FieldLens is making a major media announcement today – we have successfully secured seed financing and we could not be happier with the stellar group of investors that are helping us bring real change to field management in the construction industry. We’ll be posting the official press release this afternoon, so please check back for more information about who our investors are and how much we raised.
While we are so incredibly happy to finally be at the point where we can make this announcement, we also couldn’t be happier about hanging up our fundraising shoes for a while. Fundraising is hard. It’s mentally, emotionally and even physically challenging. And most importantly it takes time – a LOT of time.
Below are some thoughts on what we’ve learned in our journey to raise money, and some advice for anyone hoping to do the same.
Finding the Right Fit: The Beginning
You have a great idea and you could not be more excited to get started. Now you need the money to turn that concept into a reality. The good news – there are a ton of investors interested in early stage startup investing, from established venture capital firms to angel networks or individuals with a bit of cash available. The bad news – there are a ton of investors! It’s important to do your research and find the right investors that will help build your business. Not every investor is going to be right for your niche, so do your research and figure out which investors you could have a mutually beneficial relationship with.
The first thing we did was build a list of potential fits…and then start whittling it down. Whether it be sector or stage preference, area of expertise, geographical focus and/or a host of other things, it’s important to only target investors that you have a shot with. Spend time early on defining your targets rather than waste time in dead-end meetings later.
Warm introductions- it’s the only way. Investor websites invite you to submit your business plan cold, and I’m sure it works occasionally. But we are true believers in the power of the network- LinkedIn, alumni associations, former colleagues- we searched high and low to find the right introductions. Be creative and figure out how to make a true connection to the right investors, otherwise you risk becoming a faceless pitch among hundreds of other faceless pitches.
Our first seed investor evolved when a potential developer we were interviewing introduced us to Charming Robot, our amazing user experience and design partners. Charming Robot introduced us to Pedro Torres Picon from Quotidian Ventures and they eventually led our initial seed investment back in December 2011. The whole process was organic, personal, and therefore developed into a genuine and mutually beneficial relationship.
Do your research and don’t be afraid to ask for advice and introductions.
We had obviously already thought a lot about the business by the time we began the process of raising money. Application specifications had been written and rewritten, financial models had been built, thrown away, rebuilt and refined. Our data model was laid out and code was being written. That early work is the foundation of our business. It was also the foundation for the strange, ritualistic dance known as the Investor Pitch.
Venture firms see a lot of pitches, and they see even more pitch decks. We worked hard to concisely present the value FieldLens would bring to the construction industry. Our scrapbook is littered with the remains of dozens of discarded pitch decks that didn’t make the cut. It’s harder than it looks, and everyone has an opinion on how to make it better.
A good deck and a great idea gets you a preliminary meeting, but that’s it. Our experience was that the deck never really came up again! Pitch meetings are part story telling and part question answering. And learning- always learning. Not just about how to make a better pitch, but how to build a better business. Be prepared for everything, and be flexible about the format of your presentation. In the early days of FieldLens investor pitching, we were battered with questions we hadn’t answered yet. It was important to pick ourselves up, learn, and never make the same mistakes twice. Every meeting was followed with a post-mortem analysis of what we needed to work on.
We once had an investor give us a firm “no”- but then spend 45 minutes helping us better define our Total Addressable Market! We were disappointed to be turned down, but the value of that meeting is inestimable. The vast majority of venture capital professionals are intelligent and experienced, and very often provide insight or a different perspective on the materials they are presented with.
Finding the Right Fit: Closing the Deal
Above I wrote about making sure we only approached the right investors, but further through the process it is absolutely necessary to make sure only the right investors join the team. We were focused on finding investors that really understood our business model, our industry, what we were doing, and who our users would be – not an easy find when you’re building software for the construction industry! We learned that investors exist in every niche, and it’s important to find the right ones because they will become your partners in the business. The right investor will take you beyond financial backing.
Before they decided to invest, High Peaks Venture Partners took the essence of our pitch, and we dug in together. High Peaks called potential users. A lot of them! They went to sales meetings with us. They worked hard to make sure they understood what we were doing and how we were doing it. They made us work incredibly hard as we stress tested our assumptions. We are a better and stronger company for it.
The result: High Peaks offered to lead our investment round. We feel fully confident in them and they feel fully confident in us. Not only that — they are excited about us and just as eager as we are to see our product revolutionize the construction industry. We knew they would make great partners for FieldLens. And they have. They worked tirelessly to help us find other great partners to fill out our round, and we would not be where we are today without them.
And then the paperwork
Unbelievable. Really. It’s astounding how much paperwork is involved after you finally secure the investment. I’m a document packrat so I was fairly well-prepared, but the best advice I can give is to keep a structured file system of all legal, contract and accounting documentation right from the get-go, even if that seems crazy. You put your signature on something, the lawyers are going to want to see it, and you’re going to have enough on your plate without trying to find random NDA’s you signed with another startup over coffee 12 months earlier.
Some open road
It was a combination of great leadership, a great idea growing into a burgeoning business and a whole lot of hard work that has enabled us to successfully raise our Seed Round. While we know we’ve earned the confidence our investors have shown they have in us, we still count ourselves as lucky to have overcome this hurdle- lots of great businesses don’t make it off the ground because of this difficult, exhausting process.
Now we’re busier than ever…but we are extremely happy to have an open road in front of us to keep building a great product that we believe in. The goal of FieldLens is to make the work of construction professionals easier by helping them communicate more efficiently. Step 1 was developing the idea. Step 2 was raising the money while building the product. Now we are on Step 3 – getting FieldLens into the market. We’ll let you know how it goes.