How to Successfully Fundraise as a Non-tech Founder
Hi everyone, welcome! Today's topic is "How to Fundraise When You're Not a Tech Pro". This is inspired by my own experiences as a non-technical CEO in the tech industry. I'm Sarah Chung, the CEO of Landing International, a tech startup in the beauty space. We have created a mobile training app for beauty advisors in retail. After years of fundraising ventures, I'd like to share some tips, challenges, and solutions we've encountered on our journey.
Backstory: Not a Typical Tech Journey
I started by bootstrapping my company to profitability in its initial years and then delved into the world of fundraising. It wasn't an easy journey, but we managed to close a $1.6 million seed round last year. Today, we have VCs contacting us regularly and recently earned a spot on the list of the most innovative companies 2022 for Beauty.
Despite these considerable achievements, the journey of fundraising wasn't without challenges, particularly being a woman and a non-tech founder in the tech industry.
Challenges Women Face When Fundraising
While the percentage of women-founded companies that receive VC funding has risen from a meager 2% to somewhere between 8-10%, it's still a significant disparity. Some of the challenges include an inherent bias, with most investors being men, often showing implicit preference for investing in male entrepreneurs. Furthermore, the investor culture often revolves around male-orientated activities, and the use of language which is not inclusive towards women.
How Can Women Successfully Fundraise?
Fundraising Coaching
Fundraisers need to be familiar with the investor's work and what they're potentially looking for. This includes their investment criteria, areas of interest, check size, stages of fundraising they participate in, and the stage of their fund. It's crucial to align your company with their interests for successful fundraising.
Understanding Your Business Fundamentals
Knowing the main numbers and metrics of your business is key. This includes gross revenue, net revenue growth rate, customer acquisition cost, annual recurring revenue, etc. It's also important to communicate what the investor's investment would mean for them, not just for you.
Building Your Founder Story
Having a strong narrative about your work and life experience leading up to your startup is vital. Express why you are uniquely positioned to seize this opportunity, considering market research data, surveys, and other supportive information.
Leverage Your Background
Tap into your industry or category expertise and explain why you are the right fit for this product. If you're not a technical founder, drive the business requirements of your product, be familiar with the basics of your tech stack, and live your product.
Mistakes and Learnings
Some common mistakes include treating all investors the same, placing too much emphasis on each investor, and prioritizing accuracy over narrative during pitch meetings. Key learning points include understanding how to cut to the chase with numbers, preparing for due diligence, learning your talking points, and ensuring you stick to them.
To sum up, for non-tech founders, the fundraising journey may seem daunting. But by understanding the landscape, focusing on relevant data, leveraging unique attributes, and proactively addressing biases, you can successfully fundraise for your startup.