Startups need capital and often raise money from investors. This requires pitching, numbers, statistics and a story. And the time has to be right. The key to timing, according to this CEO, is simple: raise funds when your confidence is high.
Every week, investors and entrepreneurs on MovieUpdates Live share lessons from personal experiences. And Front CEO and co-founder Mathilde Collin knows about fundraising. She raised $138 million from venture capital through several fundraising rounds, including from Frederic Kerrest, Okta’s COO and venture capitalist. They talked about a variety of topics and the entire MovieUpdates Live event is available on YouTube or via a podcast.
Timing can make or break a fundraiser, and Collin recommends looking for outside investments if you’re feeling good — like you, the founder, feel good. Unfortunately, this sometimes doesn’t match your company’s numbers.
“You may have hired a great person,” she said. “You just signed a really big client – which also gives you super confidence in the future of this company.”
Why? According to Collin, investors are very good at assessing whether a founder is genuine in his motivation, which revolves around trust and excitement for the company. This means she always starts presentations with why she’s doing something, even if it gets more complicated as it scales.
MovieUpdates Live Upcoming Events
Frederic Kerrest agrees, noting that as an investor he wants to spend his time with people who care about him, are motivated and interested.
Collin says that every time she raises money, she evaluates investors based on the company’s needs. When it came to Front’s later Series C, she turned to several operators who could provide capital and an insider’s view of the industry and business guidance.
Front turned to Sequoia for his Series B, something Collin says is still helpful. But as her business grew, she said, she felt the need to “reinvent the wheel.” She turned to those who she believed had been in a similar situation before and who could offer her advice. This turned out to be a series of industry leaders such as Atlassian’s Michael Cannon-Brookes, Eric Yan of Zoom, and Qualtrics’ Jared Smith—and yes, Frederic Kerrest.
These are all people Kerrest said with a laugh that get their hands dirty running, building and growing businesses.
“There’s a lot of great value you can get from institutional investors,” Kerrest said. “At Okta, we were lucky enough to be supported by some well-known companies – Andreessen Horowitz, Sequoia and Greylock. They will bring a lot of networking. They will bring a lot of ideas on how to grow. They will bring a lot of ideas to advisors.”
But there’s more to building a business, Kerrest said. He pointed to setting up a sales force or scaling up internationally. Like the CEO of a much larger, comparable company, operators can assist with critical steps.
And it doesn’t get more predictable as the rounds go on either. Collin thinks the founders are wrong and says that as the company grows, fundraising becomes more difficult.
“You must 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 screw it up it has more consequences for your employees, your customers and others. So it definitely gets easier. not on.”