We were able to build great relationships with key players in the startup scene in Austin and received a lot of great advice and feedback. Yet we knew exactly why we wanted to join an accelerator and what we wanted to get out of it. We wanted to have mentors who knew what was happening with Homads on a weekly, if not daily, basis as their feedback will be much more specific. We also knew the structure of DivInc would keep us focused. Our team chose to concentrate on fundraising, product, and revenue (market fit) within the 12 weeks.
Fundraising — Do You Really Need It?
This question is rarely asked by startup founders and commonly asked by investors. I think it’s easy for founders to believe that you have to join an accelerator and get funded to be considered a successful business. As with any socially constructed concept, many processes are thought as mandatory when it’s followed by the mainstream. A good example is when people go to college because it’s the next step, but they don’t ask themselves why they want the education and ultimately graduate with no goal or plan in mind. I tend to think of accelerators as schools for startups and fundraising as your first big job. There’s no sense in participating if you don’t know what you want or need. Funding should be used to scale your business, not to pay you to learn whether you need to scale or how.
Once we decided that we eventually would need outside funding, we spent our time learning about the landscape and how best to approach it. Most people hate fundraising, and I don’t blame them.
I’ve found that, whether openly discussed or not, a lot of fundraising has to do with perception and understanding how to create the most favorable image of your company and yourself. Of course, you have to back it up with the right numbers and actually have a viable product, but the other part is making sure you understand how to explain the market and pitch your business.
Pitching was our enemy initially. We fought it as much as we could, but knew we needed to do it in order to graduate from the accelerator. What I didn’t expect was how practicing to pitch to the general public would force us to become better at understanding the market, and how best to appeal to each person. There is definitely an art to pitching, and the sooner you understand this, the better of a position you’ll be in to raise money.
Another takeaway from the program was understanding what it means to be a first-time entrepreneur. Everything was new to us, so it took us longer to understand everything we’re mentioning now. It’s definitely worth it to jump in and learn, but you should also understand that it’ll likely take you twice as long (a scary thought for investors)!
Work On Your Business
This should be common sense but it’s easy for this idea to escape us with all the glitz and glam of the tech world! We were speaking with Aaron Hodinh, CTO of MagRabbit, about whether funding or other accelerators were needed, and he said, “The market doesn’t care.”
We thought this was one of the most accurate portrayals and most valuable takeaway that we had from the last 12 weeks. You can join as many accelerators and raise millions of dollars, but in the end, it’s about your customers and your market that matters.
Since joining DivInc, we’ve made an immense amount of progress and have aggressively increased our user acquisition rate through our go to market strategy. With this in mind, we know exactly what it is that we need to do this year to build a sustainable and successful business. When the time comes for us to scale, but we do not have the funds from revenue to do so as quickly as we’d like, that is the moment to start thinking about fundraising. Obviously, this is just the mindset of our company as everyone will have a different approach. At the end of the day, it boils down to what makes the most sense for you and your company.
Written by the Homads team.