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

    August 20, 2020

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

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

    Posted: 20 Aug 2020 06:05 AM PDT

    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.

    submitted by /u/AutoModerator
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    For a company raising Seed Funding do you need a 30+ page business plan?

    Posted: 19 Aug 2020 09:46 PM PDT

    I am currently raising for a seed round and have heard differing accounts on whether I need a full business plan (30+ page doc). Obviously I need a business model and strategy but is it ok to have that in summary within the pitch deck or is it required to have a huge business plan document as well? Just seems like busy work tbh.

    submitted by /u/KaiokengoKuma
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    How did you price your product?

    Posted: 19 Aug 2020 09:35 AM PDT

    If you have a launched product, could you elaborate on how you priced your product? How did that impact your initial customer acquisition?

    Have you increased/decreased your price afterwards? What was this decision based upon?

    I'm interested in having a general discussion about how you researched and arrived your current price, no matter the pricing model that you use.

    submitted by /u/IAmMirch
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    Where can I find co founders?

    Posted: 19 Aug 2020 10:34 PM PDT

    I have an idea for a startup but I'm still in high school and haven't made any connections yet. The idea would require a very technical co founder/s to develop a website with a front and back end since I know nothing about that (I'm more of a finance guy). Where can I find like minded individuals that are willing to help me with my idea? Do I have to go on like some silicon valley forums or something lol? In all seriousness this is something I'm really passionate about and I have a lot of questions.

    submitted by /u/GGReaperrr
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    WTF is Growth? The (Unfortunate) Evolution of The Growth Team & How to Do It Right!

    Posted: 20 Aug 2020 03:20 AM PDT

    https://aleph.vc/the-unfortunate-evolution-of-the-growth-team-273aa914ba1b

    The growth team was Facebook's secret weapon, with Zuck calling it "their greatest invention". Over the years since, many startups have adopted the team with various success. So WTF is it and how do you do it right?

    submitted by /u/ilovebunnieslikealot
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    How I started a business with $0 in quarantine and scaled to over 25k in MRR in 60 days

    Posted: 20 Aug 2020 06:01 AM PDT

    Hi everyone! I have been working feverishly on getting my business started over the past 2 months and we have grown much faster than I originally anticipated so I wanted to share my story, thought process, and how I grew it with you all here -- hopefully someone can find value in this or the motivation to keep pushing. Some of the conditions that apply to my business may not apply to those of you reading this however the concepts/ plans/ methods that I am going to share with you in this post are almost universally applicable. I am going to focus primarily on how I generated demand, quantified that demand, and ultimately closed that demand.

    As I was originally thinking about launching this business, I had a few things to consider:

    1. I was working a very demanding and time-consuming consulting job that would not be thrilled to hear that I was planning to leave soon to start my own company so I had to be discreet and efficient with my time
    2. We were in the middle of a pandemic
    3. Because we are living through a pandemic and everything is so uncertain, I wanted the business to completely fund itself -- i.e. I did not want to invest/ risk any capital into growing the business until I had already acquired the customers needed to fund my growth.

    #3 may not totally apply for a lot of you folks out there reading this, but for a little context, the reason this is possible for me is because my business is totally svc based -- I don't need to develop software, purchase inventory, etc -- the product is me, my team, and the methods we use. The business is a sales outsourcing and consulting firm.

    High level, I viewed this operation as a total of 4 steps, the first of which was to develop my plan. I am going to skip over how exactly I decided to position and price my services, but in terms of developing a plan to acquire customers here is how I approached it:

