“Every ‘No’ earns your way to a ‘Yes’” 5 Lessons I Can Share About My Series A Venture Financing Round
I had the pleasure of interviewing Ellie Symes, co-founder and CEO of The Bee Corp., an Indiana-based benefit corporation. The company addresses food security issues across the nation by commercializing sensors that monitor honeybee hive health. Symes earned her Masters of Public Affairs in Information Systems from Indiana University in Bloomington, Indiana and was recently awarded a TechPoint Mira Award for Rising Star of the Year.
Jean: Thank you so much for doing this with us! What is your “backstory” of how you become involved in the Startup space.
I started this company while I was at Indiana University for the first year of my masters program. In undergrad at Indiana University, my cofounders (Simon Kuntz and Wyatt Wells) and I started the Beekeeping Club in 2014 with a $3,000 research grant from the Hutton Honors College. The club’s first event drew over 50 attendees, and by the end of the semester the we had generated over 300 members. I was invited to come speak at the IU Foundation’s (IUF) Fall Board meeting, where three board members pulled me aside and challenged me to expand my vision beyond IU. I wasn’t on a career path to become a startup tech entrepreneur, but I was passionate about solving honeybee decline and was interested in exploring how tech could be used to create practical solutions for beekeepers. We came back to the IUF board members two weeks later with a rough business model, and we decided on our business structure and name that day. We ended up winning the Indiana University Building Entrepreneurs in Science and Technology (BEST) Competition in February 2016, earning an initial investment of $100,000. Since the competition, we raised a Series A Round in 2017 and received several grants, including a $225,000 National Science Foundation SBIR grant.
Jean: What do you think makes your company stand out? Can you share a story?
Several things! We’re a women-led benefit corporation started by university students. However, I think the main thing that intrigues people is that we’re applying technology to beehives, a unique space for a tech startup. When I meet people and they ask me what I do, I rarely get disinterested one-word responses.
My favorite thing about our company is that we started because we were passionate about something — we figured out the model and our target, and let the product come organically. When we met with those IU Foundation Board members for the first time, we didn’t know whether we wanted to be a non-profit or business. A lawyer at the meeting brought up benefit corporations as an interesting hybrid model. This resonated so well with the mission we are pursuing and the values we hold. We like to say we are doing well by doing good. Right after we decided to be a benefit corporation, Milt, one of the Board members said, “Well, let’s be The Bee Corp and a b corp!”
Jean: Are you working on any exciting projects now?
Always! We are in the middle of our National Science Foundation (NSF) SBIR Phase I grant, which is for developing new solutions to combat the problem of declining bee populations. Through this grant we discovered almond growers are also interested in bee health information, since honeybees are an essential input to their operation. We are working on a solution that can help them track this information to ensure they are getting effective pollination.
Jean: Do you have a favorite book that made a deep impact on your life? Can you share a story?
Some of my favorite reads are biographies. They inspire me and help me break down how an accomplished individual got to where they are today. The summer before grad school I read Mountains Beyond Mountains, which is about Paul Farmer and his work curing tuberculosis in Haiti, Peru, and Russia. There were a couple quotes that have stayed with me: (from Margaret Mead) “never underestimate the ability of a small group of individuals to change the world. Indeed, they are the only ones who ever have.” Our startup team is small compared to thousands of other companies in the U.S., but we never underestimate ourselves when setting goals for this company. I also think the VC and angel investors embody this quote by investing in small teams like us working in high risk areas.
Later in the book, Farmer himself says “I don’t care if we lost, I’m gonna try to do the right thing.” We think about our company the same way. We are not blind to the realities of the low success rate of startups, but we don’t focus on it. We focus on doing great work every day, and the impact our work has on the problem. This is why values are so important to have, because the “game” we play and the “rules” that govern it could all change, but we don’t want to lose ourselves in the process.
Jean: What are your “5 Lessons I Can Share About My Series A Venture Financing Round” and why? Please share a story or example for each.
1) Be yourself.
