Advice regarding fundraising for a young founder (19 y/o)

Hi! I’m the head of an early-stage (MVP) startup in the cannabis industry and I’m 19 years old.

After running my own small local business for 2 years (35000$ annual revenue part time + 3 contractual employees from only 300$ in initial capital) in the vape industry, I decided to make the jump to the startup ecosystem. After a lot of research and interviews, we stumbled upon a big problem that is severely unaddressed and we found an innovative way to solve it. Massive interest from the market so far, many LOIs + more solid traction (100+ wanting to preorder without any advertising).

Even though we are 2 founders (3 soon) and my partner is 29 y/o, I’m the CEO and the one that will pitch investors for our seed round. I have solid knowledge of how to run a business (personal experience + family) but I fear that investors will doubt me because of my age.

What advice would you give me to reassure potential investors? Will my age severely affect our chances to raise money?

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Startups – Rapid Growth and Innovation is in Our Very Nature!

Breaking the Fundraising Mold — How Turing’s Founder Ran A “Parallel Approach” To Raising Capital

Jonathan Siddharth shares his unique approach to raising a seed round, including tips on how to reap the benefits of it.

Entrepreneur's Handbook – Medium

Bloom & Wild’s flourishing fundraising: London-based online florist reportedly set to raise a whopping €82M

Bloom & Wild

Bloom & Wild, a London-based online flower gifting company, is reportedly all set to raise $ 100M (approx €82M) in funding from various investors including Index Ventures and General Catalyst. According to the report, the UK company will be valued somewhere around $ 500M (approx €408M) post the funding round.

Investors

Index Ventures is a venture capital firm based in London, San Francisco, and Geneva, helping ambitious entrepreneurs turn bold ideas into global businesses. So far, the company has invested in Adyen, Deliveroo, Dropbox, Farfetch, King, Slack, and Supercell. 

On the other hand, General Catalyst, a Cambridge-headquartered VC firm makes early-stage and growth equity investments. The company has backed Airbnb, BigCommerce, ClassPass, Datalogix, Datto, and others.

Redefining flower delivery service

Founded by Aron Gelbard, and Ben Stanway in 2013, Bloom & Wild is on a mission to redefine flower delivery service and is on its way to becoming the UK’s leading alternative to traditional online flower companies. 

So far, the company has raised a total of £21.3M (approx €23.6M) in funding over five rounds. Their latest funding was raised on Sep 30, 2018, in a Series C round from Piper Private Equity. 

Sales growth during pandemic

Bloom & Wild says that it has witnessed a huge demand during a pandemic, especially during the recent Christmas period. The company’s app, available on both Android and iOS, is powered by slick technology and its bouquets are imagined by the world’s best floral designers, claims the company.  

In their blog post, it mentions, “We source our flowers directly for quality and rigorously test them for longevity. We then hand-pack and deliver in our bespoke letterbox packaging, which means your recipient doesn’t have to be home.”

 Fifth fastest-growing business

At present, the flower delivery company operates in the UK, Germany, France, and Ireland. Notably, Bloom & Wild has been recognised by Deloitte as the second fastest-growing company in the UK and the fifth fastest-growing business in Europe. 

The company is also a member of Tech Nation’s Future Fifty, Bloomberg Business Innovators, and City AM’s The Leap.

Startups – Silicon Canals

Fundraising Thursdays – A Forum to Ask About Fundraising, Investors, Accelerators, and Other Sources of Capital

Welcome to this week’s Fundraising Thursdays Thread.

Ask about anything related to fundraising, investors, accelerators, grants, and other sources of capital.

That includes how to find these sources, how to work with them, and how to negotiate with them.

Don’t be shy. The purpose of this is to learn and share ideas and methodologies with one another.

Any question is a good question!

If you are answering questions, remember to be kind and supportive. Many are just starting out and have no idea what they are doing. That’s okay! We all knew nothing before we knew something.

You can also find more support using instant chat on the /r/startups discord.

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Startups – Rapid Growth and Innovation is in Our Very Nature!

Fundraising Thursdays – A Forum to Ask About Fundraising, Investors, Accelerators, and Other Sources of Capital

Welcome to this week’s Fundraising Thursdays Thread.

Ask about anything related to fundraising, investors, accelerators, grants, and other sources of capital.

That includes how to find these sources, how to work with them, and how to negotiate with them.

Don’t be shy. The purpose of this is to learn and share ideas and methodologies with one another.

