We had done well in building relationships with key players in the startup scene in Austin and received a lot of great advice and feedback. We knew exactly why we wanted to join an accelerator and what we wanted to get out of it. I think this is very important when and if you decide to do so. 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 Div Inc would keep us focused. We chose to concentrate on fundraising, product, and revenue (market fit) within the 12 weeks.
Fundraising — Do You Really Need It?
I think this 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 the 12 weeks learning about the landscape and how best to approach it. Most people hate fundraising and I don’t blame them.
You have to be ok with rejection — lots of it!
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 my enemy initially. I fought it as much as I could but knew I needed to do it in order to graduate from my accelerator. What I didn’t expect was how practicing to pitch to the general public would force me to become better at understanding my 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 I’m 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! I was speaking with the CTO of MagRabbit and we were talking about whether funding or other accelerators were needed and he said,
“The market doesn’t care.” — Aaron Hodinh
I thought this was one the most accurate portrayal 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 (of course you should still be building relationships). Obviously this is just the mindset of our company and that everyone will have a different approach. It boils down to what makes most sense for you and your company?