Acquiring funding for startups can be all-important.
While angel investors can give a young tech startup a jolt of income, typically between $10,000 and $100,000, VC funding opens a door to a much bigger pile of cash.
However, to get their hands on this windfall, startups have to go through a number of steps.
Typically, a VC will need to see a proof of concept, an effective team that work well together and a market that is big enough to support the startup.
VCs only invest in projects that have the potential to scale many times over their original value for maximum returns, so if a startup is in a niche space without a chance to expand to an appropriate scale, they will struggle to obtain VC investment.
Luckily for Saberr, that’s not been a problem so far.
Saberr has been successful in acquiring funding, obtaining $1.8 million since its inception, partly because the market size for the solutions it can provide is so big.
Shepherd sat down with Hot Topics to discuss how he goes his business ready for investment.
Getting hold of VC investment was a time-consuming process says Shepherd:
“It was just a lot of conversations over a long period of time. People always say that raising investment is much harder than you think, it took us 8 months from the first conversation to receiving the money in the bank.”
“We had conversations on a weekly basis, sometimes bi-weekly, sometimes 3 times a week to get it to close, so it was a very long process with a lot of conversations.”
Saberr ultimately managed to get the investment it needed, but that wasn’t because the business was necessarily the finished product when the founders started looking for funding.
Shepherd continues: “We had some cracking technology, a handful of really compelling case studies, we had no customers, our software was severely flawed, it couldn’t be scaled, but what we did have was a very good story.”
“We had a good PowerPoint presentation and some compelling technology behind it, but more importantly, we had the fundamentals of what could be a very, very good team.”
So how did Saberr secure its funding with an incomplete business model? By having a massive market size says Shepherd:
“Our market is enormous, we’re talking about anywhere where people have to work together. This is not just startups, it’s big corporations, we’re talking to the NHS about helping them build ward teams. We’re talking to education departments about how we can structure education systems, but it also has applications in sports, in government, in the military, anywhere where people work together our software is applicable.”
“There wasn’t great revenue streams, there wasn’t loads of happy customers to give us success stories, it was just those three ingredients.”
To hear more about acquiring funding from Saberr, watch the video above.