Any question is a good question!

If you are answering questions, remember to be kind and supportive. Many are just starting out and have no idea what they are doing. That’s okay! We all knew nothing before we knew something.

You can also find more support using instant chat on the /r/startups discord.

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Startups – Rapid Growth and Innovation is in Our Very Nature!

Heading into 2021: Venture fundraising, liquidity and the everything bubble

The last twelve months have provided us with shocking lows and surprising highs. In startup land, great expectations in January and February were followed by dashed hopes in March.

Those woes were followed by April despair, surprised optimism from May through June, and, finally, a straight shot all the way to the moon through December.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


It’s been a lot. But it’s all behind us. We don’t need to spend more time thinking about 2020 for now. We need to look ahead.

This morning, I’ve compiled notes on what’s coming. We have notes from GGV’s Hans Tung on the 2021 IPO market, Sapphires’s Beezer Clarkson on what fundraising will look like for VCs next year, and a prediction from the PitchBook analyst crew that caught my eye.

This is the last Exchange column for 2020. Thanks for reading so I could keep having fun every day at my job. Now, to work!

2021

We’ll start with the 2021 IPO market, only because so many of you cared so very much about it this year.

Hans Tung, an investor at GGV and recent Extra Crunch Live guest, is an investor with an international perspective and a good read on global startup liquidity. So, when I got on the phone with him last week to catch up, I wanted to know his read on the 2021 IPO market.

Given that we’ve seen a number of blockbuster IPOs this year, I was expecting him to forecast an active start to the year. Correct.

But Tung added that while Q1 could be very busy, Q2 could present a lull. Why? Tung expects IPOs that failed to finish the job in Q4 2020 to slip into the first quarter of next year. That explains why the first quarter is busy. But why the slowdown in the following three months?

Startups – TechCrunch

Fundraising with a 9-5?

This might be a stupid question, but what are the expectations around fundraising? I’m thinking about raising a friends and family round, but I have no idea if that means I should quit my current job?

I’m right out of college but have a great business plan that I’m ready to start executing on, but leaving my first job during a pandemic seems like a dumb idea

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Startups – Rapid Growth and Innovation is in Our Very Nature!

The 8 Biggest Fundraising Mistakes Entrepreneurs Make


About 6 million new businesses start in the USA every year. Of these, only 70,000 get angel investment, and less than 5,000 get venture capital. That is, the remaining 5.92 million businesses either bootstrap or make inevitable fundraising mistakes that prevent them from raising funds.

So, if you don’t want to be in the 98% of the businesses who fail to raise external funds, you need to avoid certain fundraising mistakes. 

But the problem is that entrepreneurs realise these mistakes only after they make it and get rejected. 

But fret not, we’ve listed down the eight biggest fundraising mistakes that you need to be wary of while approaching the investors, pitching to them, and signing contracts.


Assuming Valuations And Demands

The biggest fundraising mistake you can make is to assume how much money you’ll require and what should be the pre-money valuation of your startup.

The problem?

Investors won’t believe the same unless you show them growth figures, traction, or material evidence to back up your claim.

Precisely, you shouldn’t claim your startup to be valued at $ 1 million just because you think it’ll work out. Startup valuation depends on a lot of factors like:

  • Current revenue (if applicable)
  • Current traction
  • Traction trend
  • Industry
  • Industry trend
  • Market share of the startup
  • Market share acquisition forecast
  • Founding Team
  • Burn rate
  • Churn rate
  • Investor’s interest, etc.

Your startup’s valuation is derived from the current position and the future projection of growth. In the usual scenario, the current revenue and revenue growth is taken into account. In startups with less or no revenue, valuation methods like Berkus Method, cost to duplicate, discounted cash flow method, etc. are used.

Make sure your valuation is justified before heading to the investors.

Moreover, as an entrepreneur, never be greedy. Overfunding may kill your startup just like underfunding might. Investors often offer a temptation of higher funding amount in return for a higher stake. This offer, though tempting, may prove to be a setback in future rounds.

Always know how much you’re planning to raise. Usually, this amount is calculated by calculating the burn rate and cash runway before the next round of funding (which is generally 12 to 18 months later).



Relying On One Source

If you’re a new entrepreneur, you should know that once you move ahead of your seed round, there’s usually more than one investor who invest in your startup. 

One investor usually leads the round, but it witnesses a few who follow the lead.

