deck.
Be careful not to get lost in endlessly tweaking your deck before launching a fundraising campaign.
Are You Ready For Rejection?
It can take a lot of rejection to get to a yes. You might be the exception and get a check on your first cold email ask. Many of the most successful entrepreneurs I’ve interviewed on the Dealmakers Podcast say they faced many rejections for their first startup. If you can’t take 50, 200 or 300 no’s in order to get your business funded, then you may not get funded.
The same goes for winning customers. Your sales team may have to hit 25, 100 or 1,000 no’s before they get a sale. Especially in the early days.
Are You Pitching The Right Investors?
Fewer rejections and more checks come from pitching the right investors.
You’ll greatly streamline the process of fundraising and save a lot of time and stress by finding the best fitting investors. This will also make doing business with them on your cap table and board a lot easier later too.
Deeply consider the type of investor you want to be involved in your business. Find those who are looking for opportunities like yours already. Provide them your opportunity.
Do You Have A Good Business Model?
When you are asking will Investors fund my startup, remember there will always be a demand for investments in good businesses. A new a crunch or recession driven by poor startups could make it harder and investors more demanding when they consider funding.
Look at WeWork that recently lost 75% of its valuation, as well as some other recent IPO, fails. Some companies are still losing tens of millions of dollars each quarter. They may have a strategy, but if you focus on building a great business, there will always be a market for your business and people will want to fund you.
Alejandro Cremades is an internationally recognized serial entrepreneur, author and fundraising consultant and M&A advisor.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
Freelancers play a very important role in the startup ecosystem today. Here are 4 important steps for hiring the right freelances to help you successfully launch a startup app idea.
Fifteen years ago, the thought of hiring complete strangers to build a startup app idea was out of the question for most entrepreneurs. Today, I could spend the whole day citing studies backing the significant contribution of freelancers to the startup community and the world economy at large.
Abdo Riani, founder of StartupCircle.co
When I started my first startup venture back when I was a Sophomore in college studying business, I didn’t have the programming skills to build my product. I thought it was impossible to bootstrap my venture without funding to hire and manage people with complementary skills. Freelancers made it possible.
One of the biggest lessons I learned working with over 70 freelancers over the years is that hiring the wrong freelancers and failing to carefully manage the projects will end up costing more than taking a more traditional full-time hiring approach.
In the case of application development, it can take months and tens of thousands of dollars to realize the product doesn’t meet expectations. Most entrepreneurs quit at this point after incurring a big loss without even getting to market. Making the same mistake twice is deadly. Follow these steps to hire freelancers that can increase the probability of success of your startup app idea.
1. Do Your Startup Homework
No matter the complexity of your introduced concept, there are many ways to test your business hypotheses before building an app. Getting hands dirty to maximize customer understanding in the initial stages will help you define what you need to build with higher certainty.
Like any business, startups require an investment. A big chunk of this investment is time. Funded or bootstrapped, it’s usually cheaper to waste time than money especially in things that can be tested by interviewing your potential buyers and using no-code tools to create quantitatively testable prototypes.
Once you’ve exhausted all channels to gather feedback, build an audience and perhaps even presell an idea before building the app, you’ve completed your startup homework and should be ready for the next stage. This first homework phase will also help you answer a very important question: is my idea even worth pursuing? If the answer is NO, it would have been very expensive finding this out after building an application.
2. Look For Entrepreneurial Freelancers
Picture this, you’ve been assigned a project with clear requirements. After spending weeks making a significant progress, your boss asks you to make changes that set you back weeks. A few weeks later, you get another call with more changes and additions. How would you feel?
This perfectly describes the nature of building a startup and how most freelance programmers feel about constant changes in project requirement. Even if they are compensated on an hourly basis, you’ll soon start feeling resistance and objections to many changes. You’ll hear comments like, “this will set us back a few months,” “why don’t we launch this version first,” “this will delay launch and significantly increase costs,” etc.
What you need is entrepreneurial freelancers. Those are entrepreneurs who offer freelance services but also have started and run several entrepreneurial projects. It’s not that freelancers with an experience building startups won’t occasionally disagree with changes in project scope, they’re different because they can ask you the right questions, help you design the best launch plans and guide you to build a successful venture.
