Why timing is critical to your raise
Earlier this year, Ansarada raised $24m in a Series A funding round, led by Ellerston Capital. It was the company’s first external capital raise since a $1.4 million injection in 2008.
With over a decade of experience facilitating transactions, we were well placed to put our insights into action and achieve a successful raise. But we still had some learning to do.
According to CEO, Sam Riley, one of the biggest mistakes we made was not paying enough attention to the timing of the deal. “We were ready to close on December 20th, then got hit with the Christmas break and suddenly everyone had disappeared,” said Sam. “It dragged on and put the deal at risk.”
Looking at the bigger picture
Thinking more broadly, beyond the calendar year, the timing of your raise needs to be carefully considered in the context of the market landscape.
Laurie Yoler, Board Member and Strategic Advisor at Zoox, spoke recently at Blackbird Venture’s Sunrise Island event in Sydney. She shared her experience working closely with two similar disruptive tech companies, Zoox and Tesla.
Yoler said that when Tesla was trying to get their automated vehicles off the ground back in 2003, the world wasn’t ready for electric vehicles. Actual feedback included, “the American consumer will never care about energy efficient cars. Energy efficiency is only of interest to Birkenstock-wearing hippies from Berkeley.”
In 2015, Zoox was able to get their first round of funding to execute on their vision; imagining and building ‘what comes after the car’.
With the problem clearly evident – that the model of individually owned automobiles is fundamentally broken – Zoox set out to create a new model. They were able to succeed at many things simultaneously – from vehicle development and industrial design, to advanced software, safety and more. They were able to innovate alongside the regulator at an early stage to create autonomous vehicle guidelines in the US and ensure that they were the safest possible. And today’s market is ready to take the journey alongside them.
VCs today are more open to disruptive tech
Traditional VCs would agree on a category to invest in, then pick the best one out of a few competitors. In today’s financing market, there is no category yet. The new breed of VC has to like the founder, strongly believe in their vision and take a risk.
“If your vision is compelling, you can attract the best people in the world,” said Yoler. Having a big mission and a bold idea of how to get there is critical. You need to be able to choose who you want investment from, and not beg for funds. If you can’t do that, the timing probably isn’t right for your company.
If you’ve got a raise on the horizon, get the best possible head start with more tips and actionable advice. Download our capital raising guide here.
Zoox is one of the exciting Australian tech startups featured in our latest Indicators report. Download it here.