A co-working hub led by women for women raises capital from female investors
Raising capital, is such a foreign concept to most of us as we dive in. We hear jargon being thrown around – valuations, convertible notes, dilution, ordinary v preference shares - and in all honesty most of us nod our heads masking our confusion before racing to our trusted friend google or call up actual friends asking for a quick definition and explanation.
Raising capital is hard work.
It’s unknown territory. We often find ourselves learning on the go. It’s full of rejection. And most of us take rejection personally because we are so intrinsically tied to the success or failure of our businesses. It takes us away from the day to day operations but we are still expected to build the business and demonstrate positive upward results.
And guess what… raising capital as a woman-led business is even harder.
Less than 3% of VC funding in the world goes to women-led businesses. And 94% of decision-makers at VC firms are men. Even though we know that women-led startups produce a higher return on investment than their male counterparts, the default for a male founder is “what kind of entrepreneur will he be” whereas for a female founder the default is still “can she be an entrepreneur.”
We need more women to dive into the discomfort of capital raising when their business is ready for it and we need more women to take risks and become investors.
I recently raised capital for the expansion of One Roof. I closed the round in February this year with $1 Million from 5 family offices that are all led by women. Last week i held my first investor meeting and felt proud and honoured to have such an impressive group of individuals sitting around the investor table. The process was challenging on so many levels. It forced me to step into extremely unfamiliar territory. As a solo founder and having never raised capital before the process can be daunting. It encouraged me to think long and hard about the future and my vision of One Roof - how hard I am willing to work and how big I want to dream. And it challenged me to work with my team so that I could step out of the day to day running of the business to focus my time and energy on its future.
While I felt challenged it also came with incredible rewards. I secured funding on fair terms for both myself and my investors, I have a group of investors who care about the mission of One Roof beyond a financial return and I secured investment from 5 high profile and impressive women.
As you can imagine I learnt a lot! Here are a few tips that I hope will help others as they too navigate unchartered territory.
Surround yourself with a tribe of mentors.
I am lucky that I have One Roof and have forged such a valuable network of friends, supporters and mentors. During the entire cap raising process (which took me about 7 months) I lent on so many people for advice and support. Founders gave me their tips and shared their journey with me (the founders of Finch, Healthkit, Flamingo and Quilt gave me so much advice), my lawyers (Luna) were there to support me not just with legal documents and advice but also in the negotiations. They introduced me to someone who helped build my financial model and I worked with a business coach based in the USA for 3 months to support me through the process. At every stage i sort advice and guidance to help me to the next stage. I also did a lot of reading and absorbing of information. I highly recommend signing up to the newsletter Both Sides of The Table for investor insight.
Seek out potential investors who are the right fit
I realised very early on in the journey that I needed to approach the right kind of investors. I knew VC’s wouldn’t consider One Roof because we are not yet a tech company and I really wanted to find potential investors who truly align with the ethos and mission of One Roof. I am not only looking for a return on investment, I want to make a meaningful impact in the world and I needed investors who understood that. And so I didn’t bother pitching to the wrong fit. I created my list of potential investors and asked for introductions and warm referrals. Family offices and private investors were the perfect fit for our business. And I was able to find women investors which is not easy to achieve!
Work hard and always been prepared
I worked tirelessly to prepare for every single meeting. I thought about and role played potential questions that could be asked and I thought through and prepared for every single touch point I had with investors. Even in the lead up to the investor meeting after I had closed the round I prepared and over prepared. It is so important to keep the momentum going, to be prepared to answer any and all questions investors ask and to have detailed documents ready to go if they want to see it. Less information is always better at the start but it’s important to be prepared for detailed questions. It’s valuable to have a data room ready to go, which is really just a dropbox folder of all your important documents including employment agreements, customer agreements, financials, branding and marketing documents etc so that it’s easy for investors to do their due diligence on your company.
Investors want to know why they should invest in you and you want to continue to impress and give them every reason to back you.
You can read more about One Roof’s capital raise in Women’s Agenda.
One Roof is so much more than a co-working space. We create, foster and provide an environment, community and business support ensuring our members have everything they need to succeed under one roof. This includes curated connections to experts and mentors, educational workshops and providing our members with resources and business support to ensure they are investor ready. Sign up to a free trial with us to work from One Roof and access the support you need to grow your business.