Archives for the month of: September, 2015

I used to naively believe that building a funding round was easy. You only have to develop a great idea, that addresses a large and growing market and investors will follow. Well it isn’t quite like that. In fact, even an awesome team with a great proposition will struggle to find funding for a tech startup. The competition for capital is incredibly strong and investors are naturally hedging their bets by spreading their investment across multiple opportunities. Many investors will not invest unless someone else takes the lead and there are not enough experienced tech investors to go around.  Here are a few pointers to make it simpler to build a round;

Make sure you are ready - There is little point in building your funding round until you are ready. Readiness depends greatly on the amount of funding you are looking for. However, at each stage it is important to have hit certain milestones. It is also crucial to be able to communicate your proposition clearly and demonstrate why it is attractive to investors. Generally, founders raise before they are ready. This extends the time taken to close and damages reputation.

Think strategically and tactically - Plan for a long and complicated process from the beginning. If you are raising a few hundred K from angels you will need to find multiple investors and orchestrate the whole process. It can be a bit like herding cats. You both need to be able to plan the process at a high level as well as acting tactically and decisively at each stage. Allow plenty of time in your schedule to undertake the process effectively.

Target appropriate Investors – Select investors that are interested in your market sector and invest at the stage you have reached. VCs will often state that they invest early, when they don’t. It can still be worth taking half a dozen VC meetings to ascertain what you need to do to be attractive in a years time. This will strengthen your pitch for the angel round. Don’t ask for investment at these meetings. You will look naive. Best ask for advice and listen to what they are looking for.

Find a lead investor early - The lead investor is usually the king-pin for every funding round. In the angel round they will provide the core to build around. It can sometimes be worth bringing in a lead as part of a small pre-seed round. They can help you shape the next round and make sure you are investment ready.

Expect the lead to take an active role - Once the seed round has been launched you will need the support of your lead investor. They can set the term sheet and rally their friends to help fill the round. They can also reassure non-savvy investors that the round is worth joining.

find other investors - Once you have a strong lead investor you will need to spread the net more widely. It is important to learn the difference between real investors and tire kickers. Check linked-in carefully and bluntly ask about their capacity to invest.

Find ways to close the round effectively - It is good to set deadlines and create momentum leading up to them. There needs to be an end point. Ask the lead to help bring the other investors into line and deal with formalities such as term sheets and other legal requirements. Appoint a good lawyer who understands the size of deal you are trying to close.

Think imaginatively - We are seeing more rounds that include angels, micro-VCs, VCs and even crowdfunding. It can even be possible to build rounds with UK lead investors and back filled by US or other overseas investors. In almost every case they demand a good lead.

More mature companies can afford to pay the fees of corporate finance experts to help build rounds and do the necessary deal-making. However, Startups cannot entertain the upfront fees they charge to do this. Platforms such as Dreamstake are making it more cost effective to use a third party to support the process by back-loading the costs and linking them to performance.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every month.

 

London is lucky. Twice a year we have London Fashion Week – several days of intense fashion buzz filled with shows, events, models and fashionistas. You can follow up on the latest from well known British fashion pioneers, such as Burberry and Vivienne Westwood or discover the new emerging designers that london fashion scene always has to offer.  Moreover, plenty of different fashion tech events are organised during this time of the year, because London is the perfect place for fashion to be disrupted by technology talent.

This time Startup Weekend was also dedicated to Fashion Technology. It was my first time mentoring at the event, but I fell in love from first sight. SW is a great option for tech ‘wantrepreneurs’ wishing to form a team, get right into the heart of a typical startup experience and learn the basics of how to build a tech venture.  A dozen startup teams were created during this weekend with tech solutions trying to address the current issues:

  1. Virtual fitting. DressMe team were betting that up and coming 3d scanning technology will be the solution for reduced return rates. Their software can let users scan 3d images of themselves for more accurate measurements.
  2. Personal Styling. Stylementor team created the online solution for personal stylists on demand. You can potentially get access to a database of personal stylists, who will give you advice for an affordable price.
  3. Men Fashion. Understanding how male consumers shop and what makes them buy clothes online is always an exciting subject. Swipe team created the tinder – type prototype, that suppose to help by not only suggesting new  clothes  but also to match them with the current existing wardrobe.
  4. Fashion events. Wouldn’t it be great to have all the fashion shows and events at one place? Fashmap think so, so they created the prototype for Yplan of fashion events.
  5. New materials. The Minx team are trying to bring the dry fit material to mass markets by creating fashionable men shirts for everyday wear.
  6. Shipping. Many startups are out there, who are addressing the problem of fast shipping. Envoi team came up with the unique business model of free one day shipping from selected stores. ‘Browse today, wear tonight!’
  7. Customisation. Custmiz team are planning to create the white- label technology for designers and online shops to let customers create their own designs. The young and ambitious team from France have already found their first clients to pay for their future technology.
  8. Recommendations. Advice on what suits you is always useful! Although Canvas team struggled a bit with their business model, I found their idea about crowdsourced recommendations with the gamification element pretty exciting!
  9. Emerging designers. There were a couple of ambitious and strong teams, such as Wecreate who tried to address the problem of giving exposure to new fashion talent. However, Mode For Me seemed to get it right. With their already made prototype and traction, they grabbed the hearts of jury and became the finalists of the Global Fashion Battle.

