Optimising for survival vs valaution
During my previous startup journey My Dream Store we grew from 3cr annualRevenue to 30cr annual Revenue in 24 months and we were on look out for series A of 5Mn usd , Talked to almost every VC in town by that time we have only raise an angel round of 300k usd only.
Everything was green we were super ambitious , stayed in market for 3 months could not close . During this time there were few Angel groups who could write 500k to 1mn cheques but we thought it would be too small for our ambitions.
We went back to building again - our growth began to drop and became flattish at 2cr monthly revenue , we went back to market to raise 2Mn after 1yr to market to a different set of VCs - very hard to raise on back of degrowth, we were willing to dilute more but yes could not close.
Lesson learnt always raise when you are going to peak in the next 3-6 months. As founders we would be focused on growth during that cycle but it’s better to put more money in war chest.
Back to story one more year passed on flattish growth, we did some working capital solves , cut expenses we de grew to 1.5cr monthly revenue .
Was again out in market this time looking for Angels founder angels or syndicates to raise 500k to 2Mn to build back.
I was almost on verge of giving up but then Sujayath Ali wrote a small cheque gave us hope to rethink and started building Nobero. Only a founder can truly understand the grit and struggle.
Now Nobero is a rocket ship we are super excited along side strong partner like TMRW House of Brands .
From my journey of fundraising failures here are something’s that other founders / people who want to start can pick up
1. Always raise when you are on the raise
2. Do not be finicky about valuation pick best of what you are getting and go back to building
3. Like you see in my essay I moved down from 5Mn to 2Mn to 500k , very foolish . In hindsight had I picked the 500k to 1Mn cheque when we were at 30cr the story would have been totally different . Pick whatever you can at best price you can close fast. The art is to close deal fast and move from position to position strongly on back of good metrics
4. Small cheques get large cheques , you are no longer alone in journey. It’s in interest of all parties to protect org and do what is right for org to grow
5. Fundraising is sales , be very strategic of what you offer -if you are degrowing offer a larger share, create phased offers milestone led - 500k to x size and if I hit X follow on with 2Mn if I do not grow to X be willing to take more hit on equity. Always offer what others cannot
6. Have some founders on your cap table who have been part of these , it’s millions saved
#fundraising #startup #lessonsbuildingnobero
