A Deep Dive into the Fundraising Bootcamp Alumna’s Strategy and Lessons Learned
It hasn’t been easy for startups in 2023 – especially if they need cash. After the 2021 overbidding frenzy, valuations have returned to more realistic levels, and fundraising activity has slowed down. It has been a year of mostly flat rounds, with investors and startups taking a “wait and see” approach, according to TechCrunch.
But plenty of cash is still available, and many startups are raising funds. The ecosystem is experiencing a remarkable influx of funding, with more new venture capital funds emerging than ever in history. It is easy to see how much money is available for promising startups, with over $580 billion in dry powder waiting to be deployed. However, demonstrating your company’s full potential is even more crucial, and preparation is key. As we start Q3, we have a list of 15 startups from our alumni community who raised investment in Europe and beyond just in 2023.
One of those companies is QFlow, Bootcamp alumni who recently closed an oversubscribed Series A round with investors in Europe and the US, raising £7.2 million. We interviewed our alumna, Brittany Harris, the company’s CEO, who shared her journey, highlighting how meticulous planning, strategic decision-making, and deadline adherence contributed to their success.
Compared to their previous round and the experience of many other founders, Brittany told us QFlow’s fundraising process went very smoothly this time round. According to her, two key factors contributed tremendously to this:
- The most basic and critical one: the business is in the right place, and it has successfully hit all its targets
- Brittany’s preparation was extremely careful, from planning the whole process before going to market to building an exceptional investor pack and communicating their strict timelines.
Let’s dive in.
Planning and Fundraising Preparation
A few months after going through the Fundraising Bootcamp in October 2022, learning about the process, and rewriting her deck with our team, Brittany used the end-of-the-year holidays to plan and strategize the next steps in their fundraising plan.
The process was much easier this time, partly because we planned a huge amount of legroom, and the Fundraising Bootcamp was really helpful in helping us understand how good planning could look. Even stuff that is often overlooked, like being fully prepared before even entertaining any conversations with investors.
As the sole responsible for raising funds for her company, Brittany designed everything they needed following Bootcamp’s strategy: from exact timeline to the right list of investors, prepping their investor emails, building the perfect data room and all the details on assessing and approaching interested funds.
During the planning stage, Brittany Harris also decided not to disclose their valuation expectations upfront, as advised in the programme, instead allowing investors to determine their pricing.
Selecting the Right Investors
Brittany drove the process timeline from the get-go, setting clear expectations and dates to potential investors. All targeted investors were informed of the exact process timeline via an investor update email one month before the round opened in January.
Reflecting on their previous round, she recognized the importance of avoiding wasting time and effort on engaging with investors who were not a perfect fit for the business. This time, Harris focused solely on highly targeted investors, following the guidance of the Fundraising Bootcamp. By targeting only suitable investors and investing in her stage, sector and geography, she minimised wasted time and resources on unproductive engagements.
Evaluating investor fit and using the Pyramid of Priorities to categorise them into tiers made everything more straightforward, separating investors based on their alignment with the company’s vision for the future.
Comprehensive Data Room
Bootcampers know how a well-structured and comprehensive data room facilitates due diligence and enhances investor confidence and trust in the startup.
Brittany dedicated the end-of-the-year holidays in 2022 to building QFlow’s data room in full detail, taking advantage of the quieter period to focus on the planning stage.
Their data room gave investors everything they needed to understand Qflow comprehensively and to conduct due diligence. It served as a centralised repository where investors could access essential documents, financial information, market analysis, and see other relevant materials necessary to facilitate the deal.
One of the main feedbacks we had from investors was, “Oh, this is the best data room I’ve seen in years”
Driving the Fundraising Process Timeline
In a market that is dragging its feet, QFlow oversubscribed its round in just four months, two months earlier than the market’s average. Harris believes the strict timeline was the single most important asset that helped them close their round so fast.
Using an investor update newsletter, Brittany communicated the various stages of their fundraising journey with all investors from the get-go. She gave a heads-up about the start of their round about a month before the opening date, detailing the exact dates when they would open the data room, meeting availability, and a clear deadline for entertaining term sheets.
Along the way, additional investors were recommended by the ones she originally had approached. Still, QFlow did not extend its timeline. Hence, investors who came in late had to catch up if they wanted to participate in the round, staying fair to others who had already committed to the original schedule.
In a resolute move, Brittany dismissed some investors who disregarded her (well-communicated) fundraising timeline. When an investor expressed their intentions to submit a term sheet in June, Harris responded, “Don’t bother; the round will be closed by then.”. Despite recognizing the potential value these investors could bring, she couldn’t help but question their dedication. “We clearly communicated the timelines, so why didn’t they take it seriously?” she pondered.
