One of the toughest tasks a startup will do is raise capital. That’s not a new or bold statement, and in fact it’s hardly even disputable at this point. Anyone that has been through the process of fundraising will tell you the same thing, “It’s incredibly difficult. Take the amount of time and work you think it will take, and multiply it by ten.”
That’s a quote Alex, the founder of Tixers, and I have heard several times. Not only did we hear it, but we found it to be completely accurate. However, luckily for us, we announced just a couple of weeks ago the closing of our seed round for Tixers at over $250,000. (See the Tixers team below)
Now, I want to help other members of the UP Global Community to do the same.
Startup Weekend is in our blood. Alex first pitched the Tixers concept at Startup Weekend Cincinnati, winning first place and meeting two advisors that we still work with closely to this day. I attended my first Startup Weekend Columbus as an undergraduate sophomore, switched into the business program at Ohio State, and have been organizing Startup Weekend Columbus for over a year now.
When Alex approached me to meet and talk about potentially joining the Tixers team back in February, one of the biggest draws for me was the stage of the business. Tixers was just about finished going through the UpTech accelerator program in Covington, Kentucky, and was beginning to gear up for a seed round. I had no real understanding of the fundraising process but tossed myself in anyway. Now, having gone through it, I can share that experience with you.
Allies are incredibly important
Our initial investment came from UpTech as part of their incubation program. After graduating from the program, UpTech became one of our biggest fans and allies in the fundraising process. In fact, the fund pivoted to lead our seed round. This is important, as UpTech and the investors in its network knew our business better than anyone else and could advocate on our behalf to others.
A lead investor is incredibly important when you are fundraising, and can be one of the more difficult aspects. Many investors will follow their friends and colleagues into deals, and so it’s important to leverage the networks of your allies.
A well-rounded team is a huge strength
For a long time, Alex operated as a relative one-man operation. Though he found investment interest, there were some parties who were afraid of the deal due to the fact that the business lived and died solely with him. It didn’t take long for focus to shift to acquiring talent to round out the Tixers team.
Once our CTO, Andy, and I were on board, our team became a real strength and selling point for investors. We could each point to our specific backgrounds and skill sets that contributed directly to the new company, and that really got potential investors excited.
Your passion shouldn’t be a secret
If you are passionate about your idea (and you should be, or you will fail) then you should wear that excitement on your sleeve at all times. How can you expect someone else to be excited about your idea if you are yawning and speaking about it in monotone to them? When you can speak about your idea with passion and excitement, it is contagious. You win people over to your vision and make them want to be a part of it – remember, people want to be a part of a “winner” and not feel like their investment is a donation or charity.
Be ready and excited to pitch
This ties in with passion, but you should be ready to pitch your idea on a moment’s notice. If you get an opportunity to pitch at an event or in front of a group of people, you should take every opportunity possible to pitch. For Tixers, simple pitches have led to a $25,000 investment, a trip to and winning pitch in Vegas, and countless contacts that have turned into advocates or customers. By spreading your message, you are giving that message an opportunity to reach much further than just the individual(s) you are pitching to at that moment.
Toe the line between persistent and annoying
It should come as no surprise that individuals who qualify as accredited investors are also very busy people. Having a verbal commitment for funding is really exciting and will be an awesome feeling. However, it’s important to remember that a verbal commitment doesn’t feed you, and can’t buy that piece of equipment that can take your business to the next level.
Don’t get me wrong, a verbal commitment is often the first step to closing an investment, but you need to keep in touch with those individuals and move them down the “investment funnel.” People get busy and other plans and obligations come up, but you need to be aware of those plans and close those investors before the plans bog down the entire process. Until you have the checks in hand and the proper paperwork filed, you will not close your round and get back to focusing on the really important business at hand.
Know the industry and where you fit
You don’t have to be a 40-year veteran of an industry to “know” the industry and disrupt it. Granted, those individuals may know it the best, but there have been many entrepreneurs who bring a system that has worked in one specific industry to a new industry and been very successful.
