💸 The unfair advantage of fundraisers in residence

TL;DR

We are delighted to announce our partnership with Mountside Ventures - a leading boutique fundraising advisory. They have joined us as the fundraisers in residence for our portfolio — an initiative we call Wayraise.

Wayraise is a fundraising readiness programme created to increase the support we offer to our portfolio companies throughout their fundraising journey.

In this article we cover:

• Why we focused on more fundraising support
• The reason we outsourced
• How & why we chose Mountside Ventures
• The workings of Wayraise
• Results & Impact
• Why the perception of in-house fundraisers needs to change

🤦‍♀️ The challenges of a portfolio manager

It’s no secret that being a portfolio manager is difficult. Offering support that caters to the variety and complexity of each company’s needs is no simple task. It’s nearly impossible for a team of one or two, especially with a portfolio of 200+ companies.

With that bandwidth in mind, we set on a mission to ensure we had the infrastructure to support our portfolio with one of their most important needs: fundraising.

Speaking to our companies, we pinpointed three key fundraising challenges:

1. Lack of time to properly structure their next funding rounds (i.e. defining the right amount of capital needed for correctly defined future growth metrics, valuation, round price and market sizing).
2. Translating a compelling company strategy into the necessary supporting material and data room (i.e. one-pager, investor deck, financial modelling & metrics).
3. Mapping the VC ecosystem and getting in front of the right investors, with the right pitch, at the right time.

“Often we’re asked by founders to make introductions to certain VCs. The issue is that often, they haven’t got clarity on why a particular VC would be interested in their company, nor a tailored engagement approach.

Our goal is to make targeted introductions, beneficial for both the founder and investor. However, most of the time, founders come to us too late in the process. This leaves little time to re-work and tailor their strategy, particularly with pressures to close the round as fast as possible.

I see many founders, irrespective of the stage of their round, with acute knowledge gaps when it comes to “the art of fundraising”. The end-to-end process is complex and time is not in their favour to learn everything overnight.”

Remus Radvan, Head of VC ecosystem, Wayra.

👍 The decision to take on a fundraiser in residence

With the challenge identified, we set out to find the solution. We looked at our options:

1. Build an internal team to offer full-time fundraising support

2. Partner with an external fundraiser

👀 Finding the right fundraising partner

We spoke to 20+ fundraisers, shortlisted to 3 finalists.

If you’re interested, below is our map of the top fundraisers we reviewed based on their business model (whether they operate at risk or whether they take a fixed fee from founders) and the extent to which they are involved with the companies they work with (‘investor intros’ only, or wider fundraising support to companies, such as getting involved in the details of a company’s financial model).

Areas of particular interest to us were:

• Their track record: how successful have they been in supporting companies to raise VC capital?
• Size of the organisation: Are they a one-man band or a company with a wider team focusing on this specific problem, and therefore will they be able to deal with the number of requests they would get from our portfolio companies?
• Their usual business model: do they typically work at risk via a contingent fee or do they normally ask founders to pay upfront?
• Do they have deep connections to the investor community?
• Experience of running programmes: have they run cohort-style programmes in the past, and what was their experience? Do they have the technical background and expertise to run the workshops?
• Founder references: what do founders think of them? Have they had great testimonials in the past from companies raising from international investors?
• Resources: do they have the right fundraising resources at their disposal to share with the companies?

🤝 Choosing Mountside Ventures & the creation of Wayraise

We decided on partnering with Mountside Ventures, a leading fundraising advisory, naming the joint effort: Wayraise.

🙌 How it works, why it works for us

Wayraise brings on board the expertise of fundraisers, Wayra and its 500+ VC network built over the last decade.