    1. Develop my plan: Normally here you would want to build your sales model -- what does your sales process look like and what are the conversion metrics at each stage? If you do not have this information, you need to make a hypothesis and use it as your benchmark as you launch. Once you have your hypothesis, decide what your closed-won goal is for the month/ quarter/ year, then use these benchmark conversion metrics to determine how many intro calls (or whatever the first step of your sales process is) you need. Divide the total number at each stage that you will need for the given time period by the total investment for that time period to get your estimated "cost per metrics." These are your projected "unit economics" and are vital to making sure you are acquiring leads or customers at each stage of the sales funnel in a cost-effective way -- simply put: if the cost to acquire your customer is greater than the value of that customer, your business doesn't work. Many entrepreneurs skip this part of the process, fail, and don't understand why… For my specific case, I had two different sales processes that I wanted to test so I built out two hypotheses, started booking meetings with prospects, placing them 50/50 into each version of my sales process and tracked which one was more effective. To illustrate how this can be done, here is a random example of what something like this might look like:

    ​

    Investment $15,000
    Systems Costs $0
    Paid Costs $0
    ACV $30,000
    SALs needed (mo.) 24
    CPSAL $625
    SAL:SQL rate 90%
    SQLs needed (mo.) 21.6
    CPSQL $694
    SQL to Opp rate 50%
    Opps needed (mo.) 10.8
    CPO $1,389
    15X pipeline $225,000
    Close Rate 25%
    Closed Won (mo.) 2.7
    Closed Value (mo.) $81,000
    CAC $5,556

    ​

    Keep in mind these are not my metrics, simply an example -- lmk if you need more info around how this was put together.

    1. Become Demand Productive: Now that I had my plan in place, my focus was exclusively on building a predictable demand machine. The only problem was that I did not want to invest any money into the business yet so I had to use only free channels. Super high level, when you are trying to determine which channels you are going to generate demand from, you have 4 primary options:

    2. Outbound: think typical sales (phone calls, emails, social outreach, etc)

    3. Paid: think fb ads, google ads, etc

    4. Organic: think SEO

    5. Peer to peer: think networking, referrals, etc.

    They all have their pros and cons, but initially, I chose outbound and peer to peer because I could do it for free. I got involved and connected with people on LinkedIn groups, Reddit groups, sent personalized emails to people who I thought would be a good fit, etc, etc. I did everything I could (that was free) and just started talking to people either telling them about my business or listening to the challenges they were encountering to see if there was any way that my business could help them. This part takes some hustle and elbow grease, but it is a necessary part of the process if you want to build something for free initially. Stay up late. Take the extra time to provide someone with value with no expectation of reciprocity, but ask for what you want, and eventually, you will start booking meetings with people. Track all of your activity and conversions with psychopathic discipline -- your data will help you scale quickly. Initially, I used Google Sheets and the free version of Hubspot as my CRM to store prospects and report on my success. Eventually, I got our first paying customer and I immediately invested that revenue back into the business to purchase technology to scale my outbound efforts -- I purchased Hubspot sales professional for sequences, began working with and negotiating rates with different data providers, and purchased LinkedIn automation technology. Because I was utilizing only free channels initially, my unit economics were not as important -- my only investment was sweat equity.

    Side note -- before booking meetings for myself, I worked to qualify people as much as possible. I have some specific criteria that I use to vet people, but in a B2B environment, it all ultimately boils down to BANT qualification. Verifying with the prospect that they:

    1. B (Budget): have the budget to afford my services
    2. A (Authority): they have the decision making power to purchase my services
    3. N (Need): they have a need for my services -- this is the most important aspect of qualification

    4. T (Timeline): they are looking to purchase my services, hopefully NOW, and not the fall of 2021

    5. Become pipeline productive: From here, I needed to consistently be able to take my demand and produce opportunities that have pipeline values associated with them. For me, I defined an opportunity as a prospect who:

    6. Attended the intro call that we booked

    7. Fit all of my BANT criteria

    8. Agreed to next steps (in my case there were 2 different next steps options that I was measuring)

    The biggest piece of advice that I could give someone here in terms of hosting intro calls (and this is solely my opinion) -- the most important component of that intro call is to get your prospect to agree to your upfront contract. If you do not know what this is, google it and create one for your intro calls -- the typical Sandler upfront contract is extremely formal, which I am not a fan of. Keep it conversational, but make sure you clearly address your prospect's needs and get them to agree to discussing whatever it is you would like to discuss at the end of the call, before moving into the actual call. Once again, continue to quantify your success here compared to the model that you built during step 1 and adjust activity or spend at the top of the funnel to reflect any deviations from the hypothesis that might be occurring. I would be cautious not to make any crazy changes too quickly.

