Tech start-ups need to ‘hold hands’ with investors before getting into bed with them.
That is the view of Manchester-based entrepreneur Anastasia Kenyon, who was one of nine panellists to speak at BusinessCloud’s ‘Secrets of how to get tech funding’ breakfast event.
Kenyon is the chief executive of Lifestyler, a ‘LinkedIn’ for makeup artists which was established by Love Home Swap CEO Debbie Wosskow and Hearst Group CEO Anna Jones.
She began her entrepreneurial journey at the age of 24 with the launch of Palette, which was acquired by Wosskow and Jones and subsequently merged with their own business.
“I have met with so many investors over the last 18 months one thing I’ve realised is that it is a long-term relationship and before you get into bed with them, you’re better off holding their hands and coming to grips with exactly what they want from the relationship and how you both see it working together in the future,” she said.
“My relationship with Debbie and Anna Jones was easy as we all hold similar characteristics and have a similar drive so I knew instantly that our relationship would only grow.”
Kenyon admits that her perception of funding is “quite different to others”.
“I have gone through all the different channels including angel investment, using an agency to source funding as well as looking into crowdfunding,” she said.
Left to right: Hiring Hub’s Simon Swan, Twine chief executive Stuart Logan, Digital Next CEO Justin Blackhurst and Onedox CEO David Sheridan
“When people receive a big chunk of funding, many seem to sit back and feel comforted by the cash injection. I take a different approach, when you gain investment – that’s someone else’s cash, it’s been trusted to you and it’s so important to ensure that it’s spent to the best of abilities.
“I’ve become quite savvy with a budget and like to think I’ll always be scrappy and stretch a budget as far as possible. The idea is to keep costs down and turnover high at the end of the day, so why begin a journey with someone else’s money with a different mindset?”
Daniel Burton, chief executive of intelligent home start-up Wondrwall, echoes a similar sentiment.
“A lot of tech companies are too focused on raising investment and I have a different view,” he told BusinessCloud.
“I would do all I can to build a proof of concept, go to market and find customers that are prepared to give you a letter of intent or place an order and then look for funding. This puts you in a lot better position.”
David Sheridan, chief executive and co-founder of household bills management dashboard Onedox, told the audience that he and co-founders Hugh Nimmo-Smith and Richard Lewis deliberately delayed taking on external investment.
“We made a conscious decision before starting out to bootstrap the business, to be able to demonstrate meaningful traction and then look to raise money with more robust proof points than would otherwise have been the case,” he explained.
“Especially in the current, more conservative UK investment climate, it’s important to be able to demonstrate traction and what you’ve achieved on a limited budget, in order to provide greater confidence as to your efficiency and that you won’t burn through investment.”