Startups need capital and often raise funds from investors. This requires pitching, numbers, statistics and a story. And the timing has to be right. The key to timing is easy, according to this CEO: fundraising when your confidence is high.
Each week on TechCrunch Live, investors and entrepreneurs share lessons learned from personal experiences. And Front CEO and co-founder Mathilde Collin knows about fundraising. She raised $138 million of venture capital in multiple fundraising rounds, including from Frederic Kerrest, Okta COO and venture capitalist. They spoke on various topics, and the entire TechCrunch Live event is available on YouTube or via a podcast.
Time can make or break a fundraiser, and Collin advises to seek outside investment when you feel good – as you, the founder, feel good. Unfortunately, sometimes this doesn’t correlate with your company numbers.
“Could be you hired someone amazing,” she said. “You just hired a very large client – whatever makes you super confident in the future of this company.”
Why? According to Collin, investors are very good at assessing whether a founder is genuine in their motivations, which revolve around trust and enthusiasm for the company. This means that she always starts presentations with why she is doing something, even if it gets more complicated as she gets bigger.
Upcoming TechCrunch Live Events
Frederic Kerrest agrees, noting as an investor that he wants to spend his time with people who care and are motivated and interested.
Collin says with each increase, she evaluated investors based on the company’s needs. So when the later phase of Front’s Series C arrived, it turned to a number of operators who could provide capital and an insider’s view of the industry and corporate guidance.
The front turned to Sequoia for their Serie B, something Collin says remains useful. However, as her company was growing, she said, she felt the need to “reinvent the wheel. She turned to those she felt were already in a similar situation and could give her guidance. This turned out to be a series of industry leaders like Michael Cannon-Brookes of Atlassian, Eric Yan of Zoom and Jared Smith of Qualtrics – and yes, Frederic Kerrest.
These are all the people Kerrest said with a laugh who get their hands dirty running, building and growing businesses.
“There’s a lot of value you can get from institutional investors,” Kerrest said. “At Okta, we were fortunate to be supported by some well-known companies – Andreessen Horowitz, Sequoia and Greylock. They will bring many nets. They will bring a lot of ideas on how to grow. They will bring a lot of ideas about advisors.”
But there’s more to building a company, Kerrest said. He pointed to building a sales team or when to scale internationally. Like the CEO of a much larger and similar company, operators can help with critical steps.
It also doesn’t get more predictable as the rounds progress. Collin feels the founders are wrong, saying that as the company grows, fundraising becomes more difficult.
“You need to have good reasons to [fundraise],” she said. “I think it’s because the scale of everything you do is bigger; the impact is bigger, if you get it wrong, it has more consequences for your employees, your customers and others. So it definitely doesn’t get any easier.”