    1. Become Financially Productive: Once I had at least 1 closed-won customer, I knew I was financially productive -- the excitement of a closed-won customer can be misleading here depending on the unit economics, and this is why it is so important to track the entire time. You need to compare the actual cost to acquire that customer with the actual value of that customer. If the cost is higher than the value, something in your program needs to change, whether it is the channel you are using to acquire those customers, the cost of your good/ service, your sales process, etc.

    As a broad and generic statement, as long as you are acquiring customers for less than they are worth -- you should have a business! Once you have some data on the success of your actual sales process, the name of the game (and where most businesses struggle) is in generating enough demand to keep your pipeline full of qualified opportunities. Use your sales process conversion metrics to determine the TOFU demand and activity needed to hit your goals for a given time period and work to optimize constantly.

    Hopefully, some of you found this helpful! Looking forward to hearing everyone's thoughts!

    submitted by /u/Mr-BlueSkye
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    How to announce the death of my startup

    Posted: 19 Aug 2020 09:45 PM PDT

    Hello fam!

    So I founded a startup like 8 months ago, and now I believe that I need to shut it down and pursue something else.. thing is, I was consistently posting on linkedin about my startup.. so how should I announce its death without looking like a complete loser?

    submitted by /u/theeliar
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    How to find feedback from UK startup founders that hire remote staff, or get my first customers?

    Posted: 20 Aug 2020 01:10 AM PDT

    Hey guys,

    After being made redundant due to COVID 19 I've been looking for home working jobs in the UK, but having a really hard time and hardly ever hear back from employers.

    So I decided to curate a website of remote roles for UK workers, who want the flexible lifestyle.

    However, I know how damn hard the grind is for startups. So I was wondering if anyone on here would know how to find testers or first customers?

    Or if any of you guys would like to test my website and even try posting a role to try it and let me know what you think😁

    I have over 100 candidates so far from just a few days and this is increasingly growing

    Don't hesitate to send me a message if you wanna try, or if you just wanna chat

    submitted by /u/TomFrankland96
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    Service as a Business Model for CRM Startup?

    Posted: 20 Aug 2020 12:57 AM PDT

    Wanted to get some thoughts on alternative business models from what MailChimp and other Marketing Automations and CRMs do, charging by # of contacts or the amount of emails sent monthly.

    What about providing it as a service business, where the client with 100,000 - 1 mil contacts wants a CRM done for them.

    Is providing it as a service scalable?

    Would TechStars take a startup providing a service as their business model?

    Any examples of startups with this or a similar business model?

    People have told me I should consider doing it as a service instead of building a new software.

    The target market is not using any of the available existing software.

    submitted by /u/askangelofmusic
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    Potential business opportunity in the future - what skills should I improve now?

    Posted: 20 Aug 2020 04:35 AM PDT

    Hi all

    I may have a potential business opportunity in the future, but that is still many months away. Right now where I live, the lockdown is still in effect so we all have to stay at home. This means I have some extra time on my hands, and I was wondering what general skills I can learn that are beneficial to owning a business.

    Basically looking to learn something/put my lockdown free time to good use...what skills can I learn that will be beneficial to owning a business?

    submitted by /u/AliveandDrive
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    Created Prototype, got users/sign-ups... Now what?

    Posted: 19 Aug 2020 06:36 PM PDT

    Hey all,

    I'm a product manager at a very early stage startup. We've created a prototype of our product and have activity on our platform (e-commerce marketplace). CEO and COO are focusing on things like marketing, talking to investors, managing our team, etc...

