Founder Focus: The Prosperous Shop
We asked all of our entrepreneur users to share their funding journeys, for other start-ups to learn about how their peers approach raising capital.
We will be running a series of blogs about these journeys over the coming weeks, today it is with Karen Adams (https://www.linkedin.com/in/karenadamstp) CEO of The Prosperous Shop (http://www.theprosperousshop.com/)
MC: What’s your elevator pitch?
We offer b2b analytics with insights that tell the SME retailer what’s hot, what’s not and what to do about it
MC: When did you start trying to raise your most recent round?
We’ve never really had a ‘start’ date. I’ve been talking to investors since the idea phase
MC: How did you work out which investors you were going to approach?
We’re active/subscribed to a select few sites; Angelist, Match Capital and Angel Investor Network and have been to a few pitch events and networked there.
MC: What documentation did you initially send to your targeted investors? I.e. a one pager?, a short slide deck? a long slide deck?
I always begin with our full slide deck (11 slides)
MC: Was there a typical response from the investors you targeted?
Most investors that I’ve contacted have responded and we tend to get strong support for our product. Very few don’t respond at all.
MC: Have you received any interest from investors and have you had any meetings?
Yes, I’ve had an in depth series of skype calls with an angel investor. We’ve had a team pitch at the offices of a venture capital accountancy firm and I’ve had coffee with the lead investor of an investment network group who also invited me to sit on a panel to hear a pitch at a famous university. We’ve just had an offer of investment from a Canadian investor.
MC: What common questions have you been asked by investors?
The most common questions would be;
Who is your target audience
How are you different from ‘X’
Where are you at in your development
What interest/traction have you had?
What’s the current equity structure?
MC: Is there anything you wish you hadn’t said in an investor meeting?
Nope. I’m quite deliberate in meetings. I don’t say things without thinking first. I did tell one investor off in a meeting for being rude to my team. I knew it probably cost me the deal, but he realised and apologised. If you don’t have principles, you don’t have anything. My team are loyal and supportive and I hated to see them being disrespected.
MC: What do you wish you had said, that you didn’t say?
In one particular meeting, I was prepared to answer, but I wasn’t prepared to lead and yes, I was asked to lead the meeting with whatever I wanted to say. I was floored. I had only prepared to be the sitting duck.
MC: In your opinion, what are the “no-nos” worth bearing in mind when talking to investors?
Don’t’ be desperate, know where your deal breaks.There has to be a point at which it won’t work for you. Investors are people. Entrepreneurs give them their investment opportunities. You are not powerless so don’t be totally in awe and forget who you are.
MC: Have you got any advice for other entrepreneurs who are preparing for an investor meeting?
If you don’t have a naturally photographic memory, get one. Memorise. Know your stuff.
MC: Have you raised anything so far as a result of your efforts?
We have been put out to one angel investor network by an angel investor.
We have interest from a second investor group who want to fund us to market and follow our progress. We want to go a bit further off our own bat.
In the past few days, we’ve had an offer of investment – a small round that will get our product into the hands of the 124 businesses who have signed up to trial our beta.
MC: What’s the biggest challenge you’ve faced along the way?
Professionally; We’re b2b and our application was a mammoth build. Over £200k worth. Getting that built in exchange for equity has been the biggest challenge and took a while. But we’ve done it.
Personally; Being a female founder and single Mum has been insanely stressful at times, but at the same time, has taught me how to be frugal, how to elongate cash flow and how to have a happy flourishing child as well as a flourishing start-up.
Uncertainty is a killer. Living in constant hope and faith in the face of repeated set-backs can be unbearable at times and good friends are the antidote.
MC: What’s your overall view on the UK funding market? Tough? Easy? Over-hyped?
Definitely over-hyped and non-friendly on the whole. I think the atmosphere in the UK is one of risk aversion. ‘Startup’ is an industry and there are so many competitions and beauty parades. Never been my thing. I’d rather sit in a room and be grilled by a few hard nosed, quietly spoken, serious investors.
MC: Any last tips?
Be prepared to suffer. Don’t give up. Be nice to people. Pray.