Founders Factory Startup Bulletin #4 (November)
Soft skills for raising capital, coping with failure & more
“Created for founders, by founders”
👋 Welcome to the Founders Factory Startup Bulletin. Each month, we bring you a round-up of startup and investment stories, key learnings from founders, and insights from the Founders Factory team.
In this month’s newsletter:
Soft skills and tactics you need for speaking to investors
My first company failed—here’s what I learned
Our top reads—from top investors for female-led companies, to how to test your MVP
All the latest fundraising news, product launches, and investment updates from Founders Factory
💡 Key learnings for founders
Speaking to investors can be a source of fear or dread for founders—but it’s something you can’t get away from doing. In essence, you’re selling something, whether that’s a vision, a product, a fully-formed business, or even yourself as a founder. But sales are very subtle: you need to tap into heuristics and unconscious biases that every investor has.
Darren Mulvihill, Founders Factory’s head of venture, and David Hickson, FF Chief Strategic Development Officer, reveals some of the things you need to pay attention to when speaking with or pitching to investors:
In any storytelling, authenticity is everything: the audience has to believe in what you are saying. Too often, founders prioritise delivery and perfection over authenticity. We’ve seen founders hire speech writers and acting coaches to deliver Oscar-worthy speeches, which instantly fall flat with investors.
Instead, focus on being the best version of yourself, embrace the quirks of your personality and build that into your pitch—investors far more likely to invest in someone they perceive as authentic.
Passion and confidence
Passion demonstrates to investors that you’ll be able to bring people on a journey with you—in terms of building teams, getting investors on board, and growing your customer base.
First, demonstrate your passion and expertise in the industry or sector you’re building in so they’ll believe that you can build a successful business in that area. Back this up with confidence in your idea: say ‘this will happen’, ‘this is where the market is going’, and use your data to back this up.
Practice in the wild
Just like stand-up comedians do ‘work-in-progress’ gigs to test out their material on real audiences, you should try and recreate as realistic an experience as possible when practicing your pitch. Ask friends or colleagues who you trust to give you honest, unfiltered feedback. Or even better, set up meetings with investors who you don’t think you’ll raise capital from purely as a way of practising and getting accurate feedback.
You’ll need to be able to read into investors’ tone to understand if they have queries or objections to your product. Just as with stand-up comedians, the audience isn't going to tell you explicitly whether your jokes are good or not. This can often be very subtle, so you need to have an acute awareness of this.
Know how to adjust your tone
Every investor you speak to will be different—so you need an awareness of the nuances of what they’re looking for and adjust your tone accordingly. Angels may be looking for investment opportunities to create or elevate a product that they want to see in the world: they’ll be looking for passion and emotion to motivate their investment. VCs, however, may be more interested in understanding the returns on their investment, and therefore will be more driven by data.
Before any conversation, know who you are speaking to and think through what they’re going to be looking for.
To find out more about how investors think, and for the full list of skills, read Darren and David’s article
🧠 Founders Insights
Damian Routley, startup founder and Founders Factory Chief Commercial Officer, experienced the highs and lows of entrepreneurship during his first venture, Glow. The process taught him so hard truths about founding your own company, as well as the toll it took on his mental health.
Ten years on, here’s some of his advice for his younger self:
You already have a clear articulation of the company’s vision, mission and strategy
Now obsess about everyone’s objectives, and make sure you implement the right communications architecture such that information and accountability flow to the right places. Once this is in place, manage your team by numbers (but with your abundant empathy and humanity), holding people to account for the output, driving alignment, and pay close attention to results
Slow down to speed up
Don’t overstretch the elastic that binds your team together for too long. It’s not wise to keep running after market demand - you have to bring everyone with you and watch for their stamina.
The team that got you here, might not get you there. And that’s ok.
Approach new hires with the mindset you’re looking for role/profile fit for ~18 months, be clear with people that it’s unusual for everyone to be able to scale as the business does, and be fair but fast when you notice someone falling behind.
Get comfortable with having difficult conversations.
But know that it is still hard for me 10 years later.
🐦 Tweet of the month
📚 What we’ve been reading
Sales for Beginners: The Best Articles and Expert Resources (Morning Brew)
The minimum viable testing process for evaluating startup ideas (First Round Review)
💸 News from the Founders Factory portfolio
We launched our Mission Studio, in partnership with innovation agency Nesta, to build new ventures around home carbon emission reduction and narrowing health inequality (particularly targeting obesity and loneliness)
Black Ballad, the lifestyle platform for black women, and Fanbytes founder Timothy Armoo were featured in BBC Radio 1Xtra’s inaugural Future Figures list, celebrating British individuals who are “making black history now”
Property hunting platform Search Smartly announced their partnership with mortgage provider Trussle, helping users research mortgage options in minutes
🗓 Opportunities for founders
Power to Black Founders (December 7th, London) - this Founders Factory event brings together black founders with top VCs and investors for 1:1 office hour sessions, business masterclasses, and networking
Startup Boost Series (November 9th & 10th, virtual) - jointly hosted by Hubspot for Startups and AWS, these sessions are designed for high-growth companies looking to learn how to scale their tech stack, sales, and marketing for better growth
See you next month 👋
What did you think of this month’s newsletter? Let us know what we can do better.
The Founders Factory Startup Bulletin brings you a round-up of startup and investment stories, key learnings from founders, and insights from the Founders Factory team.