Mode for Me is the “kickstarter” for emerging designers, where backers get designer products as a reward. The idea is to allow customers to buy original designer clothing and accessories directly from the producers at high street prices. If users like a designer’s item, they commit to buying it prior to production. As long as there is sufficient demand for a certain style, it goes into production.

Startup Weekend is a non-profit event, full of ambitious and committed entrepreneurs from all over Europe. It is definitely of great value and worth of your time if you seriously consider to be a part of a startup.

This post is written by Marina Atarova – the co-founder of Dreamstake, the funding platform for early stage tech startups. I am mentoring and blogging about tech entrepreneurs. I also run Dreamstake Academy - free workshops, that will take place on  29.10 - Sign up to get updates!

Now the summer is over and Dreamstake is ready to work alongside with the rest of London startup scene.. Last week was very busy and I had a chance to attend the pitching days of two of London’s pretty promising accelerators: Entrepreneurs First and MassChallenge.

Entrepreneurs First is run by Matt Clifford and Alice Bentinck. They particularly focus on involving and supporting strong founders, who will participate in a 6- months program to build teams, hone their product and improve marketing.  EF have nurtured quite impressive startups since their start in 2013. Their alumni’s have raised over $50m and some been valued at over $100m. I ‘ve been following them since a couple of years and it seemed to me that this time the EF Demo Day had double the attendance with a bit more more mature projects, that include:

StackHut allows anyone to deploy code in any programming language without worrying about spinning up new servers or scaling their system. Their strong team incl. an YC alumni and a serial entrepreneur as well as an Oxford PHD in Tech. They already have a great MVP, used by plenty of devs and startups.

Fluently helps people to find the perfect translator for content, without the hassle of dealing with an agency. This is a two-peeps team with an 11-years experienced translator and a prize winning computer scientist. They’ve launched their beta 6 weeks ago and made thousands in revenues already.

Chattermill makes customer experience easy to digest data for businesses. No more trawling through spreadsheets! You can now get customer feedback instantly and understand how your customers feel. And it’s all done by a team of two with strong marketing and tech background from top tier UK universities. They are currently doubling their customer growth and revenue by each month.

Status Today helps companies detect abnormal behaviour and prevent leaks of sensitive or proprietary information. Their team has a  strong knowledge in cyber security and big data protection and created a unique algorithm, that has already convinced some impressive companies to commit to becoming future clients.

Soapbox aims to find the way for beauty video bloggers to monetise their content. It connects viewers with the products that they see in vlogs so that they can buy them instantly. Their team consists of two female founders with excellent experience in pr, beauty and video blogging plus a CTO from Cambridge university with a strong startup background. They already have have contracts with 200 content creators under their belt.

PassFort makes Know Your Customer (KYC) compliance a 30 second process, reducing the amount of information that needs to be collected. The founders are two talented entrepreneurs with technical and business background in regulated markets, who have already negotiated partnerships with the UK largest identity data suppliers and regulated institutions.

Dara Technologies is my personal favourite. They are creating an interactive storytelling experience combining it with games and augmented reality! Using this app, Kids become the storyteller and personalise and interact with 3D animated characters. They have just created their first story Time Tub Twins and have more than hundred families, supporting their crowdfunding campaigns. Their strong team has experience in 3D modelling , creative app development, illustrations and publishing.

Innersight has developed a machine aided technique for surgeons to visualise cancer and improve surgery outcomes. They allow surgeons to generate 3D models directly from their patients 2D scans to plan the operation before and save as much healthy tissue as possible. They have started a clinical trial with the Royal Free Hospital and are building their product alongside 11 leading surgeons. They have also won an INNovate UK grant. They have a really strong team with experience in clinical software and medical imaging algorithms.

Automata is giving robotics its iPhone moment. They have created a robotic arm called Eva that allows anyone to build automation solutions from scratch. Their cofounders met 6 years ago at the computation and design research group at Zaha Hadid. They already have a lot of excited customers, pre-ordering.

Last week I also had a chance to hear 1minute pitches of the 90 finalists from the impressive MassChallenge accelerator! The energy and organisation was great and although it was hard to judge propositions with just 1-minute pitches, it was quite satisfying to see some really exciting startups out there. Dreamstake is currently working with a handful of their projects right now. These are really worth checking out. Watch this space to find out more about them in the future blogs.

This post is written by Marina Atarova – the co-founder of Dreamstake and HoxtechAngels. I am mentoring and blogging about tech entrepreneurs. I also run Dreamstake Academy – free workshops for startups. Wanna know more ? Follow me on twitter @atarova.