Much of what we discuss during the Fundraising Bootcamp revolves around driving the process timeline, and QFlow is the perfect example of how this works for the best. Investors are the only ones who benefit from dragging a decision, not only because desperate founders accept worse terms, but also to see if other investors join first, who might lead the round, etc. In QFlow’s case, the timeline was set from scratch, and investors who did not take it seriously missed their chance.
Valuation Strategy
Following our Bootcamp’s recommendation, the team let the investors price the round rather than disclosing their valuation expectations. As is often the case, the first two term sheets they received didn’t really come close to the number they expected.
By tracking access to her data room, Brittany could tell those investors hadn’t spent enough time analysing the business, which was a red flag. However, knowing that the market has been tricky, she couldn’t help but wonder, “Is this all we’re going to get?”. Taking a step back, she discussed the situation with their board and, together, they decided to stay put:
“We considered [the term sheets], took them to the board, and said that we were not happy with it, but that we knew that the market was really bad at the moment. Since we had runway until the end of the year, we decided with the board to see what else we could get.”
It will come as no surprise that having enough runway changes everything, from how you position yourself, to your pitch, to what you’re open to accepting. In QFlow’s case, they had room to juggle and could afford to ask, “Is this going to help the business get where we need it to go?”. And with those two initial term sheets, the answer was clear.
They waited patiently, and a more reasonable valuation arrived in mid-March. If the first term sheets came from funds that did not fully align with QFlow’s plans for the future, this time around, the better valuation came from a more specialised fund, one they could benefit a lot from having on the cap table.
Once QFlow accepted the term sheet, Brittany spread the news. This is a deliberate tactic we share in the Fundraising Bootcamp to cause FOMO and leverage the interest of other investors, also serving as a friendly reminder that the funding round was drawing to a close.
With a good offer in hand, they began finalising the round following their originally proposed timeline. Despite their initial target of £6 million, QFlow ended up closing an oversubscribed round, raising £7.2 million.
Divide and Conquer
In contrast to their previous round, Brittany and her co-founder, Jade Cohen, had a different approach in the separation of tasks. In their first round, they attempted to handle fundraising responsibilities together while also working on the business, which ultimately proved to be an almost impossible task. Recognizing the need for a dedicated focus, they decided to divide their responsibilities this time around, which was a game-changer.
With Jade handling the business operations, Brittany could fully immerse herself in the fundraising process without being weighed down by other responsibilities and while tapping into her strongest skill set. It created a supportive environment where Brittany could dedicate herself entirely to fundraising, ultimately leading to a brilliant funding round, while Jade managed the operations and made sure to shield Brittany from the day to day challenges of the business.
Lessons Learned from the Fundraising Bootcamp
If we were to summarise Brittanny’s four crucial takeaways that influenced her process:
Timelines are Key: Setting and adhering to strict timelines ensured investors understood she meant business. From day one, she was straight to the point with investors: the exact date they would start their fundraising process, when the data room would be open, meeting availability, and when they would entertain term sheets.
The Power of Preparation: Harris prepared the whole strategy for the round before going to market Everything was defined when they opened the round. Their detailed data room and documentation pack impressed investors – Brittany was kind enough to share the structure of her data room in our exclusive community for Fundraising Bootcamp alumni. This community is where we aim to build a valuable platform for founders to seek guidance, offer assistance, and benefit from the collective wisdom of their peers.
Trackable Pitch Decks: Leveraging tools like Brieflinks, Brittany and her team could see what investors were most interested in their pitch deck and data room by monitoring the time spent on each section and then be able to focus on those points when having their meetings.
Trust Yourself: Saying no to the first two-term sheets they got took a lot of confidence. Harris was adamant about the need to trust in her deep understanding of the business and its potential. “Questioning yourself is extremely important, but sometimes you just need confidence in what you’re building.”
“If you got a business in a good position, reaching its targets, that’s really interesting [to investors]. We hit all the metrics we set out to. It wasn’t a question of “Can you do it?” anymore because we were already doing it. It was a matter of “Do you believe in our vision for the future?”.
Listening to Brittany share the journey of QFlow’s Series A fundraising round made us extremely proud of her efforts. In a truly challenging market, Brittany closed an oversubscribed round in just four months from European and US investors who are the perfect fit for the startup’s future. QFlow’s Series A story sums up so much of what we talk about in our cohorts, and hearing about its successful outcome is truly inspiring!
With the funding secured, Brittany and her team now have the opportunity to focus even more on decarbonising the construction industry. We’re excited to see what the future holds for them!