If it’s the first version of your startup app idea, entrepreneurial freelancers will make sure you only build the needed features that will allow you to test the riskiest assumptions quickly. They’ll help you analyze data and translate feedback into features that people need. They’ll tell you when it’s the right time to iterate, pivot or change ideas completely. Essentially, they’ll help you build a startup not an app. It’s easy to build an app, the question is how to build an app that people use and pay for.
3. Set Business Goals
Entrepreneurial freelancers would understand this even if the performance of the startup may not be solely dependent on the quality of the product they build. Business goals like signing the first 50 beta testers, acquiring the first 10 paying customers, or building the first key partnership will help the freelancer do a better job in terms of defining project requirement, timelines and priorities.
Traditionally, building technology products starts by creating a project scope that lists the features, requirements, deadlines and costs. Freelancers are hired to turn a dozen pages into a functional application.
Product development changes happen when the freelancers are not involved in the startup. It’s when founders talk to more people, run more tests and realize things must be done differently. This creates tension, resistance and disagreements. Make sure to evaluate and define business goals with your hires. It will make their job easier and more fun.
4. Compensate Fairly
Freelancers run a business. Betting on a startup idea that may realize a return a few years later is not going to pay the bills today. While hiring freelancers is in my opinion one of the best ways to turn an employer/contractor relationship into a co-founding partnership, until then, be sure to compensate them fairly so that they don’t have to think about the money in your partnership building the startup.
An equity agreement or a promise of a future increase in payment will most likely turn badly once the first version of the product is out. When inexperienced freelancers realize the amount of time it will take them to reach later stages in the business, they start losing interest. This usually doesn’t take long.
Lastly, the most important freelance hiring tip is to understand that startup development cannot be outsourced. Not even the most committed freelancers in the world will be able to build your startup for you, care as much as you do and be as passionate as you are. Hire the right freelancers to make your job easier as a founder.
Abdo Riani is the founder of StartupCircle.co
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
Whether intentional or not, the tech startup landscape has been optimized for middle- and upper-class white males. According to one analysis, 77% of venture-backed founders are white and 90% of them are men.
If you are a nontraditional tech entrepreneur — meaning you aren’t a white man — it’s important to understand the environment you’ll be navigating and the challenges you need to overcome to succeed in this field.
Cheryl Contee, the award-winning CEO and co-founder of Do Big Things
1) Don’t Be Afraid to Fail Up
While every entrepreneur knows failure is a possibility, women and minorities feel more social pressure to be risk averse. Risk carries a higher price for them, real or perceived. This is especially true if you are a black or brown person. We are surrounded by news and media that teach us we will be treated differently because of the color of our skin, even in seemingly safe situations. This narrative is validated every time we are eyed suspiciously for simply walking down the sidewalk, told to “dim our light” or “smile more,” and of course, when we are confused for another person of color in the office.
Don’t let it stop you from moving forward. It’s true that discrimination and bias are prevalent in the workplace. It’s true that microaggressions are still widespread. It’s true that you might not get the result you want because your appearance doesn’t match someone else’s expectation. It’s true that if you make a mistake, it might seem larger in someone’s mind than if the offender were white. It’s also true that, to have the same amount of success as a white male entrepreneur, you’re going to have to work twice as hard and be twice as good. What all this means is you need to conquer your fear and go in with the right mindset.
Initially, you’re going to feel a lot of pressure. Maybe becoming an entrepreneur is perceived as a bold and an unconventional career choice in your community. Maybe your ambition makes you a role model, and your success would mean you beat the odds. Maybe you’ll ask yourself: “Will the people who look up to me be ashamed if I fail? If I take this leap and it doesn’t work out, will I ever be able to get another job?”
Move past this fear of failure by remembering that a startup can bring returns, even if it fails — and most startups do fail. Whether it’s low revenue or core team conflicts, sometimes your business won’t work out the way you hoped. But if that happens, the next VCs you approach, or the next company you apply to, will see an ambitious, hard worker who took a chance, ran a company, and made executive decisions. They’ll see a person who’s been through the fire and held their head up high when they came out the other side. Someone who has learned a lot in a short period of time.
