There is an art to the capital raising process as we learned at the Franklin Dinner on Monday the 13th of November.
21 Female Founders nestled into a cosy and intimate setting at Trunk restaurant in Melbourne's CBD for a 3 course dinner. The Franklin Dinner, co-hosted by One Roof & Melbourne Accelerator Program (MAP) was designed as an invite-only opportunity to connect like-minded female founders and to engage in a frank and insightful conversation about a particular topic that is relevant to founders and startups.
At this dinner we focused on capital raising. Every woman in the room had either been through the process (whether successfully or unsuccessfully), is currently going through the process or is thinking about it.
We heard from two guest speakers.
Kate Morris, Founder and CEO of Adore Beauty, started Australia’s first beauty e-commerce site in 1999 from a garage in Melbourne at the age of 21. Starting with just $12,000 and two little known cosmetic companies on board, Adore Beauty has since grown to more than 160 brands, 12,000 products, and hundreds of thousands of customers.
Kerri Lee Sinclair is a successful founder having sold her startup to Microsoft in 2007 and now works as the Chief Investment Office: Technology and Innovation for the Kin Group family office. Kerri Lee is a Founding Member of Springboard Enterprises Australia, a non for profit that runs a successful accelerator program focused on accelerating high growth women-led tech companies. Kerri Lee has a strong passion for supporting female founders and is a mentor and advisor to many Australian startups.
With Chatham House rules in place we were able to have a very honest conversation which took many different twists and turns.
We discussed the realities of the capital raising process. It always takes longer than expected (often a 6 month process) and will undoubtedly take you away from the core of your business. So you need to be prepared for this kind of distraction.
Planning, preparation and strategy are paramount. So many people go into the process with their eyes closed. it's imperative to know why you want investment and who your ideal investors are. There is no value in pitching to everyone and anyone you meet. Men have pitched to Scale Investors even though Scale is an angel investor network that invests in women-led businesses. Learn from these mistakes. Know who you are pitching to and why.
Do you get along with your potential investor to the point that you can enjoy going for a drink with them? Does your potential investor truly understand the industry and market you are in? What does the potential investor bring to the table beyond $$? These are important questions to ask.
We delved into the different types of investors and investment opportunities comparing venture capitalists to family offices and corporate funding. There were lots of different opinions and experiences to share on this topic.
Do you want someone to lead the round? We discussed the benefits of having an investor lead the round but we also recognised the challenges, particularly in Australia, of finding that lead investor.
A strong supporter that is, literally someone sitting by your side in the negotiations, seemed to be a great tip from those who had been through the process. Kate Morris had her lawyer at every single negotiation with her and she found this invaluable. Who can support you (particularly if you are a solo founder)? A board of advisors can be really helpful in this process.
You wont be pitching to many, if any, female investors.
There is no doubt the process of raising capital is challenging for everyone and has added challenges as a female founder.
Females tend to downplay their achievements and the success of their businesses whereas males tend to overvalue themselves and their businesses.
These are just some of the realities but every single woman at that dinner is paving the way to make it easier for other women. There was such a buzz in the room, important connections were made and at the end of the night no-one wanted to leave.
A clear sign of the success of the night.
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