Introduction
In a recent fireside chat, Nick Telson, co-founder of Trumpet, and Paul Lehair, a partner at Albion VC, shared valuable insights on the journey from bootstrapping to securing VC funding. With Trumpet recently raising $6 million in a round led by Albion, this discussion delved into their experiences, the fundraising process, and advice for founders.
This blog post is an AI-generated summary of the video (excluding the Q&A), with just enough human touch so that it doesn't sound entirely robotic. It makes for a great summary if you don't have time to watch the video.
Meet the Founders: Nick Telson and Trumpet
Trumpet, co-founded by Nick, aims to revolutionize the sales process by creating personalized microsites for collaborative spaces between salespeople and buyers. Previously, Nick was the co-founder of Design My Night, a nightlife discovery and bookings platform that was successfully bootstrapped to a significant scale before being sold. With his wealth of entrepreneurial experience, Nick brings a unique perspective to Trumpet and the world of startup funding.
The Genesis of Trumpet
Trumpet was conceived during the COVID-19 pandemic when Nick and his co-founders, having exited Design My Night, identified a gap in the sales tech space. While CRM tools like HubSpot and outreach tools like LinkedIn Navigator exist, the transaction process relied heavily on outdated technologies like emails and PDFs. Trumpet aims to address this by offering a modern, unified platform for deal-making.
Fundraising Journey: From Bootstrapping to VC
Unlike Design My Night, which was primarily bootstrapped, Trumpet opted for VC funding early on. Recognizing a global opportunity and the need to define a new category, the founders decided VC investment was necessary to gain the necessary firepower. They successfully raised a pre-seed round of $1.8 million based on product designs and market interest, followed by a $6 million seed round led by Albion.
Navigating Pre-Seed and Seed Rounds
Nick emphasized treating fundraising as a sales process, building a pipeline of potential investors similarly to how one would manage sales leads. For pre-seed, persistence and nurturing relationships with VCs, even those who initially declined, proved vital. When moving to seed, prior connections paid off, leading to multiple term sheets.
Understanding Your Business Goals
For founders, it's crucial to have a clear understanding of their business goals post-investment. Nick advises against the notion that VC backing is the only path to success. Founders should assess whether they want to build a unicorn or aim for a more modest, yet personally fulfilling and financially rewarding exit, aligning their fundraising strategy accordingly.
Approaching Investors: Strategies for Success
While warm introductions to investors are ideal, Nick encourages founders to network through portfolio companies and personalize outreach efforts. Researching and tailoring communication to demonstrate fit and sincerity can make cold emails effective. Short, concise messages with attached decks are more likely to gain attention from busy VCs.
The Importance of Building Excitement and Momentum
Creating excitement around a startup is key to generating investor interest. By actively discussing Trumpet online, Nick attracted inbound interest, leading to investment offers. He advises founders not to fear idea theft and instead focus on execution to stand out.
Creating FOMO in Fundraising
Fear of missing out (FOMO) remains a powerful tool in fundraising, with VCs responding well to the perception of momentum and competition. Nick shared his tactics for generating excitement, including strategic communications with potential investors to convey progress and urgency in the funding process.
The Value of Angels vs. VCs
Nick highlighted the benefits of having both angel and VC investors. Angels can offer personal support and connections without the pressure for exponential returns, while VCs can provide resources and expertise. Choosing the right partners involves evaluating the value they bring beyond capital.
Transitioning from Bootstrapping to VC Funding
Transitioning from a bootstrap mindset to handling VC funding involves balancing frugality with strategic investment. While careful spending remains essential, access to VC funds allows for experimentation and scaling. Ultimately, building a sustainable and profitable business remains a priority amidst the growth aspirations.
Conclusion
Nick Telson and Paul Lehair's conversation offers a comprehensive guide for founders navigating the shift from bootstrapping to VC funding. Their insights provide valuable lessons on the importance of strategic planning, relationship-building, and maintaining a clear vision for business growth. Whether you're considering VC funding or exploring alternative paths, their advice is grounded in real-world experience and success.
Q & A
Watch the video to gain more insights from the Q & A