And when you pitch yourself for the next big opportunity, your story should never be “I failed.” It should be “I tried something bold and it didn’t work out the way I’d hoped. Here’s why.” Remember, if you don’t take the risk at all, you fail before you even begin. Think of risk as a chance to succeed — even if you fail.
2) Find the Right Investors
Conventional wisdom will tell you the first startup funding round should take about six months. This may be true for the traditional founder, who, because of his background, often has more resources at his fingertips. He is more likely to come to the table with financial backing and interpersonal connections. Those connections can help with introductions to potential funders, team members, clients, media, and strategic partners. He may even come from a family of entrepreneurs, or have access to higher-ups who serve as mentors.
But if you’re a woman, a minority, or you come from a low-income background, you probably have fewer resources to tap. Many minority and female startup founders are just like my business partner and me. As a technologist, I’m one of the highest earners in my extended family. If I tried to pass a hat around when I launched my startup it’s more likely that, by the end of the conversation, I’d have a list of people who owed me $20. When you are the most successful person in your family, a “friends and family” round of funding will not be possible. Investors might read your lack of resources as a lack of hustle and be more reluctant to offer you that all-important seed capital.
This means you’re going to need investor or bank funding earlier in your startup’s lifecycle. But who receives money is too often determined by who feels the most familiar to those giving it. Some investors have been quite blatant about their own bias — and even discrimination — in making these kinds of decisions. John Doerr, the acclaimed venture capitalist, spoke about this during a 2008 interview. “They all seem to be white male nerds who’ve dropped out of Harvard or Stanford, and they absolutely have no social life,” he said of his investments in Google, Amazon, and Netscape. “When I see that pattern coming in — which was true of Google — it’s very easy to decide to invest.”
Nontraditional founders don’t fit that mold. Finding the right investors and raising the funds you need could take a long time. This will impact your burn rate. To prepare, plan to be looking for twelve months or longer. If you have six to 12 months to raise money, and it takes you twelve or longer, that will directly impact your payroll. Be smart about stretching that dollar as far as you can. Look into strategic partnerships. You know the space and the technology with which you need to integrate — those are the potential partners you should prioritize. Many organizations may be especially interested in a partnership if you show them how you can improve their products, and if you do, your relationship may even lead to an offer.
And don’t give up. Even if you’re beyond the twelve-month time frame, focus on finding that first investor who gets you and your vision, and who wants to support you. Early seed investors are a good option, and are easier to find than you might think. Simply search keywords like “angel investors,” “angel networks,” “startup accelerators,” or “startup incubators” online. Then add phrases that help narrow the search towards those looking for people like you. Joining a social network specifically designed to help investors and entrepreneurs connect, such as Angel.co, F6S.com, or even LinkedIn, is another a good way to meet the right people.
3) Level Up Your “Army of One” Mentality
There was a time in my career when I was passed over for a big promotion as a result of gender and/or racial bias. I had to make a tough decision to stay at the company or go out on my own. When I decided to take the leap and leave, I knew I was ready to launch a tech startup and be my own boss — an idea I had thought about for years. I tweeted in attempt to put feelers out and expand my network: “Hey y’all, I’m available for new projects. Who wants to partner with me?” I sent that message because I knew this truth: Even the best founders can’t do everything themselves.
But for so many people who’ve been in my shoes, there’s a temptation to isolate. When you experience discrimination at work, it can fracture your trust in larger systems and their ability to recognize your talent, contributions, and drive. Instead of connecting with others, you become an “army of one.” This mentality can carry you to the point I was at — ready to launch — but it can also keep you from going any further.
To succeed in the startup world, you need a good team. Research shows that investors are looking for a team that not only has experience, but also entrepreneurial passion and shared strategic vision. A good team will supplement your weaknesses as a founder, help you refine your idea, and handle parts of the business that aren’t your superpower. You don’t have to have all of your team members in place when you start fundraising, but you should have an idea of where you sit on the team and where the other team members will factor into the overall equation. Other core team members usually include the tech lead, sales and marketing lead, and an advisor.
