Lessons Learnt Raising Our Million Dollar Seed Round

Over the last two months I've had the incredible privilege of being in San Francisco putting together a seed round for Sqwiggle with my co-founders, Matt and Eric. Incase you haven't come across it, Sqwiggle is a tool for distributed and remote teams to communicate better - we want to make remote working truly great.

Looking back, I can't even really remember the moment that we decided to raise funding. We kicked around the idea since day one and had discussed on many occasions. In the end, we came to a consensus: with a little more money we could grow much faster and it would really help with the larger technical hurdles we were facing. Within a day I had a flight booked to the U.S. and began reaching out to potential investors and contacts.

It's been crazy and exciting - for all of us this was the first time we had been actively involved in raising funding. We had so much to learn! Here are some of the unexpected lessons learned:

Find Your Ambassador

If I had one key takeaway it would be to find a single, well-connected person that can be your ambassador and help you get meetings with other investors through solid intros.

In our case this person turned out to be Naval. My co-founder, Matt, reached out through a cold email and not only did he reply (amazing in itself!), but in what was definitely a turning point he also invited us down to the office, immediately understood the value of Sqwiggle and decided to invest almost immediately.

Selling the Product

Over a couple of evenings I read Derek Sivers' book "Anything You Want". One quote stuck out to me - when you have a great product "all doors will open". He found that a lot of previous ideas were like pushing a rock up a hill, but with CDBaby everything just seemed to be so much easier.

I definitely felt this on several occasions, where we stayed fairly quiet and potential investors started considering Sqwiggle, the many uses, expansion, enterprise possibilities and before I knew it they were onboard. Sometimes the right idea at the right time really can sell itself.

The Founder Story

One piece of feedback we got often is that at the seed stage it's all about the founder story, so make sure it's compelling. At Sqwiggle our experiences of remote working came from many different angles and this helped us build a compelling narrative on how we all came across the problem separately and came together to fix it.

Every company has a story behind how and why it was formed, how you came together and your experience in the vertical. It's important to figure out yours and make sure that you're just as good at selling yourselves as the product.

Everything Stops

I heard this statement many times before we started fundraising but didn't realize how true it really was. Once you pack your schedule with intros and meetings, there isn't time for anything else. The small amount of downtime is often consumed mentally and physically recovering.

AngelList

There is no denying, trending on AngelList really is a golden ticket! I won't go into how to achieve this, mainly because I don't have a clue - but also because others have already done it better. We were trending for around two weeks and during that time had 55 intros and many offers to invest online through the platform. I can't even begin to stress how valuable this turned out to be.

VC's Aren't What I Thought

There are many different types of people that work for Venture Capital firms and they can't all be tarred with the same brush. Some partners come with decades of experience, others are serial entrepreneurs and each takes a different angle and will offer completely different value to your company.

I went into the process with a skewed negative view of VC's (possibly from startup blogs?) but came out with four Venture Capital firms as investors.

Metrics and Numbers

Be careful and consistent with numbers that you decide to give out. In general, don't be afraid to say that you don't know a particular figure (this isn't Shark Tank). We put together a pack of metrics updated once a week or so that we would send to investors when they asked. Regardless, most investors are more focused on the team and core idea rather than fine-grained metrics at seed stage.

Beer and Wine

After meeting with a potential investor that we all agreed we didn't get the right vibe from we settled on the rough idea of a "beer rule". Which essentially meant that the person had to feel like someone we could grab a beer with, perhaps to lay down the current company problems and brainstorm ideas. Not everyone falls into this category - and I found it a great way to filter out those that didn't fit with our vision.

Keep Fuelled

On an average week whilst we were fundraising I walked over 115,000 steps (or 48miles!) according to FitBit. I also ended up skipping meals, but this definitely isn't advisable - if a hearty breakfast was ever appropriate, this is the time. GetAround also proved to be a saviour for many last minute trips to Palo Alto because you just can't walk everywhere!

Did you recently raise funding? I'd love to hear your story or how your experience differed in the comments.