How We CLOSED OUR PRE-SEED ROUND and raised $1 MILLION (!!) | First-time Startup Founder

Hello everybody welcome back to my channel this video is so long awaited I have been wanting to film this video for so long I'm so excited because I have been talking about this on my channel for a long time and it's been something that I feel like has taken over my life for so long and I can finally announce it but rela is a venture capital backed startup and not only are we venture capital-backed but we have closed our pre-seed round pre-seed round is closed we are no longer taking money we're no longer taking Investments and it's done and we raised a little bit more than what we had actually wanted to originally raise which is just so freaking exciting and I can't believe that I'm sitting here saying that because for so long it just felt like it was a never-ending process and it's a process where you deal with so much rejection and if you are a Founder going through it right now just know that all of those stories that are like so and so close their round in two weeks or in one month or whatever quick timeline it's just I think all Bs because there's it's that doesn't normally happen usually it takes a long time that your face with so much rejection you feel sometimes like oh my gosh like is this gonna work is it not because of all the rejection you're getting and so I just want you to know if you're going through it right now hopefully this video can give you some hope because all of those feelings are valid and all of them are normal but at the end of the day you have to be so incredibly confident in what you're building as a business owner that even if a million people tell you it's a bad idea you know that it's a good idea and that it's not only a good idea it's a great idea and you're gonna make it happen and here's why and you need to say it with your chest and say it with conviction because you're gonna be faced with a lot of rejection and you can't let that rejection slow you down or stop you in any sense so I want to sit here and talk about how we raised a million dollars and how we closed our pre-seage round and I wanted to answer some of the most common questions that I've gotten throughout this entire process and also questions that I had wished someone would have talked about on a YouTube video like this so hopefully this video does it justice and if you guys want a part two let me know also I do have to say if you want my process so from when I decided to raise money to kind of how it happened and my journey and all of the rejection and who I spoke with and how many people I spoke with and literally just like from the start to the finish in terms of like the entire timeline and process of it and and my thoughts throughout it then you need to listen to my podcast episode I recorded an hour-long podcast episode and it's filled with so much more information than this YouTube video will be filled with so definitely go and listen to that podcast I'm gonna have it linked down below but it's going to be so much more in depth and I think it's gonna be a great supplement to this video so once you're done with this video and once I've answered these questions then go listen to the podcast so you can hear my entire process from start to finish so I'm just going to go through some of the five or six most common questions that I got and before I do that I did want to say thank you to Squarespace for sponsoring today's video one huge thank you because without Squarespace Rella our company would not have a website it is built on Squarespace which is the easiest way to build an online website and if you are a startup listening to this I'm assuming you're a Founder then you need a digital presence and you need it to look good I will I cannot tell you how many times investors have told me that they love our website like that was honestly probably like 85 of the conversations that I've had with investors and I've had a lot of meetings with investors the number one thing that they complement us on like from the get-go is how beautiful the website is and it's because of Squarespace so if you don't believe me you can go check it out for yourself or you can check out all of the beautiful templates that they have offered but it's so easy to customize our developers did not touch it once like me Natasha our designer we're the ones working on it we do not have have like coding experience whatsoever because you do not need to it's that easy if you guys want 10 off your first purchase on Squarespace you could use my code Natalie Barber at checkout or go to squarespace.com Natalie barboom okay now let's talk about these common questions to start us off I do want to say what we are building and why we decided to raise so number one who are we and why did we decide to raise money because there is a misconception that every business needs to raise money which is so so not true it's usually pertaining to Tech businesses I would say that need to raise money more than anything else but even Tech businesses if you can bootstrap it which just means that you fund it yourself and you're not raising money from other people by all means try to do that because you're going to keep all the equity in your company and I mean whenever you bring on investors you end up losing a lot of equity and also you the end of the day kind of work for someone else like at this early stage we don't feel that pressure as much but I know as we raise further rounds if we do give up board seats then that's going to feel a lot more like we're working for other people so if you can keep control of your company and you do not need to raise money and you can find a way to start charging people immediately and making Revenue immediately I think that that's the best way to go but if you are not a tech company for example and you're a mom-and-pop shop a restaurant any other business Consulting business agency I don't think that you necessarily need to raise money really raising money is helpful when you know that you can scale to a billion dollar business you have the potential to scale to a billion dollar business and something