Make sure that your team is a diverse and inclusive one, in as many forms as possible. Beyond race and gender, consider people from different economic and ethnic backgrounds, people with a disability, and more. Investors and future team members will look for diversity as a signal of your values and your understanding that having multiple perspectives will help you outperform competitors and maximize outcomes.
4) Skip the Business Plan in Favor of a Pitch Deck
The best way to find investors, customers, team members, and suppliers is to talk to as many people as possible about your idea. Go to networking events, seek out mentors, and tell friends. Find an accelerator or incubator program that can help you work on your business and introduce you to investors. Use AngelList, LinkedIn, F6S (as mentioned above), and find other social media communities on platforms like Twitter (#startup, anyone?) and Facebook Groups dedicated to your topic of interest. Don’t worry if not everyone gets it. Your objective is to get feedback, adjust, and connect with people who want to join forces, or who can introduce you to stakeholders who do.
Once you’ve determined that your idea is viable and you’ve gained some support, begin working with your team to develop a startup pitch deck. (Nobody reads traditional business plans these days.) To capture the attention of investors, make 10 slides that tell the story of your startup, and answer the questions that prospective customers or stakeholders will have. Here’s a rough blueprint you can use to get started:
Slides 1–4 introduce what your startup is trying to do:
Slide 1: your vision or big idea
Slide 2: the problem
Slide 3: the solution
Slide 4: the market
Slides 5–10 address your business model:
Slide 5: how you’ll make money (cost vs. price)
Slide 6: where people will buy your product
Slide 7: your marketing strategy
Slide 8: how you compare to the competition
Slide 9: your team (reference the previous point)
Slide 10: the investment you’re asking for
Show your pitch deck to as many people as possible before you go into formal pitches. You’ll gain insights that will help you identify areas for improvement and fine-tune each slide.
5) Show Investors the Money
You are likely very passionate about your product or service and how it can change people’s lives. But investors want to know first and foremost how you are going to make them money. Don’t diminish your passion when it’s time to pitch, but be sure you are also presenting the cold hard facts.
Your startup may be solving a problem that impacts your community. Maybe you’re pitching a service focused on the multibillion dollar black haircare market, or shapewear designed for women (believe it or not, some investors had a tough time wrapping their minds around Spanx at first). But there is a chance that the problem you care deeply about doesn’t impact the daily lives of your white male investors — and the majority of investors are white males. Don’t be surprised if they are dismissive, write your idea off as irrelevant, or demand more information. You will have to work harder than most to take them on a journey during your pitch, to help them see the world through your eyes, and to imagine the game-changing opportunity your startup offers.
One way to do this is to “show them the money.” Present data points that highlight the size of the market they’re unfamiliar with, how much that market spends on the competition you’re going to crush, and how much they could be spending on your product.
Take the case of Candance V. Mitchell and Chanel Martin, two entrepreneurs who wanted to raise funds for Myavana, a startup offering personalized hair service for women of color. When presenting to investors, they drove home the fact that hair products for African-American women is a $3 billion market in the U.S. and secured $200,000 in funding from pitch competitions, as well as $25,000 from Dream It Philly’s accelerator in 2014.
If you do manage to secure funding, don’t think you’re out of the woods just yet. Remember, none of this will be easy. Chances are, you’ll be undercapitalized. While there’s been a big increase in startups with nontraditional founders over the past 10 years, those with black female founders have raised only 0.0006% of the $424 billion in total tech venture funding raised since 2009 — almost nothing. This means you probably won’t have as much money to play with as your white male Silicon Valley peers.
Stay on the up and up. During your entrepreneurial journey, a lot of things will happen that will make you think you can’t go on, or that you don’t have what it takes, or that you will never be good enough, or that you should just do what others tell you to do. Believe in yourself and follow what is the next right move for you. If you fail, you will learn. If you slip, pick yourself up. Just keep going. Entrepreneurship is about having the resolve, the persistence, the character, and the perseverance you need to keep rising toward your prize.
Cheryl Contee is the award-winning CEO and co-founder of Do Big Things, a digital agency that creates new narrative and new tech for a new era focused on causes and campaigns. She also is the Amazon bestselling author of Mechanical Bull: How You Can Achieve Startup Success.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