    Our team is small, so much of our resources are focused on the above mentioned tasks. That leaves me and one part-time dev to work on the product - meaning we won't be making any big changes to the product in the near future.

    I'm trying to think of what I should be working on next. Here is what I think, but just curious to know if I am missing anything crucial:

    • Improving data structure on our platform to obtain more user info
    • Obtaining user feedback to see how we can improve our product
    • Speaking with internal team members, to see what they want added to the platform (to help them do their jobs - eg. marketing)
    • Putting together reports/analytics from data captured on our platform

    • Use all points mentioned above to help navigate/continue creating product roadmap

      Appreciate any feedback and help I can get!

    submitted by /u/tucc21
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    Any founders doing angel investing on the side?

    Posted: 19 Aug 2020 02:22 PM PDT

    Hi all,

    Inspired by @shl, I'm thinking about doing some angel investing on the side. I'm thinking $5-10k per check for 0.5-1% of the company, 1-2 checks a month, plus pro-rata follow-ups. Maybe deploy $250k or so every year.

    I think my unique value add is I have a lot of expertise in cloud technologies, Kubernetes, and dev ops, also experience as a fellow founder.

    I wonder what your experience is like, how much time do you spend sourcing deals, how much help do the companies need etc.?

    submitted by /u/cloudone
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    Is google ads effective for increasing web traffic?

    Posted: 19 Aug 2020 05:00 PM PDT

    I am attempting to increase web traffic to my company, and I was wondering what the best advertising methods were. I have already tried free social media marketing, and I am considering using paid ads. Is google ads the way to go, or are there better/cheaper options?

    submitted by /u/jimmothy_theunicorn
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    How do I bring an idea to life?

    Posted: 19 Aug 2020 11:47 PM PDT

    I am a game design student, this is my third year and I have crazy ideas that I want to bring to life. Some of the ideas I have gone as far as doing hardcore research on similar fields and calculate cost to start it but often get discouraged by the cost (I come from foster so I don't have family to help me financially or anything) and the fact I have no idea how to actually start a business. Let's not mention covid19 at the moment which would be a huge setback since my ideas mainly involve an actual space where people can go for entertainment.

    I know that I must register a business, patent any invention or copyright any content to make sure nobody steals what I'm doing, get funds either by investors, grants, or crowdfunding and set realistic goals. Also be prepared to fail.

    Like where do I look for investors or funds? Cause I feel most grants are for people who like actually have something done because they had the money themselves to invest or family and friends invested and it kind of took off and now they need more funds.

    What qualifies to be patented? For example if the technology is already made and I'm just using it on my own 3D printed model, do I file a patent for it or not because the actual tech already existed I'm just using it.

    Is there any books or articles that you would recommend to read that are relevant to todays economy and all that?

    Like how do you actually go from an idea at home to the actual thing, what moves should I be making to make it possible and happen?

    Any other recommendations are welcome! Thank you for your time.

    submitted by /u/micmartperez
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    Has anyone here started a charity like a 501c

    Posted: 19 Aug 2020 11:44 PM PDT

    I've recently been extended a job offer and while my wife and I will be getting financially set over the next few years (buying a house, having second kid, etc) I wanted to give back to the community, specifically with my skillset of science and education. Does anyone have advice for starting one or is there a good sub for it?

    submitted by /u/Professional_PhD
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    F&F Round - Crowdfunding or nah?

    Posted: 19 Aug 2020 02:29 PM PDT

    We are looking to raise about 100K dollars to help us launch our Alpha and Beta.

    In my past startup, we looked to do a Family & Friends round by just issuing convertible debt and putting each accredited investor on our Cap Table. Each of the investors we talked to were cutting checks of at least 10K, and for that type of money equity was expected in return.

    This time around, we want to lower the bar to allow just about anyone to give money - $50, $500, $5,000 - which means we likely won't be issuing convertible debt.