that's going to make people incredibly wealthy and that is when you go to raise because Capital obviously helps and money helps so that's the time when I think it's good to raise and what we are is we are a tool for creators our mission at the end of the day like the reason why I started Rella is because I want to help creators change their lives and I want to show them the power of social media I want to create a tool that is specifically for creators to really grow on social media level up and manage their business on Rella so that's what we're doing we're starting off with just a simple content planner because I think that That's the basis and the foundation of any content creator and the content planners that are out there are either made for managers they're made for businesses they're made for Brands I feel like the Creator especially the Creator that is just starting out is incredibly neglected with the millions of tools that are already out there and creators are using a ton of different tools and they don't know what to do and it's just so hard when you're first starting out and you're so disorganized when you're just starting out and it was a pain that I had felt for so long and for years and when I was coaching other creators I could not like recommend a product to them because I felt like everything out there was so inefficient like I was using Microsoft Excel I was using project management tools and it just wasn't made for the business that we were in and so I wanted to create a tool specifically for Content creators that are just starting out to help them really level up and grow row and change their lives on social media so that's what we're doing that's kind of our mission and that's what we were pitching obviously that is not the entire pitch if you want to see that let me know that is why we decided to raise money and that is what we told investors along with a bunch of other things and answered a bunch of other of their questions but if that sounds like the startup that you are building not necessarily the same exact startup but a startup with the potential to get to that point then you may want to consider raising capital and there are multiple ways to raise Capital you can go the angel investor route you can go the Venture Capital route um you can do a mix of both most people start with doing angels and then go to VCS but I will say with our pre-seed round it was 100 Venture Capital we had a few small checks from like like two friends that we allowed to put like really really small checks in just because they believed in us from the very beginning but besides that it was all filled with investors and like um actual Venture Capital firms not just Angel Investors so you want to hear about that definitely listen to the podcast about kind of my thought process with that but I just want to put that out there in this video I'm gonna be referring the podcast a lot and the next question that I get asked so frequently is did we have connections I'm not gonna lie and say that connections do not help because connections are everything and raising money is actually when I discovered this the most or I guess not discovered it but where you can see it the most so no we did not have connections in the Venture world in the investor world I did not know a single angel investor I did not know a single Venture Capital investor I did not know anything about the startup space whatsoever I've never worked for a startup I didn't know anyone that worked for a startup I didn't even know what the process of raising money looked like I learned all of this through talking to people however I will say I did go to school so I had a university like Alumni network if you will even though I didn't know them I could pack into those resources so I will say that that helped because our first way of meeting investors or learning about it was by going to my university the entrepreneurship program and one applying for their accelerator which we ended up getting into and two meeting investors through there so like asking professors or asking people like hey can you introduce us to some investors that you know even if nothing necessarily came out of it it gave us that exposure and gave us you know just a way to build our Network so I will say no we did not have connections none of us as Founders had connections and it was all so foreign to me like I cannot tell you how how foreign it was I mean I literally didn't know anyone in this space whatsoever and I had no idea what any of the terms mean there are so many different terms that you need to learn I didn't know what investors would look for I didn't know what made a good pitch I didn't know what the process was like I didn't know how long it takes like I really went into this incredibly blind and I just started meeting people and started building my network on my own but when I say that you notice it the most raising money about how important your network is it's because people that have either worked at a VC Fund in the past people that have started a startup in the past people that have parents that are investors or previous Founders people that have family that are previous Founders or investors those people raise money and seem to close their round so much quicker than people that do not have connections and that's just life I mean you cannot hold it against them because what are they going to do not use their connections but that's just something to know that you do not need connections going into it but of course if you have them use them because it is all about who you know in this industry which brings me to my next question which is how did I make those connections how did I begin speaking to investors like I said the first thing I did was I tapped into NC State I went to North Carolina State University it is not an Ivy League it is not like a prestigious school by any means but they have a great entrepreneurship program and so I looked into that we applied for their accelerator which they have for entrepreneurs and we actually ended up getting getting into that and also getting an equity free grant which definitely