However, it is a prerequisite to have a baseline of understanding of the industry, it’s competitors, the market trends, and most importantly, where your business fits. For someone else to trust you with their money, they need to know that you know where your business fits in the market and where it is going. It doesn’t take very long for a savvy investor to find out if you are clueless or not during a Q&A session.
Expand your mindset as to who can invest
We would all love to get investment from Sequoia, Andreessen-Horowitz, Greylock Partners, etc. You may even know and target the prominent Angel group in your region. However, an accredited investor can come in many shapes and sizes. In the early stages of a company, whether its pre-seed or seed round, it’s going to be very tough to get institutional funding – especially outside of the coasts. The “Friends and Family round” still can be a great source of financing for your round, whether it’s directly contributed to by those individuals, or if they are connecting you to other individuals that they know.
You also don’t need to necessarily be geographically focused. You don’t need to hunt down investment in your immediate vicinity and you certainly don’t need to flock to the east or west coasts. Again, leveraging your network to find individuals in your field or industry is more important to your startup than necessarily having someone who can ride a bike to your office.
We are very lucky to have gotten connected with an incredible group of individuals who believe and were ready to invest in our vision.
Fundraising is hard, and will only get harder as more and more companies are started and look for capital. However, there will always be capital and support for great ideas. If you build something great and believe in it, you will be able to convince others to your vision as well. Good luck!
This post was written by Alex Burkhart, Tixers Founder and CEO
If it wasn’t for startup weekend, I would probably still be at my cubicle at my corporate job in Cincinnati. A little over a year ago, I was traveling for work to Seattle and met up with a friend, Ben Gilbert who is highly involved with startup weekend on a global stage. Ben told me to look into it when Cincinnati was hosting one. When it came to Cincinnati I almost didn’t attend because it was the home opener for Xavier Basketball, to where I am a season ticket holder. However, my idea ironically involved a solution to this exact problem where season ticket holders were constantly allowing tickets to go to waste or just giving them away. I decided to attend the weekend and present my idea to this problem. The idea ended up winning the competition. We were then eligible to compete in the Startup Weekend Global Startup Battle where we finished 40 out of around 200 cities from across the world. Even though it was disappointing that we did not finish in the top 15, it was still an amazing experience that really helped ignite some confidence to keep driving the idea forward. Now 1 year later, Tixers, is a new ticket exchange platform that allows ticket holders to exchange tickets they are unable to use now for tickets in the future. Virtually taking a timeshare approach to tickets, especially for season ticket holders.
2 months ago Tixers received $50,000 in funding along with other professional services and 6 months office space from an accelerator called Uptech. This was the tipping point for me to take the leap from the corporate world and to go after my dream of running a startup full time. This year’s Cincinnati startup weekend is actually being held in the Uptech offices and the Tixers desk space will be in the heart of all the action, which is cool to see because just 1 year ago it was simply only an idea in my head.
Startup weekend helped jump start this and began to validate the businesses and helped connect me to the major players in the Cincinnati entrepreneurial ecosystem.
Some of the management team and advisory board actually includes several people from startup weekend. Kenny Olson, brand manager at Procter & Gamble, was a fellow team member and now is an investor/marketing guru for the company. Tarek Kamil (founder of whatifsports.com and executive director at info motion sports), was a judge of the competition and is now our key strategic adviser and head of our board. Chris Ridenour and Nikki Phaller, organizers of Cincinnati startup weekend, are a tech adviser and contractor respectively for Tixers.
So as you can see startup weekend is very near and dear to my heart because without it, I truly believe that Tixers would still simply be an idea that I spoke about with my buddies at a bar or sporting event. Now, we have raised a little bit of money, formed a great team, and are in the process of gaining more and more traction to be able to launch Tixers on a national stage.
Startup weekend is an amazing and serendipitous experience that can open up many many doors for someone wanting to pursue an idea or meet some new people. Many people have ideas so this is the perfect place to take that idea and see if it can be made into a reality, you never know what could happen.