Diary of an entrepreneur: Dealing with investors, lawyers and deadlines
Starting a business? Read Floom founder Lana Elie's breakdown of lessons she learnt from the early days of launching her online marketplace...
Starting a business isn't always straightforward. To help you get your idea off the ground, Startups.co.uk blogger Lana Elie is back with her latest column. Reflecting on three key lessons she learnt from the early days of starting her floristry marketplace Floom and raising start-up finance, read Elie's top tips on meeting with investors, finding a good laywer, and hitting deadlines that seem “unreachable”…
Play to your strengths with investors
How do you tell (and sell) your business story without a product? My answer was to visualise it with a professionally designed deck, and it seemed to work and really carried my investor meetings.
When you think of great products, you think of the ones that are a combination of the following: useful, beautiful, simple and easy to use. Whilst a lot of products might feature one of those things, finding a perfect harmonious balance of all four is something that I think is often undervalued or overlooked.
Also, and I probably didn’t realise this so much at the time, I found that just being myself was pretty important. I’m fairly confident when I get going, I can sell something, but that’s not what I would focus on when I walked in to initial investor meetings.
I was more focused on all the things that I'm not. Are they going to say no to me because I’m not a developer? Or turn me down because I'm not a finance whiz? Whilst I did my own, heavily researched and reworked, projections, it was absolutely the first time I’d dealt with a budget that size.
One of the ways I made myself feel more confident ahead of meeting with investors was to memorise every breakdown of spend and return of revenue for every month over the next five years. Obviously, no one bothered to ask me about that – it wasn’t a seventh grade maths test – but it really helped remind me that I was serious about this.
If you ask any investor who did take the risk and invest in my business, they’d say it was passion as much as anything else. It’s not my numbers, but it’s the confidence that I wanted it enough to figure it out.
Part of that process was both knowing, and not being scared to admit, that I needed a strong finance person on the team… as well as many other supporting roles.
Surround yourself with good people
Mentors are a dime a dozen. These aren’t always people who have been in your life previously, and they aren’t always free, but they’re what you need at that point in time.
My lawyer was one of the people that helped turn my business idea into a reality, and I’d only found him by contacting him off the back of a book of his that I'd read called Legal for Startups (I bought it because it was a rather small book and I figured at that size, even I would be able to finish it).
My lawyer had seen the process before, where as I'd never seen it before. I didn’t know at what stage heads of terms came, and I definitely wasn’t the strongest negotiator when it came to dealing with people who had years of business acumen and loads of cash. He taught me to stand my ground, but he also taught me what was normal and acceptable in these cases and taught me quite a lot about compromise.
Any lawyer will tell you that legal advice isn’t the area to cut costs in… Of course they will! But, in this case, the trust I built with my lawyer was what ultimately kept me in a normal shareholder structure, as opposed to registering it as a joint venture and selling 49% of the business right off the bat.
I can’t say that would have been detrimental to the business, but it would have meant I couldn’t hire under SEIS and EIS… you never know right?
Set deadlines… but don't expect everything to go to plan
There is nothing quite like walking in to your new co-working space or office with a chunk of cash in the bank and huge plans (and as soon as you have investors on board those plans become promises as well) but where do you even start?
Everything felt too small. I wanted everything designed, built, and ready. I wanted the world to see Floom and for the world to be able to use it.
I estimated what it would take to get us to launch. I saw that the deadline brought me a week past Mother’s day, so I pulled it forward by two weeks. We’re a flower business and if there’s one thing that the useless gift-giving men in my life have taught me it’s that we needed to be up for Mother’s day!
I could name about 1,000 things that stood in the way of that date, but still we pushed ahead with that goal in mind.
Setting your own deadline means it’s easy to make excuses, to shift it back a day here or a day there, but I didn’t budge. Mother’s Day 2016 took place on March 6th…
At just past midnight on February 26th – and surrounded by my team who had like me not slept for about four weeks – I hit the button that pushed floom.com live.
I got home at 2am, excited, but mostly exhausted. I went to the couch to do one last test run. The test order was overcharging, and anyone who might have been able to fix the problem was, unsuprisingly, unreachable at that time of night.
I hit the same button again that had just a couple of hours earlier given me such joy and the site came down…
Want to know what happened next? Head back next month to read the next installment in my business journey.
Floom is looking to raise £390,000 crowdfunding on Crowdcube. Click here to learn more.
Want to start your own crowdfunding campaign? Start right here at Startups.co.uk