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Speaker: Katie Nielson
Raising funds for your project can be a crucial decision for founders, but it's not always straightforward. In this article, we will explore the insights shared by Katie Nielson, co-founder of a unique startup called "Assure," as she delves into the complexities and considerations behind the decision to raise funds.
Understanding Your Audience
Katie began her presentation by getting to know the audience, which consisted of founders, investors, and service providers.
Understanding your audience is vital when considering fundraising, as different stakeholders have varying perspectives on the process.
Katie's Journey
Katie provided a brief overview of her journey, from working for a marketing startup to having a family break, and then returning to work with her husband to co-found Assure.
She highlighted the challenges they faced, including a two-year period without revenue.
Her story emphasizes the resilience required to navigate the challenges of starting and growing a business.
The Role of Assure
Assure created a fast, affordable, high-volume Special Purpose Vehicle (SPV), allowing multiple investors to pool their funds for various assets.
The company reduced the administration cost of SPVs by over 90%.
This example highlights the importance of identifying market gaps and providing cost-effective solutions.
The Evolution of Assure
Katie discussed how Assure's journey involved working closely with AngelList, which led to a significant increase in SPVs.
The experience with AngelList was a turning point that demonstrated the potential of their business.
This example illustrates how partnerships and collaborations can drive growth.
The AngelList Event
In 2018, AngelList decided to take its business in-house, presenting Assure with three options: immediate takeover, end-of-year transition, or acquisition.
Assure chose to work together toward the end of the year, demonstrating the importance of making strategic decisions to protect a business.
Decision-Making and Funding Options
Katie and her co-founder explored various funding options, including bank loans, lines of credit, private equity, VC investments, syndicate raises, and direct investments.
Each option had its pros and cons, highlighting the need to assess which choice aligns best with your business goals and growth strategy.
They chose to raise funds via a syndicate raise, a decision influenced by their existing network and relationships.
The Tools for Fundraising
Assure utilized two essential tools for their fundraising: a structured fundraising deck and a cap table pro forma.
These tools provided transparency and clarity to investors, showcasing their commitment to financial responsibility and organization.
Expanding the Assure Brand Family
Katie detailed Assure's brand family, which includes an accelerator, a market signal tool, a matching platform, and an analytics tool.
This expansion reflects the company's ambition to cater to a broader spectrum of needs within the startup and investment ecosystem.
Conclusion
In conclusion, Katie Nielson's journey with Assure offers valuable insights into the decision-making process behind raising funds for your project. It highlights the importance of assessing your business's unique circumstances and goals, understanding the diverse range of funding options available, and using effective tools to communicate your vision to potential investors. The expansion of Assure's brand family also illustrates the significance of adaptability and growth in the ever-evolving world of entrepreneurship.
Q&A
Q1: What prompted Assure to raise funds, and how did they decide the right time for it?
Assure decided to raise funds due to the need for scaling their operations and investing in marketing efforts. The trigger was a significant change in their business landscape when AngelList decided to take its services in-house. The right time was when they recognized that slowing down or staying small was not an option if they wanted to continue growing.
Q2: How did the decision to raise funds impact Assure's control over their company?
The decision to raise funds did result in some loss of control for Assure. They had to make a choice between retaining full control and slowing down their growth or raising funds to support their expansion. They ultimately prioritized growth over complete control.
Q3: What is Assure's long-term goal for the business?
Assure's long-term goal is not to maintain a family-run business but rather to exit the business at some point. It is not intended to be a family legacy business because the expertise required to run the company is highly specialized and not a natural fit for their family members.
Q4: How is raising funds through Assure different from traditional VC fundraising?
Raising funds through Assure offers additional options and flexibility. Startups can consider both traditional VC fundraising and using Assure's services, allowing for a more tailored approach to their specific funding needs. Assure's diverse set of offerings provides startups with various avenues for financial support, which may not be as readily available in the traditional VC world.
Q5: What triggered Assure to transition from a back-office service provider to building a suite of brand family offerings?
The decision to expand into a suite of brand family offerings was influenced by a desire to diversify and meet the changing needs of the market. It allowed Assure to offer a broader range of services to startups and investors, positioning them as a one-stop-shop for the needs of entrepreneurs and the investment community. This expansion was driven by both business opportunities and a desire to provide more comprehensive support to their clients.
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