A Product Market Fit Show | Startup Podcast for Founders
00:03:42 · Chaz Englander, Pablo Srugo
[00:03:42] S0: For sure. For sure. And like, we didn't take any of it for granted either. That definitely made our journey easier for sure. I mean, for what we needed to do, needed to raise a bit of money, know, made a lot of those things easier. I'd say that one of the things that we don't talk about enough was like, you know, between starting and getting on YC, we raised a million pounds. And that was like straight scrappiness. I remember we actually raised two rounds, a £100,000 round and then a a million pound round. And that first £100,000 round, I figured out that it was just like a numbers game. I was like, look, to go out this full time, I'm happy to... Was living off like, you know, £1,300 a month. I was like, to go this full time, I'm just gonna need to scrap and it's gonna be a numbers game. So I kind of figured I was like, look, where is money in London? It's a lot of it is like financial services centric. You know, a lot of those companies are based in Canary Wharf down there. I'm just gonna go down there and I'm just gonna hit people up on LinkedIn. And I mean, looking back on that, I was like pitching for like a grand at a time, like genuinely. [00:04:45] S1: No way.
00:04:45 · Pablo Srugo, Chaz Englander
[00:04:45] S1: No way. [00:04:46] S0: $2 here and there. And I do like 10 pictures of this like to everyone else is like a ridiculous idea as well. Was like, yeah, you're gonna lend out your items to people nearby and you're gonna be okay with that, strangers, you know? So I do like 10 pictures and pick up a couple of grand here and there, the but numbers add up, and then we got a... Got to a $100, and then before you know it, like, we... We're in a position where I could leave my other job and call down at full time. [00:05:10] S1: This is an interesting tangent to go down because obviously raising the first round is always a big deal. And, you know, once you have a track record and stuff, frankly, gets a lot easier. But when you don't, like, in that time, it's... It is not easy at all. How did you even get those, you know, 10 meetings a day? You gotta get 10 meetings a day. It's one thing to do them. It's hard work, but getting them is like a dark side sort of thing. Like, how did you get those meetings every day and and kinda have that volume?
00:05:31 · Chaz Englander
[00:05:31] S0: Well I should say for explaining that as well, right, I do think the playbook in the context of AI has changed drastically. I'll park that a little bit, we can come back to that. But to answer your question, I really believe that first round as a first time founder, if that's something you even need to do anymore, These really small rounds that used to happen a lot more, it's a numbers game. It's a pure numbers game. And for a whole bunch of reasons, need to learn how to pitch, the only way to learn is to fail and fail quickly. Reps. Yeah. So I was, know, hitting people up on LinkedIn and maxing my messages and ads like every single day. Right? Like every day. And the thing is the conversion rate would be tidy. Right? You'd probably have to like connect with a 100 and then maybe message all a 100 and get 10 responses to maybe get one meeting, but it compounds. So I think like the thing that I thought looking back on it that was really useful is although that overall, let's call it a million pounds if that's what it was, I can't remember exactly, probably only five, 10% of that came direct from those LinkedIn messages I was sending. The other 90% was indirectly, almost entirely through that, right? Because, you know, at the end of the day, if you're meeting one person, you're not meeting just them, you're meeting everyone else that they know. And I always said that to myself. And that's how I ended up compounding. We had one or two quite lucky intros, or say lucky it was a numbers game, so maybe it was just statistical significance, I don't know.
00:06:54 · Pablo Srugo, Chaz Englander
[00:06:54] S1: Did you do the comment like especially that early on, oh, I'm student, wanted your advice, etcetera, or was it like very direct like, hey, I'm fundraising? [00:07:02] S0: I was very direct. You know, I think in that first message, the big part of it is credibility. So I think like, how can you in that first three or four words get some level of credibility? Is it a name drop? Maybe it's where you studied if you studied somewhere great. [00:07:18] S1: Do you remember what you did? What was your kind of credibility tagline? [00:07:21] S0: There was a couple of people that I approached and I asked whether they would be advisors. So I was like, hey, can you just help me out? And they themselves were like quite reputable. I think in the first line I said something along the lines of like, hey, I've started this new company, already got advisors from Airbnb and whatever and Uber, know, this is what we do, keen to chat, you know. No one should ever like say they're raising money and so far they've raised zero. Yes. It sounds obvious, but like I would advise like not to do that ever, right? In other words like no matter what, if you are raising, the rounds pretty much already done. That's narrative. [00:08:05] S1: Yes. Yes. [00:08:06] S0: I'll explain the reality of this but like no one wants to be that first check. So that first check is gonna come from an ally or someone that you know. Right? And so they're the ones gonna take the leap of faith. But, yeah, you always wanna be on the tail end.
00:08:06 · Chaz Englander, Pablo Srugo
[00:08:06] S0: I'll explain the reality of this but like no one wants to be that first check. So that first check is gonna come from an ally or someone that you know. Right? And so they're the ones gonna take the leap of faith. But, yeah, you always wanna be on the tail end. [00:08:19] S1: I actually did it by accident because we thought we needed only like 200 k, and then we thought we needed only 500 k. But the effect of it was we always almost done because it was like, oh, we got a 100 k out of 200, so we're 50%. And then they were like, you know, we're gonna need more money. Well, you know what? We got 300 out of 500. And so you always got that momentum going. [00:08:36] S0: That's what people should do. Is whatever their first check is in the round, just say your total round is that plus like 20. [00:08:44] S1: Yes. And the other thing you mentioned there that I think is really important is, you know, bootstrapping is known as like, you know, you don't raise any money. But I think there's an element in bootstrapping, whether you go VC or not, which is how do you do the little thing? You have this goal of raising a million, and you're like, that seems insurmountable. Okay. Well, maybe raising a 100 k is easier to this point. Maybe raising any money is too hard, but maybe getting an adviser is not that hard. And then getting an adviser can lead to those meetings, lead to the... So it's like boot, like these little things that then get you to that big thing. Right? You gotta break it down.
00:08:44 · Pablo Srugo, Chaz Englander
[00:08:44] S1: Yes. And the other thing you mentioned there that I think is really important is, you know, bootstrapping is known as like, you know, you don't raise any money. But I think there's an element in bootstrapping, whether you go VC or not, which is how do you do the little thing? You have this goal of raising a million, and you're like, that seems insurmountable. Okay. Well, maybe raising a 100 k is easier to this point. Maybe raising any money is too hard, but maybe getting an adviser is not that hard. And then getting an adviser can lead to those meetings, lead to the... So it's like boot, like these little things that then get you to that big thing. Right? You gotta break it down. [00:09:13] S0: Everything compounds, first of all. So like, everything seems like a really steep hill. Right? But it's like anything, you know, to get to your first, I don't know, even a 100 k in ARR when your first eye might seem huge, but when you're there, to get to like a million maybe doesn't seem that far, you know? And and I think like anything it's these little cassettes. I think the big thing is consistency. And the second thing, we mentioned Arnd and I when we did this YC interview, that's on YouTube, perseverance. So like, I think there is a big difference between blind perseverance. But if something like makes sense and you know it makes sense and you're not kidding yourself, I mean, you just gotta go at that with that all guns blazing.