How to approach your first fundraise as a founder — with Stephane Roux, co-founder of Wonder
We had the chance to speak to Stephane Roux, Co-Founder of video conferencing platform Wonder. Wonder has raised €1.2 million in seed funding from BlueYard Capital. He gave us insights on how to approach fundraising if you are raising for the first time and his key insights looking back after a successful round. Enjoy the interview!
(The views expressed in this interview are solely his own and do not necessarily represent the views of wonder.)
Stephane, this was the first time that you were raising funds from institutional investors. How did you approach the process?
First, we agreed on certain parameters of the fundraise within the founding team, like the amount of capital needed, our valuation target etc. We then levered our network: We met with people who already completed fundraises successfully and asked for advice. There is also a lot of good content online, e.g. on the Y Combinator Blog or in Brad Feld’s classic book “Venture Deals”. The guidance in this book turned out to be very practical. Once we had our story line and deck prepared, we reached out to contacts that are well connected within the startup and investor community and asked for introductions.
What are some of the key takeaways from your fundraising process?
Firstly, practicing the pitch is important. Many potential hick-ups in the pitching process are avoidable if you practice it. Be prepared to answer the predictable questions, have your computer and camera properly set up for video pitches, etc. Secondly, you will continuously get feedback during your fundraising process so it can make sense to sequence your meetings and adjust your pitch based on new feedback. And thirdly, having a well thought-through story and sticking to it is crucial. Don’t give in to the temptation to fit a narrative that one single investor would like to put you in just to advance the conversation. I would also add: focus your pitch on your strengths, because that’s how you convince your investors.
Do you have any particular advice for first-time fundraisers?
I would be very aware that the fundraising funnel doesn’t narrow at the beginning but at the end. If you are getting a lot of initial meetings and calls and have investors wanting to talk to you, that’s a good sign — but the real work only starts after their initial interest. If an investor takes a number of meetings with you, this does not mean that the probability of an investment is necessarily very high, and he can still drop out late in the funnel. Also, be aware that fundraising is a very time-consuming process for all founders. Even if you are not the main person responsible for fundraising, it will require your attention. Prepare well for this period and set up the processes in your company accordingly.
How was it to navigate the term sheet discussion phase the first time as a founder? Any key takeaways?
I think it’s important to have a strong trust relationship with your investors. Both sides should not see the investment as a one-off transaction but as the beginning of a long-term relationship. In our case, we were super lucky with our investors. The term sheet creation process was very collaborative. We could talk about everything openly and ask questions if we wanted to understand parts of the terms better.
Finally, any tips on how to create a buzz around your startup without coming off as try-hard? I’ve seen you do that quite successfully.
There are a number of things that some people do to create a sense of urgency among investors, like answering emails late or giving the impression that you are in talks with other VCs. But we intentionally never wanted to play “hard to get”. We think this can also back-fire quickly. Instead, we focused on letting our initial traction and our product speak for themselves — for instance by using our video conferencing tool for holding our investor pitches.
Stephane, thank you very much for this conversation!
Wonder is an innovative video conferencing tool that enables users to create their own chat rooms in a virtual environment. The software is used by organizations such as Harvard University, McKinsey or Deloitte. Wonder has recently raised €1.2 million in seed funding from BlueYard Capital.