To make the support as scalable as possible, we opted to run Wayraise in the form of a programme, three times a year. Each edition has no more than five companies and is structured around 3 main pillars:

1. Knowledge building — equipping the founders and their teams with a fundraising framework. This includes elements like tips & tricks, how to structure their rounds, pitch deck support, financial modelling and importantly, understanding how VCs work, how they think, how to approach them and why some VCs are more suited to their company.
2. Tailored 121 support — with both Mountside Ventures and Wayra. These sessions are focused on the company’s biggest challenges identified throughout the programme, building on the core curriculum.
3. Outreach campaign — partly supported by Wayra to facilitate introductions to the VCs that the founders don’t have access to. This will allow the companies to secure warm intros, as well as give them access to honest feedback back from the VCs, gathered by Wayra’s team.

“It’s been a pleasure partnering with Wayra and doing what we can to support their companies as they prepare to raise their next round of funding. We believe the very best founders have the highest opportunity cost of fundraising and having someone by their side who can equip them with the tools, the know-how and the understanding to streamline the fundraising process can help minimise the disruption caused to their business, so founders can focus on the things that really matter to their growth.”

Jonathan Hollis, Managing Partner, Mountside Ventures

🏆Results & Impact

The first edition of Wayraise is still in its infancy, having so far delivered four days of content and a handful of 121 sessions with tailored support.

We are now preparing VC introductions off the back of these, and we can already see our founders better targeting their investors profile with a higher level of confidence in the fundraising process.

Here‘s what some of our companies had to say about their experience with Wayraise:

“They will save you time, lots of time and headache trying to figure out VCs. As a startup, you don’t have that luxury. Surround yourself with Mountside Ventures experts that will advise you on the best strategy for raising VC capital.”

Jose RazGuzman, Sensing Feeling

“Really well structured, useful insights, tailored feedback on each company.”

Alena Golden, Rap Tech

“The Mountside team all possess an excellent mix of qual and quant, and art & science of fundraising. They’re also super empathetic to founders.”

Astrid Chang, Provenance

👉 The perception of fundraisers needs to change

Our discussions with VCs and fundraising consultants unveiled some of the limitations they see with the in-house fundraiser model:

• ‘Founders disconnect from the fundraising process when there’s external support’. Some founders see fundraising partners as an opportunity to outsource the entire process, rather than a means to support their own efforts.
• ‘Some companies don’t see the need for additional fundraising support.’ To a company that has successfully raised in the past, or boasts great performance across the board, raising another round may not seem like something that requires extra support.
  However, even if there is no worry of whether the company will be able to raise again, the time and effort it takes can always be improved. As a busy founder, tapping into experts ensures that your company is in the best possible position to raise, with the best people, with no last-minute rush to secure capital.
• ‘Investors think founders should run the end-to-end fundraising process independently and a % of the round shouldn’t be paid to the fundraisers.’ Growing a business requires recruiting the right people to fulfil different functions for the company. You wouldn’t expect a founder to be a developer, customer, marketer etc… Why is that same thinking not applied to fundraising? ‘Fundraising is a full-time job’ after all, and one that can be improved with expert support.

Although these limitations do exist, we believe there is a real need and great value in taking on additional fundraising support. We hope that VCs, portfolio managers, and founders will also see their value and find the right model that suits them.

“Lack of funds is probably the main cause of start-up and scale-up failures. That is why I encourage every portfolio manager to consider a fundraiser-in-residence to accelerate and bring efficiency to the fundraising journeys of their portfolio companies, while increasing their chances of securing their next investment round. Even though some of the content and processes were familiar to both us and to the founders, the depth of knowledge has broadened our perspective on fundraising, giving us new and exciting insights. Our founders have also appreciated learning all of this from a neutral party rather than their investor(s), making conscious and hopefully better fundraising decisions. If our pledge is to give the best support to our companies in all their scaling challenges, why shouldn’t we offer fundraising expertise?“

Victoria Navazo, Head of Portfolio, Wayra UK.

Roman, the founder of Splento who was on the first edition of Wayraise puts it best:

“For anyone contemplating a raise in the coming 6 months — Wayraise is a must! If you want to run a marathon fast — you can’t do it on your own. You need a coach.”

Roman Grigoriev, Splento

If you made it to the end, thank you for reading, we hope this article is useful :)

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