    With that in mind, we will likely crowdfunding through WeFunder, GoFundMe, or Kickstarter. We've built a matrix to help us determine what's most important for us, as well as any legal or downstream considerations.

    Does anyone here have experience doing what I would call "private crowdfunding" through one of these platforms? i.e. use one of those three platforms to present the idea and ask for money in a consolidated format with no intention of opening it to the public?

    Would love to know any success or horror stories associated with each. And if anyone knows definitively if we're able to keep the link for the crowdfund private, vs opening to public, I'd love to know that as well.

    Thanks!

    submitted by /u/SimplyKlug
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    Needing extra engineers?

    Posted: 19 Aug 2020 08:04 PM PDT

    I and 2 others are building a startup but I am the only one with an engineering background and am currently the only one doing any programming so I've taken on the task of building out the web and mobile apps. However, due to limited time since I work full time and us aiming to have a beta by the end of the year, Ive come to the realization that I won't be able to do both the web and mobile apps since both are required. I could finish the web by end of October but the app will take longer as there is some learning curve with it being new tech. I feel like its a hit to my pride as an engineer to hire a freelancer to help out since I know I can do both if given enough time. Since it's a fitness related app, we want to have it usable by New years since lots of people start back up into fitness. Should I just swallow my pride and hire a contractor to help or should I suggest extending the release date and doing it solely in-house for the beta and then hire on permanent help for the full release?

    submitted by /u/javia1492
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    SaaS startups: How did you handle security compliance/audit? (what companies?, alternatives?)

    Posted: 19 Aug 2020 04:01 PM PDT

    I'm in the early stages of a biotech SaaS service and trying to check all my boxes as I'd like to ultimately move to B2B/enterprise sales where I know clients will have security requirements before moving forward. My background is in software dev so I understand application-level security and how to handle data + credentials in the cloud etc, but things like SOC 2 compliance and cybersecurity audits are a black-box to me in terms of companies and hiring.

    Has anyone personally dealt with hiring or consulting with cybersecurity auditors/companies? If so, it'd be great to hear anything about it (What company did you work with? What costs? Recommended or not? How long into your development did you wait?). And also if you dealt with cybersecurity in a different way.

    For context: I use Stripe for payment processing, AWS for servers and data processing/storage, and handle PI from account info and also private research-data stemming from our biotech focus. I've read you can order SOC reports from both AWS and Stripe, but my understanding is that we still wouldn't be internally compliant from an application-standpoint even by internally following OWASP guidelines.

    submitted by /u/mf_lume
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    Tech startups, do you have experience founding a company, hiring, or getting hired as a visa holder?

    Posted: 19 Aug 2020 01:44 PM PDT

    I just completed my MS in the Bay and am looking for a next gig. My previous startup rejected my request to sponsor my H1B, and most startups don't offer sponsorship. It breaks my heart that so many immigrants come to this country and are denied the opportunity to help build something great just because of their visa status.

    Why do startups do this? Paying for an H1B lawyer is ~$4k, which is not that much of an expense for many. Do you have experience overcoming such challenges? Anything helps!

    submitted by /u/oscillating_cobra
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    Where to find opportunities to help a company with support/success in exchange for getting some help learning programming?

    Posted: 19 Aug 2020 11:59 AM PDT

    I'm wondering if there are any sites/resources out there where I can help early stage startup companies with their customer support needs in exchange for some help learning code in a real company environment?

    I know this probably sounds like a big ask but I feel as if I can really take a lot of some people's plates if they're not yet ready to start making customer support/customer success hires. I have a lot of experience in those fields and also onboarding, training, managing teams, building documentation etc...

    The coding aspect of it is I've been self-teaching for the last year-ish and want to get some hands on experience.

    Thanks!!

    submitted by /u/ComprehensiveDig8
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    Trademarking Question...

