Having had a strong and confident corporate background working with large blue chips, raising money and securing investment in the corporate world was second nature to me. I had raised as much as £86m at one point in my career, all I needed to raise for my own startup venture was £100,000 – how hard could it be?
Harder than you could ever imagine: as an entrepreneur just starting out, I hadn’t realised just how challenging and difficult it would be to raise money for your own business. I guess I just assumed it would be a breeze.
After all, I had a great idea and a great business model that would turn a profit – what’s not to like? Of course, what I hadn’t anticipated was the cultural differences of securing funding as a startup in contrast to raising funds as an employee of a well-established business.
Raising money in the corporate world is non-emotional, there’s usually a set criteria, and you have the security of a fully functioning business to fall back on. But as a startup things couldn’t be more different.
For starters, I need to go to an angel investor and hope that they liked my idea, liked me and had the cash available to invest. What you have to understand is that most of these potential investors don’t know you from Adam and while you might be the best salesperson in the universe, you might not deliver. So, there is a fair amount of risk on the investors’ part. Let’s just say you have to be prepared to kiss a lot of frogs before you find your prince of investors.
Mixing friendship with business: awkward
Someone suggested ask your friends to invest in your venture. That was the last thing I wanted to do, but it turned out to be the one thing I simply had to do; and it was awkward with a capital ‘A’.
Some weren’t interested for the simple reason that they didn’t want to mix business with friendship. But I was very driven; I had to be. I had invested our pension pot and more in my business and after much determination and focus the rest came from friends. Without those friends, it wouldn’t have happened; at least not at that point.
By March 2015 (one year later), with a fully operational business underway, I felt better equipped to approach angel investors for my next round of funding. Although I secured the required funds via that route, I learned some very valuable and unexpected lessons along the way.
It’s not us; it’s you
If you’re going to secure investment, people have to believe in you. Forget every conversation you ever had at the startup point of your business, times have changed and your business has evolved. You may well be pretty confident in your own presentation skills, you know your business model is sound, but don’t assume everyone else knows that.
'We assumed you were another mum with a lifestyle choice business.' Pardon? That was one of the initial reactions I experienced from would-be investors.
You need to look at how you are presenting to would-be investors and you need to understand what they are looking for. One thing I learned was that no matter how confident you are, until you are stood up there in front of a potential investor you cannot judge how they will react.
People will make assumptions about you in the first two seconds of meeting you, before you’ve even opened your mouth to speak. So, as well as learning to sell professionally you also need to listen, take feedback on-board and adapt. For instance, I learned from listening to feedback that I was leaving potentially vital information towards the end of my presentation, at which point the investor might have already made up their mind.
Women in business (arrrrgh!)
An irrelevant and condescending phrase in my opinion, but that is an entirely different debate. The very real cultural differences of being a female entrepreneur was something I wasn’t as prepared for. Sexism in the workplace doesn’t exist anymore, does it?
I had come from a corporate background and I’d done quite well for myself. I was never held back due to my gender in terms of promotion and achievement, and my male work colleagues treated me equally, so I wasn’t expecting the cultural shock that came next.
“We assumed you were ‘another mum’ with a ‘lifestyle’ choice business.” Pardon? That was one of the initial reactions I experienced from would-be investors. It’s true that I’m a mum; there was also a bit of ‘pink’ on my presentation and my business targets a largely female audience, but why is that relevant? I had of course, left the slide about my professional credentials, background and career towards the end of my presentation, at which point the investors looked surprised – perhaps they had misjudged me?
Like it or not, assumptions were made about me personally that would have an impact on how I was being perceived and indeed whether I would get the investment I wanted.
I soon discovered that there are many misconceptions in the so-called mums in business world. Some women make no secret that their new business venture is about gaining greater flexibility and work life balance (and I’ve no issue with that), but it isn’t the case for every woman who also happens to be a parent.
I had left the slide about my professional credentials, background and career towards the end of my presentation, at which point the investors looked surprised – perhaps they had misjudged me?
I was working full-time, my business was very much a serious venture and investment opportunity and there was no work-life balance to speak of. I’d worked my socks off, I had less time at home with my family that I ever did working in the corporate world. Yet I was being categorised before I’d even started.
I didn’t like it, but I had to adapt to overcome this investment barrier if I wanted my business to become a success. I immediately sought to appoint a mixed group of advisors for my business (made up of both men and women) and things started to change for the better. Attending pitches with male and female board members meant I was taken more seriously by the investment community, my role as a parent suddenly seemed less relevant and I started to get the results I wanted for the business financially.
How I’ve changed
Being a female entrepreneur has been a huge learning curve for me. I’ve learned to be more humble and less arrogant (than I might have once been when I first set out). I’m certainly more optimistic, but burning both ends of the candle, too. Running a business is hard work and flexibility doesn’t come into it, if a job needs doing it means rolling up your sleeves and making it happen.
I’ve also adapted my management style. In my past career I had around 65 people reporting directly to me, so my role was very much the leadership function. Around 90% of my time was spent meeting and managing people but now I find myself in a world of different levels of people with vastly different experience, so naturally my role has evolved to leading and doing as I am much closer to the business.
Pearls of wisdom
If I have any pearls of wisdom for other entrepreneurs starting out and looking for that first bit of investment, I would say be ready. Be ready to be knocked down (probably more than twice), but be prepared to dust yourself off and get back on that funding ladder.
Face facts that around 90% of people aren’t going to like your idea, many of them are going to find fault in it, and some may not believe in you or like you personally. But focus on the 10% opportunity because that is where you will find your investors.
Finally, and probably most importantly, listen, take feedback and adapt, keep a thick skin, never take no for an answer and try, try and try again.