Raising money.
Richard Francis, CEO of Spotlight Reporting, took a unique approach to funding Spotlight, which he shared on the Kiwi Founder Stories webinar. Francis chose to bootstrap the company for the first few years. A stroke of brilliance came after founding Spotlight Reporting when he saw a gap in the Xero ecosystem, moved quickly to fill it, built a product that Xero needed in their stack, and promptly sold it to them. That gave Francis some capital to pour back into Spotlight and get the business off the ground. “Call me old fashioned, but I wanted to prove it on my money first.”
A few years into the journey Francis raised their seed round. Some well-known investors including Vend Director David Wilson, MYOB founder Craig Winkler and PushPay Director Graham Shaw came onboard for this. To this point, Francis emphasises the importance of looking after shareholder money. “Shareholders money matters. It’s other people’s life savings. Get a CFO in. Get an accountant. Make sure you look after shareholders money. There is a guy at SaaStr who said ‘every dollar of shareholders money matters. And every dollar we spend I want to see ROI’. It might sound extreme, but I think that’s quite important.”
Following their seed round, Spotlight Reporting went on to raise a series A of $5.3M. In this round the majority of early investors reinvesting, which really helped, Francis says. They also had their first VC — Global From Day One Fund — come on board. Francis emphasised the importance of having alignment with your investors. “What we liked about Global was that we weren’t going down the rabbit holes of endless spreadsheets or debates around valuations and numbers. I really respected that Chintaka [Ranatunga, the Managing Partner] went out to all of our customers and talked to them about us and the product, and where they thought it was going. Once they’d had that story, and our numbers stacked up, everything looked good.” It’s critical to not just ‘raise money’, but to find the right investors who understand your vision, and will provide the support you need to grow your business.
Watch the webinar here:
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