    Posted: 19 Aug 2020 11:35 AM PDT

    Hello, I am wanting to trademark a name for my new business. I have done some basic research and there are no other registered TM's using my desired name. However, when I do a google search I do see some products that utilize my name, but the name isn't trademarked to that product. If I successfully trademark the name for my business, do I still face the possibility of some legal issues from the other companies since they were using the name in marketing first? I wouldn't look to make them change their product names if I get the TM, I just don't want to waste time and $$ on a name that could be taken from me once it gains notoriety.

    Thank you so much in advance for any help.

    submitted by /u/ReaperCombatives
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    Interviewing with C-Suite - what should I be looking for?

    Posted: 19 Aug 2020 06:38 PM PDT

    I am approaching final round interviews at series C startup that began in 2012. I'll be interviewing w some C-Suite executives and would come on as employee 100-150.

    I'm 25 and lucky to still be employed and even coming up on promotion this fall at my current job in a prominent F100 company, but hate feeling like another cog in the machine. I've never even seen the C-Suite at my company, so this interview is a bit nerve wracking.

    I've heard in startups people really are close and have a sense of community, which is something I always would've liked - my current boss' motto is "if I do my job well, you should never know I'm here." Which I'm worried I've internalized from a culture POV...but I have made it this far so I guess so somethings working.

    My question is, what are some questions/red flags/considerations as I continue on in the process? And what can I do if and when I join to ensure people like me/am a top performer?

    Im also concerned of course with the uncertainty that comes with moving to a startup and whether it will continue to get funding, be alive in the future, and what it will mean for my career afterwards especially shifting industries. Is that just the nature of startup life? How do you reconcile this? What should I be looking for as I chat with these executives?

    submitted by /u/LibraCuz
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    Is a long-standing LLC an asset or a liability or a non-factor for a startup?

    Posted: 19 Aug 2020 06:13 AM PDT

    I have a delaware series LLC that was set up as an asset holding company which has been in existence for 10+ years. The assets in the LLC have currently been drawn down purposely and are zero. Apart from the length of time the LLC has been in existence, there is no other real value to the LLC. I'm aware of the LLC vs C-corp debate with startups and from what I remember the latter is preferred over a LLC.

    I don't have any immediate business or holding plans for the LLC and it costs me about $500 a year to maintain. I don't live in Delaware and would need to foreign file with my state if I were to use it for anything other than investment holdings.

    Is there any benefit to keeping it open from the # of years in existence? As in, would it improve my business' creditworthiness or trust in the future if I were to do something with it? Would someone look at it and say "you haven't done anything with it for 10+ years, what's the deal?" in which case I should just let it go and spin up a new one if I need it in a few years? Any opinions?

    submitted by /u/drsxr
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    Trying to find discount packages

    Posted: 19 Aug 2020 01:00 PM PDT

    There are several startups with subscription that market discounts on virtually everything. I am sure that these companies did not create the tens of thousands of relationships for all the restaurants, travel, car rentals etc. Where are they partnering with third parties for these? Anyone know?

    submitted by /u/uniquornity
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    What side startups (lean) or mini-SaaS are you running?

    Posted: 19 Aug 2020 04:39 PM PDT

    I'm just curious, what lean things people are running as a side thing.

    I'll start:

    1. Formerly ran a niche traffic tracker, but I have stopped 2 years ago despite profitable from day1. Wasn't yet booming but I could pocket like 500-1k /m extra with zero work, which is some niche change. There was also a market issue that I could not solve then and got me to kill it; but now I know how (had a "duh" moment).I'm restarting it in September. The niche is still there. It can be scaled up to 10-20K/mo based on my current calculations, still lean. From there on, who knows, will see.
    2. Accidentally built a mail filter for in-house purposes this month, that finally solved our 20 years of spam fighting. So I'd be launching this too next (lean approach) as it seems it's a winner.

    ( Also had a stock inventory product but this didn't take off so I discount that, but thought I should mention it. Too complicated to run and especially market, despite being a sophisticated and useful product we use internally. )

    How about you?

    TIA

    submitted by /u/emsai
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