It is very important to be authentic in front of investors. Don’t try and put on an act or emulate someone you saw on Shark Tank, because the investor is there to invest in you and the business you created. If I went out and put on an act, I would have a group of investors that I might not agree with or who might not understand why I am making a certain business decision. It is important to remember that an investment is a relationship at its core.
I recently met with an experienced investor who gave me advice to leave the benefit corporation aspect out of the pitch. I appreciated his candor and agree with him that we would have an easier time raising if we left the ‘feel good’ stuff at the door. However, as I mentioned before, I don’t want to lose sight of myself and why we started our company. Doing good is so core to who I am that I would be leaving a huge part of myself at the door along with it. Because I put my values first, we now have a group of investors who are excited about the impact of what we are doing as much as the potential return.
2) Every “No” earns your way to a “Yes”
I am stealing this advice form a mentor of mine, Cornerstone Information Systems CEO Mat Orrego. I was in his office towards the end of our funding round to seek his advice on sales. I was discouraged by the sales rejections and how rude people can be on the phone (be nice to those annoying telemarketers!). He told me to view each “no”, as a piece of the puzzle you need to get to a “yes”. For example, say you call 10 people, and the first 9 said no but the 10th said yes and bought your product for $10k. Instead of thinking about how many people rejected you, think of how you earned $1k each time you picked up the phone, and after 10 calls you made $10k for the company. I went back to my office after this advice and reflected on our funding round the same way. Each investor meeting, pitch competition, and phone call earned my way to finishing the round. I actually divided the full round by all of the meetings and was impressed at my hourly rate!
3) Get ready to feel extremely annoying
I don’t think anybody likes asking for help, especially when the help involves money. To quote our business coach, “get comfortable being uncomfortable.” Investors are busy, so it will feel annoying to follow up, but sometimes they genuinely forget or they’re expecting you to take initiative. I have had investors tell me up front that they are not interested in investing but are happy to sit down and see where they can help and have ended up investing! Several follow ups are sometimes required to close deals or get meetings.
However, once I get the meeting, I focus on being genuine and building a lasting relationship. Regardless of whether an investor ends up investing or not, I want to leave each meeting or phone call with a new connection and some phenomenal business advice. I gained a lot of great advice during the funding round, and I didn’t need to feel like I was groveling for money. Don’t just launch into your pitch deck and talk for 10 minutes. Many times, investor meetings are not a pitch, they are a conversation where the investor asks the questions about your business they are most interested in.
4) Find out how the investor picks companies
When making deals happen, it is always helpful to understand what the other side of the table wants. I’ve had many investors tell me the team is the most important, followed by the size of the market and then the product. I figured out what our special selling point was in each of those categories and where our weaknesses were. This helped me prepare for questions and give good responses to holes that exist in the business. It was interesting to learn that the product is less important than you think, but investors know the product will shift throughout the business lifetime. Ask the investor for feedback if they don’t invest, and incorporate their advice in the future. Research the investors you are meeting with, go to their fireside chats, learn about their investment thesis, and tweak the talking points to each investor. If you can’t find information on the specific investor, go to talks and presentations given by other VCs and angels to learn about how they evaluate businesses.
5) Get organized
Many CEOs tent to be vibrant individuals who focus on the big picture, but it is important to prepare ahead of a funding round. Every investor will ask for different things: pitch deck, executive summary, term sheet, valuation, or a business plan are the most common. We prepared our documents ahead of time. We met with a lawyer to negotiate the cost of the legal fees so we could factor them into our raise. We wrote our business plan, updated our pitch deck, and prepared all the other documents before going to investors. When setting up meetings, it was helpful to have anything the investor asked for on hand to reply back to emails right away. Lastly, there will be a lot of coordination with all the meetings, travel, and follow ups, so put a good system in place to make sure nothing falls through the cracks.
Jean: Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this. :-)
I am inspired Muhammed Yunis, founder of Grameem Bank and the father of microfinance. I read his biography, Banker to the Poor, and have been inspired since. His work has improved the lives of those too poor for traditional bank loans, giving them funds needed to start businesses. I would love to take him to lunch, hear more about his story, and gain some of his wisdom.
— Published on May 15, 2018