10 Tips For Raising Investment (How Afrocenchix Secured Google Funding in $1.2m Seed Round)
Scaling a startup is tough. It’s been a great year for Afrocenchix, but an incredibly difficult one. Raising a seed round was certainly a case of succeeding against the odds. I’m writing this to share the tips that helped us do it.
When we opened the round we’d never have thought we’d be backed by Google and named one of the “hottest Black-led startups in Europe.” It hasn’t been easy, but we’re proud of what we achieved. Our $1.2m seed round attracted top tier angels (including WeTransfer founder, Nalden and Black Girl Fest founder Nicole Crentsil) as well as mission driven VCs (including BACKED, Cornerstone Partners and lead investors, Impact X.)
Sifted covered the story on some of the difficulties we faced, so I won’t dwell on hardships. It’s enough to say that under 0.03% of UK VC money goes to Black women… and we felt this. Huge chunks of the VC ecosystem stagnate with pattern matching, ego and FOMO.
We can’t overcome questionable decision making, prejudice and discrimination overnight, but by sharing our story I hope to make it easier for people to get past the barriers we faced. Being candid about our Pre-Seed journey helped others, even though it was unconventional, so let’s go again.
Here are 10 startup investment raising tips we learnt the hard way:
- Continually revise your deck — we had a good 15 different versions of our pitch deck. Every time we thought it was done, someone would point out another omission or things would progress and charts would need updating. Set time aside to review it regularly throughout the round.
- Seek feedback from multiple sources — as the proverb goes, many advisors make victory sure. The more input you get, the more clearly you can identify common threads. When we ask for a lot of advice, we benefit from the wisdom of crowds.
- Get your data room in order — we used the same checklist as we did for our first round, but added folders on our tech strategy & market intelligence. If we were asked a good question during or after a pitch, I would answer it in a deck and add it to the data room to pre-empt other investors. (Using Beautiful.ai for my decks meant they took no longer to put together than a well written email.)
- Make a list of top choice investors — using Trello for our lists made it easy to track progress. We wanted warm intros, so we checked Twitter & LinkedIn for mutuals, then sent intro requests including a mini pitch to make it super easy to simply forward on. When emailing investors for the first time, we included a mini bio, let them know why we wanted to partner with them specifically, stated a clear ask and gave several options for meeting dates.
- Don’t do it alone, speak to other founders — other founders are not your competition. You can open doors for them and still flourish, they may even open doors for you. Join start up groups like YSYS, The Stack World & Google 4 Startups. Once you’re in, be open about the journey. You’ll need others who get the struggle. Seek the support you need and pay it forward.
- Get feedback on your pitch — your pitch will continually improve for the first month or so, then will largely remain the same until you close. Be open to feedback. Look for office hours with VCs and Angels and practice your pitch with those that don’t invest in your vertical to take the pressure off (you never know, you may wow them enough that they offer a cheque anyway!)
- Brief your team, and family, so they know what to expect — You’ll be busier than ever and you’ll need their support. I did this far too late into the process and it’s a big regret. When you explain that you’re raising investment, break down the terms. Let them know why you’re raising and what it means for them. Tell your spouse/partner/kids/parents what you’re doing and why. On the tough days they’ll remind you why it matters that you persevere.
- Put processes, automations & people in place so the day to day runs smoothly — Whether you grow your team or outsource, make sure you have the resources in place to sustain your sales whilst you raise. We were told by several investors that they were impressed we managed to keep sales up whilst raising, this isn’t what they usually see. It took us over 7 months to close our round, if our sales weren’t growing we would have struggled. Not having enough cash to operate would have made us tempted take money from those who were rude, racist and misogynistic. If you sustain growth whilst you raise, you can secure a higher valuation.
- Have paperwork ready to close — another mistake we made was not having all our closing paperwork ready immediately, this lost us a few cheques. Work with good lawyers and accountants who come highly recommended, they’re worth what they charge.
- Celebrate with your team once you close — raising investment can be a huge strain on founders, their families and the whole startup team. I was too exhausted after we closed to do a proper celebration, but we raised a glass and had some treats and we’ve got a fun social planned for the end of this month to celebrate!
More news on the round:
Google Backs Afrocenchix In $1.2m Seed Round!
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UCL supported startup receives $1.2m in seed funding from Google
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"There was an assumption that we must not be that intelligent" - one Black founder's experience
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