How They Raised Series A: Tessian

The Family (AAA) Stories

Phishing and fraud have been around pretty much as long as email has. Sequoia-backed Tessian gives supercharged tools to businesses, helping their employees keep things safe online. Co-founder & CEO Tim Sadler was kind enough to give us an inside look at how they raised their Series A round 🤑

How long did it take you to raise Series A?

Five years. Tessian was founded in 2013, and we closed our $13M Series A fundraising, led by Accel and Balderton, in 2018.

Did you think about fundraising/networking with Series A investors since the day you raised seed, or did you ignore it until you felt 100% ready?

Founders need to try and balance the time they spend building a company and fundraising. For us, it didn’t make sense to be meeting with every investor we came across, because we wanted to build long term relationships with the investors we would love to have supporting us over time. We knew Accel from our Seed round and first met Balderton 18 months prior to them investing.

How much did you raise and from whom?

We raised $13M led by Balderton Capital and Accel. Amadeus Capital Partners, Crane, LocalGlobe, Winton Ventures and Walking Ventures also participated in the round.

What was the biggest difference between raising Seed & Series A?

Series A requires more underlying metrics on the business 📊Investors care about the numbers, in detail — such as ARR, customer churn, how many and how effective your salespeople are, etc. The valuation for Series A is obviously higher and investors need to be confident that you are addressing a big enough market opportunity and doing it well.

What do you wish you had known before starting? What would you do differently?

Give yourself the time you need for the raise — at least three months — and remember that you want to have at least six months cash in the bank when you start. If you’re fundraising when you’re on the verge of running out of cash, you won’t make the best decisions for your company and you won’t be pitching as confidently as you should be 🏃

I generally think we ran a good process for our Series A but wish I’d been able to better balance company building and fundraising — I underestimated how much time fundraising takes and it is critical to not forget about the state of the business during this time.

Was your data organised? Did you build a data room?

Yes, we needed to have all the data organised and building a data room really helped with this. You learn that (depending on the type of your company) all investors will want to see the same kind of things, so having this readily accessible will save you time in the long run. This includes ARR growth, individual sales rep performance on a month-by-month basis, ARR expansion on an account basis month-on-month, historical P&L, 18–24 months of financial forecasting (showing what you will do with the money you’re raising), headcount plan, product roadmap.

We tried to keep the admin as light as possible by exporting data from the systems we were already using (e.g. Salesforce, Xero) to avoid duplication. Putting proper systems and processes in place from the beginning helps with preparing data for investors at Series A and beyond.

What did you learn re deck, pitching & storytelling during funding?

Storytelling was incredibly important during the early funding stages. Firstly, we needed to tell investors the story of how we, as the founders of the company, planned to grow the company and make it a success so that they could understand why they should invest in us.

Secondly, we realised how important storytelling was in explaining the problem we are trying to solve, in order to paint the picture of why our product/solution was valuable to the markets we are targeting. In our case, our pitch explained the problem IT teams are facing — data breaches caused by people misdirecting emails — and then describe the solution, as well as how it’s different from everything else on the market. We wanted to make the presentation as simple and memorable as possible, especially given that cyber attacks can be such a complex area to get your head around 🙇‍♀️

Any other thoughts about your Series A?

Series A for me was a bit like a recruitment process — you’re trying to find the very best people you can to join your board and help you build your company. It’s not just about the capital that you’re raising and we were lucky to get the two people that I wanted to help me do that! 👩‍👩‍👧‍👦

The Family (AAA) is dedicated to helping ambitious founders raise the best Series A possible. Education is a big part of that, so keep an eye out for more of our content. And of course, if you’re thinking of raising a Series A in the next 4–12 months and want to take part in our programme, get in touch! (👉 pietro@thefamily.co / aaa.thefamily.co)

Thanks to Ben Freeman & Laura Brooks for making it possible for us to share this story 🙌