helped us out in the very beginning so when we like first were starting out before we even decided to raise money and also they had a demo day so we were able to pitch to a bunch of NC State people investors were invited we got the list of them so we were able to reach back out to them and so that was incredibly helpful so that was our first way of meeting investors I also reached out to a ton of VC firms in North Carolina because I felt like okay all of us are from North Carolina you know people might want to invest in you know the local entrepreneurs there so I reached out to every single investor was like hi I'm an NC State Alum I'm from here this is what we're building this is what we're doing and I reached out to them that way I'd cold emailed I would say 90 95 of the people in my network today I I met through cold emailing and a lot of people say that cold emailing doesn't work I disagree I think it definitely works less than an intro like of course an intro is going to be better and like a warm intro is going to be better when you have someone introduce you to and connect you to but in order to do that I think it's a numbers game and cold emailing still works and if you can email a thousand people and 250 of them respond like yeah 25 is not great but it's a lot better than not having emailed those people at all and having zero so I'm a pro pro pro cold email person and just a cold reach out because that is how I made almost all of my connections so once I kind of started talking to you know the university people some local investors there I started getting a feel for what questions they were asking I was definitely not that prepared in the beginning but also you should know as a Founder you should know your business better than anyone else so none of questions were like uh I don't know the answer to that like I knew the answer to everything it just might not have been as polished or as prepped as you know it should have been because the really at the end of the day they're asking questions about your business they're asking you what is your business how are you going to grow how are you going to acquire users how are you going to make money uh what's your plan how many users do you currently have who is your team if you're a founder and you can't answer those questions then I highly recommend you take a step back and really figure out your business before you begin speaking to any investors because those are all questions that really should be second nature to you there is prep so that you can like polish it and kind of like make it sound a little bit better but you need to be confident going into these meetings and you need to be confident that you know the answers to your own business or else that's kind of a red flag I would say so I started getting a feel for what those meetings would be like and I started reaching out to people on social media social media is there is no excuse for not having a Network anymore because of social media before social media I understand how the heck did you meet people that if you didn't necessarily have them in your circle if your parents didn't come from money like how did you meet people nowadays that is definitely not the case I'm not saying that people with connections have it easier because like I said they 100 do but there is still a path for people that do not necessarily have connections at all and that is through social media so I reached out specifically on Twitter LinkedIn and Instagram but Tick Tock is another great way to meet people as well but those are the three resources that I had used I initially I got on Twitter I made a Twitter account specifically for raising money so I do have a Twitter account it's solely startup based like I don't really post anything about like Social Media stuff like my you know personal brand on there because I just made it so I could speak with investors so I started following I started finding some Founders and like going through their following list and following all the investors I thought were interesting I also started looking at really prominent investors and following them and following their following list so everyone that I was following was an investor or a Founder in like my field or a Founder that you know recently raised money or someone that I could you know add to my network and not only did I start like responding to their tweets and like tweeting at them but I would DM them and I have dm'd so many people like my Twitter DMS it's a long long long list those do not always get a response like I will actually say that dming didn't get like the highest response on Twitter but it got the responses of people that I needed and one of the people that I dm'd on Twitter actually wanted to invest in Rella and we ended up passing because we had other investors come in with better terms but they were going to write a 125 000 check you know and like that was that would have been huge for us but we actually turned it down because we had other investors that had come in at that time but also DM people on Instagram because I have a blue check mark on Instagram so I figured that it would get seen more and on Instagram I almost have a 100 success rate with DMS um because I think of that reason so dming people on Instagram I also would DM people on LinkedIn and get creative I would try to find their emails I would look up Founders in their portfolio so companies that they invested in and finding founders of those companies and reaching out to those Founders and asking if they could introduce us or to set up a call with them so I definitely recommend just being creative with the way that you reach out to people and you will get some responses how long did it take us to close our round we began raising money in February and we got our first check in July and we closed in October we did take a little bit of a break like June and July because we at that point I was getting incredibly discouraged I was facing so much rejection and I was like listen guys we need to go back to the drawing board and see what we're doing and like refigure this out and so I took a little bit of a break