What We Learned From Raising Funding at Gravyty
We recently announced that we raised our second round of funding here at Gravyty. It’s a fantastic team accomplishment that we’ve been thrilled to share with our communities and supporters.
As a company started in Boston and supported by some of the most important entrepreneurial institutions in the city (Launchpad Venture Group, Babson College, and MassChallenge), we wanted to share what we’ve learned along this journey with the community. Raising a funding round as a startup isn’t a quick-and-easy, solely transactional process - there’s a lot that goes into it, and we’ve learned a great deal along the way with the help of mentors, advisors, customers, investors and, yes, failure.
Here are five things we learned from raising our most recent funding round:
Know Your Story
We were lucky enough to connect with Christopher Mirabile, Managing Director of Launchpad Venture Group, while we were still MBA students at Babson College. During our first meeting with Christopher, he had no interest in our product, which was in an advanced MVP state. Instead, he was interested in us, our story, our intentions, and our motivations. Many entrepreneurs don’t take the time to think about the “why?” behind their service or product or what motivated them to get there. We learned not to discount how much our story will mean to our customers, investors, or advisors. If you’re ready to ask individuals or institutions for a great deal of capital to support your vision, then you should be prepared to tell them why it’s worth it to you, why customers will find value, and how you got to where you are today.
Money is Just the Beginning
The goal of raising a round of funding is, of course, to secure financial capital. However, it’s important to remember along the way that money isn’t the only thing of value. Investors are not only investing in you and your co-founder(s), but also in your relationships with each other, and the team you are building. In the corporate world, there’s a popular phrase which says “People don’t leave companies, they leave managers,” and we’ve found that in the startup community, the same can apply to success. We’ve often seen failure stem not from financial or product issues but communication and relationship problems, either between founders or teams. Because of that, we spend a significant amount of time focused on our culture, cultivating our relationships and building trust within our team.
It’s important that along the way, you celebrate milestones beyond raising money. While funding is an important and exciting milestone, it isn’t the only thing that defines success. At Gravyty, we’ve consistently celebrated team’s wins, big or small. Keep in mind that the reward doesn’t need to be monetary or elaborate; we recognize our team’s successes with anything from a team email or a high five, to a team lunch, a monetary reward or even a day off. Moreover, of course, for the huge wins, we make the celebration an event which combines a few different components. The goal with these celebrations isn’t to just reward one great result, it’s built a culture of competitive cooperation where our team members are consistently proud to be part of a winning culture, regardless of whether it’s a team win or an individual contributor’s accomplishment.
If you’re in the tech space, then you’re probably no stranger to the phrase, “If you’re happy with what you shipped, you’ve shipped too late.” By the time our acclaimed product, First Draft, was in the hands of customers for the first time, it was already on its fourth iteration, and those changes continue with regular rounds of updates to tech and design. It’s important to ask for customer feedback on your product and its features often. Many of Gravyty’s features are a direct result of user feedback. As you learn more about your customers, they will help you inform the product and, ultimately, our customer’s success is what’s most important to us. Listening is core to our culture.
The Clock Matters
People had asked us when we knew it was time to raise more money, but in reality, the mindset of raising funds is never something you can put to rest. The day that you close one round is the day you begin thinking of raising the next. There aren’t always particular steps to take when you’re considering how to begin the journey to the next round because it all comes back to the relationship you have with your investors. For example, Raymond Chang at NXT Ventures has been on our team since the very beginning. Not only has he supported us with capital, but he’s helped us shape our culture, supported us during tough times, connected us with customers and advocated for us when we weren’t strong enough to advocate for ourselves. If you start to think of your relationship with investors as collaborative, rather than transactional, then the length of time between funding rounds seems to be shorter and shorter. We’re thankful to have built strong relationships with our investors (Launchpad Venture Group, NXT Ventures, Stage 1 Ventures, John Huysmans, The Venture Capital Fund of New England, etc.)--the majority of which have participated in both financing rounds.
Your Customer Should Always be First
There are a lot of positive elements that come with founding and growing a startup. To our team here at Gravyty and us, nothing is more satisfying than knowing that we’re solving some of the largest challenges in fundraising. Since many folks on our team are former fundraisers, these are the same problems that they used to face daily. We cherish the idea that we are solving a “first-person” problem and that raising additional capital will help us grow to help even more nonprofits. The learning here is simple: your mission has to be driven by something more than making money. Making money is a result of hard work, and in startup land, the work is harder than hard. We realized early on that what would make us successful wasn’t intelligence or money or even our industry knowledge--it was our unrelenting dedication to fix something that was broken. Something that we cared about deeply. That something is what you want to find if you’re going to raise a round of funding because, without it, you’re just another entrepreneur.