Fundraising; an inescapable topic when it comes to building a tech business from the ground up. There are so many different types of investments founders can go looking for, but we rarely speak about how to get the investors to find you.
One man with experience in this matter is Paul Galatis, Non-Executive Director of Yuppiechef.com and Founder and CEO of Names & Faces. Paul was considered one of the pioneers of ecommerce in South Africa, as one of the original directors of the popular retailer when it first came onto the South African scene.
Yuppiechef.com has won South Africa’s eCommerce Retailer of the Year five times running, and is well-known for their handwritten cards and massive customer following. The recent acquisition of Yuppiechef by Mr Price for just under R470m is testament to just how great this business is. Co-Founder and CEO of Nona Digital Mike Scott caught up with Paul to discuss his journey, and how to sell your vision to build up your business.
Selling a compelling vision of the future
“I think for me, what was actually pretty clear is that if you build stuff that people actually want, if you have product-market fit, if you have a good business, you’re not going to struggle to find very good investors,” says Mike.
Your vision gains investment
When it comes to raising funds it is your responsibility as a founder to convince others to invest in your business. “The easiest way to do that,” according to Paul, “is to be convinced yourself that your business is investable. A strong part of fundraising is in creating a compelling vision of the future. Is your vision believable? Is it simple enough for people to comprehend? Is it relatable enough to the audience? Those things, I think, are critical pieces to getting people to invest.”
It’s easier said than done, though. Self-doubt is something that many entrepreneurs experience, including Paul. He describes going through periods of high conviction, and then shifting to moments of panic and feeling like no one in their right mind would invest in the business.
But confidence is contagious, and when you can clearly see a successful future, others get sucked into believing in the vision, too.
Your vision finds your team
As Mike points out, selling a compelling vision does more than garner financial investment. As a startup, you’re probably not paying your team what they’re worth (yet). However, if the team believes in what you’re trying to create, they’ll put in the hours, because they’re also invested in this vision, and share the same passion for the project. People want to be part of something that is bigger than themselves.
Your vision creates your culture
That shared passion, in turn, breeds a wonderful team culture. Paul shares the moment that Yuppiechef got their first real customer – someone that wasn’t a friend or relative of the founders.
“Shane said he couldn’t just put the product into the box and send it off to the customer – you have to say ‘thank you’. So he wrote her a note on an A4 piece of paper, he said,
Dear Denise, thank you so much for shopping from us and enjoy your cheese-grater. Let us know if you need anything else. Shane and the Yuppiechef team.
And he sent it off. A few days later, another stranger ordered and I sent another note. It was only about eight or nine notes in that someone wrote back. Because of that little positive feedback loop and the fact that it was appreciated, the guys carried on writing cards.”
It was a combination of an untapped market, quick delivery, superb customer service, and those little thank-you cards which created Yuppiechef’s loyal fanbase.
“There’s actually a lot of literature on this,” says Mike. “There’s quite a famous book called Influence and it speaks a lot about this: the reflex of reciprocity. It’s not about indebtedness, it’s about wanting to actually reciprocate. It’s about saying, Hey, we’re actually in this with you.”
It’s amazing to see what sharing your vision can do, from gaining funding to creating company culture.
If you’re looking to partner with an expert software development team that cares about your product as much as you do and that will be right there with you along this journey, book a consultation with us!