and then I came back in July and we ended up getting our first check at the very end of that month and then after that first check that investor introduced us to our other investors um and then we got money from them which I all in August and then we didn't close we didn't get the last check until October so closed in October but first check came at the very end of July so in total it took us six months to get the first check and then eight months to close eight ten nine months nine months to close the round which I mean that last check was like the very last one that we needed so thankfully we did have money starting July and August but it definitely was a period of so much like it was a mental like War you know because like you're building your startup you're so excited you're encouraging your team you're you're a leader you're a CEO but then also you're being told no and this is why I don't think it's gonna work and being faced with so much rejection and having to spend so much energy on meetings meeting with investors that are ultimately going to just reject you and so it's it was a mental struggle for me and if you want to hear more about that definitely listen to the podcast but yeah face so much rejection so yeah it took us kind of a long time to close the round but I will say that the market has been down investors money has definitely dried up in the past few months so I'm just very grateful that we were able to and I'm so proud of us and I actually think that it came at the perfect time I would have much rather closed around in October than in April for example because now we have Runway going into 2024 not just end of 2023 so I think we're in a really really good spot given that there's probably a recession that's coming up and investor money will probably dry up in the next few months as well so I actually am so happy with how it worked out and I'm just so freaking proud of our team the next question that I get asked is what do you need to raise money like do you need a data room what is a data room do you need money do you need Revenue do you even need a product it totally depends I mean people raise millions of dollars off of an idea so it definitely depends on one I think who you are to what your business is and three who your investors or the investors that you're targeting what they're looking for or because all of our investors and every investor that I had a meeting with had different things that they had asked for so the main things I will say is one you need to remember that at this stage early early stage startups which we are an early stage startup especially pre-seed they are investing in the team they need to believe that you as individuals are able to build a billion dollar business and able to build a business in the industry that you're in because your company is going to go through pivots my original original idea forrella is different than what it is today the mission has stayed the same I've wanted to show people the power of social media I wanted to change their lives through it but the product has changed so it's not necessarily the product that they're like betting on they are really betting on you as a founder and as the founding team so that's the first thing that we gotta get out of the way so you better have a really great story and a really great reason of why you are the people to do that second thing is you do not need Revenue you you don't need financials however it doesn't hurt it definitely helps if you have customers that are paying and showing you that they are willing to pay that is going to take you such a long way another thing is showing traction so if you don't necessarily have a product yet you can have a wait list or you can have people that are excited for this or if you do have a product how many people have signed up how many people are using it what is your monthly active usage things like that can be really really important until a really great story so you don't necessarily need anything but I will say that having traction and having a really great story and explaining why you are the team to do this is going to be the most important part because typically the people that get funded off of a idea written on a napkin are people who are already involved and connected in the industry and the investors trust them because they either have a proven track record by building previous startups before or they just know the right people and it's all about who you know so if that's not not you I would definitely get some traction before you just come out with an idea and Pitch it to investors my camera died but I wanted to do an outro so thank you guys so much for watching this video it was definitely a lengthy one so if you've stuck around this long then please leave a comment down below subscribe all of that good stuff and if you want me to do more videos on this topic I think every single one of these questions and so many more questions can have their own video break down to it so I'd love to do a series on this if you guys aren't interested if you guys want me to again I am just one founder and other Founders experiences might be different and I can only speak for precede I can't really speak for series a or anything beyond that but I think that this is probably the time when it's the most scary and it's the most unknown and I really wish I had a YouTube video like this to help me out so if you are a Founder I'd love to know what you're building so you can comment that down below but thank you so much for watching foreign [Music] [Applause] [Music] [Applause] [Music]

Channel: Natalie Barbu

Views: 37,217

Keywords: natalie barbu, startup life, entrepreneurship vlog, how we raised a pre seed round, how to raise venture capital, how to raise money for your startup, how to raise money for my startup, how i closed a pre seed round, pre seed round, how to, raising capital, fundraising 101, fundraising tips, how to fundraise for a startup, startup fundraising, pre seed fundraising, female founder, female founder raising venture capital

Id: EM0rGklUe50

Length: 22min 10sec (1330 seconds)

Published: Thu Dec 15 2022