So, you need to make a list of a lot of investors, reach out to them, and segregate them into group A, group B, and group C; where group A is highly likely to invest in your company and is someone you would like to work with. Group B and C consists of investors who are less likely to invest.

Usually, it’s better to have more than one investors interested in your startup as it puts more pressure on them.

Substandard Pitch Decks

A prominent mistake entrepreneurs make is by not focusing much on the pitch deck. While many dream of millions as an investment, they don’t put much effort in the pitch deck to prove the need.

It would help if you understood the difference between an email deck and a presentation deck. Learn how to develop both and when to use what.

Email decks are text-heavy as you’re usually not there to present the same. So, you have to predict the questions that might arise and answer then using data in the email deck.


Presentation decks, on the other hand, should supplement your presentations. They should be graphics-heavy.

But whatever you do, make sure to spend some time in developing a good-looking, polished pitch deck that reassure the investors that you are serious about the partnership and know what you’re doing.


Relying On Cold Emails

Sending the same email to a list of investors could be the worst mistake you can do. Fundraising isn’t a usual business process where you’ll get replies to your cold emails.

You need to do your homework and reach out to the investors using a channel they respond to. Most of the investors prefer recommendations from their partners or the founders of startups they’ve already invested in. Try to contact them first.

And even if you do rely on email. Make sure to do your research and write a personalised email tailored to the requirements of the investor.

Non-Familiarity With Term Sheets

Term-sheets are facts of external fundraising. The problem with the entrepreneurs is that they rely heavily on lawyers without even knowing the intricacies of what’s been agreed upon.

Even if you don’t want to get into the details, you should know the basic of term sheet. It usually has two sections – the economics and the ownership. It includes the extent to which an investor will be participating in the decision-making process and how much will he get upon the liquidation of the company, along with other terms.

Read books, talk to consultants, and learn as much as you can about the term sheet before you go for fundraising and signing such documents.


Not Focusing On Personal Branding And Selling

When it comes to startups, the investors weigh the experience and the brand of the team members along with other factors. You may not want the investors to doubt your capabilities.

So avoid this common mistake of not selling your team. Sell their qualifications, experience, and the skillset. If you can’t add the same to a slide, find ways to portray or showcase the same and impress the investors.

No Planning

Fundraising is a task that one should take only with a proper plan. You should not wander around thinking you’ll find a way to the perfect investor.

Make a plan. Decide what type of investor do you need to woo at what stage of your startup. Reaching out to wrong investors at wrong time may not only waste your time but may also close your gates to that investor in future as well.

If you’re looking for seed funding, go to incubators, accelerators, or angel investors. If you’re looking for late-stage funding, go to experienced venture capitalists. Make a plan and stick to it.



Focusing Just On Money

One of the biggest misconceptions new entrepreneurs have is that fundraising is all about money.

Never make this mistake.

Business and startup investments are partnerships. This is when investors show faith in you, mentor you, and provide you with the resources, both monetary and non-monetary to help you grow.

So, make sure to look for more than just money. Look for investors who have experience in the niche you operate in. Look for investors who have a good network that you can use to grow your business. And look for investors who have more than just money to give.

Go On, Tell Us What You Think!

Did we miss something? Come on! Tell us what you think about our article on fundraising mistakes in the comments section.

Feedough

Fundraising Thursdays – A Forum to Ask About Fundraising, Investors, Accelerators, and Other Sources of Capital

Welcome to this week’s Fundraising Thursdays Thread.

Ask about anything related to fundraising, investors, accelerators, grants, and other sources of capital.

That includes how to find these sources, how to work with them, and how to negotiate with them.

Don’t be shy. The purpose of this is to learn and share ideas and methodologies with one another.

Any question is a good question!

If you are answering questions, remember to be kind and supportive. Many are just starting out and have no idea what they are doing. That’s okay! We all knew nothing before we knew something.

You can also find more support using instant chat on the /r/startups discord.

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Startups – Rapid Growth and Innovation is in Our Very Nature!

Berlin-based Neufund, a blockchain-enabled fundraising platform, secures €4 million and seeks a financial license

Neufund, a fintech startup that connects innovative companies seeking capital with progressive investors, today announces €4 million of funding led by Atlantic Labs and Udo Schloemer (founder and CEO of Factory Berlin), with additional funds coming from Freigeist Capital and Dario Suter (founder and managing director of DCM). The new round extends the company’s previous…

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EU-Startups