The courage to continue — learnings from Sounding Board’s fundraise
“Success is not final. Failure is not fatal. It is the courage to continue that counts.”
I have this picture on my wall in my home office. I put it up when I setup my home office, a few weeks after we canceled our office lease for Sounding Board. It was a comforting reminder through the challenging early months of Covid-19.
At Sounding Board we often work with people and learning teams. In 2020 we saw firsthand the stress and crushing workload people leaders were carrying — between remote work transitions, civil unrest, restructuring and a health crisis unprecedented in modern history. With all the sudden change, it felt like I needed to brace my team for what would likely be our toughest year yet.
I certainly didn’t expect that in the first quarter of 2021 we would be announcing Sounding Board’s $13M Series A. Not only was it the shortest process we’ve run, it was oversubscribed, and we partnered with respected investors like Canaan and Correlation who are thought leaders that have backed and built category-defining companies.
There are a lot of stories out there about “capital everywhere”. But the data still shows that there is a Series A crunch given the large amount of seed funding that has been available to entrepreneurs over the last decade. And for female-founded companies I don’t think fundraising is ever as easy as the media would have you believe.
While our recent process went smoothly that certainly hasn’t always been the case. My cofounder Lori and I bootstrapped the company initially —and I was pregnant when we started. We got rejected by YC and pretty much every accelerator we initially applied to. I never felt my experience mirrored the linear path I read about in the press.
The fundraising advice out there always felt simple to understand but hard to execute: “raise when you don’t need to raise”. “Be confident”. “Sell a big vision”. “Run a process.” The last one especially made me laugh because my fundraising processes always felt more like herding cats or some distorted version of high school dating where you never liked each other at the same time.
There are plenty of articles out there on the mechanics of raising funds, securing warm intros, sequencing meetings and how to respond to investor questions. Check out Mark Suster’s posts for a great series that breaks down the process. This is not any of that. Since announcing our raise I’ve had a lot of founders, particularly female founders, reach out to learn about our process. This is about sharing my experience as a founder and some of my learnings, in the hopes that other founders see that there isn’t just one path or one way to funding. As our investors Roy Bahat and Minn Kim at Bloomberg Beta always like to say — #thisisnotadvice.
Hang up, Call Again
Almost every investor we’ve brought on at Sounding Board initially passed. Even when our metrics spoke for themselves and we tripled YoY. I think that’s the hardest lesson you learn as a founder. I always thought that as long as we got to our metrics that fundraising would go smoothly. The truth is that for 99% of startups, it’s just hard. And you’ll hear a lot of no’s before you get to a yes. In fact if you can’t create relationships with investors that reject you, you’re probably dramatically lowering your odds of getting funded. Learn from the no’s, and build relationships with those that you genuinely believe are “not yets”. Hang Up, Call Again.
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Stay the course and remember it is a process
As frustrating as it was to hear that advice from others, it really was one of my most important learnings. As founders we are always navigating uncertainty. Startups by nature are unpredictable. The key is not to let the uncertainty impact your own belief in the bigger vision and opportunity. There will always be risks and unknowns — but the more I stayed resolute and confident in my demeanor, the more it energized our conversations with investors. This is one of the most challenging things to do during a funding process because most of the time you’ll be hearing no’s. How do you learn from the no’s but not let them impact your morale? Find ways to disconnect or break from the process in small chunks — exercise, phone a friend, etc to help you rebuild pipeline or re-energize before the next pitch. And remember, fundraising is a numbers game. Shift your mindset to see that no’s are just a part of the process rather than anything personal.
Back to the Future
A big, clear long term vision might be the most important thing you focus and refine as a founder.
Because, as simple as they end up sounding, it takes really engaging with customers and learning your industry to distill that vision down into something straightforward. For us at Sounding Board — that meant focusing on leadership development for business outcomes. And articulating how our startup was going to transform the way companies enabled coaching at scale through our unified platform.
While our business growth got us to the table — the conversations that got investors the most excited were the ones where we talked about where we could go with the business in the future. The more insights into how we thought about the market, our differentiation and WHY we made the decisions we did, the more trust we developed. It’s counterintuitive because as a founder you might think you have to present the right “answer” to investors. In reality you need to demonstrate conviction of your vision and stand by your own thinking.
Oh what a difference a team makes
Fundraising is a full-time job and pitching is like writing a comedy skit. You might only be on stage for a 15 min set, but all the lines have to hit. This makes adequate prep particularly challenging in the early stages of a startup. As founders you are still operationally involved in running all the day to day. And not likely to have a fully built out executive team — after all, that’s the point of the raise, right?
If you don’t have a full-time team yet, find advisors or mentors to help. And think about hiring senior talent as early as you can afford as the right team can give you wings. My co-founder Lori picked up all the slack of internal operations. Our head of product Piyush led our product and engineering teams to launch new products like group coaching and a redesign of our agile coaching platform, and Tommy, our sales leader, completely took over sales and customer success.
Our core fundraising team spent 6–8 weeks and hundreds of hours building decks, models, pulling data, revising, testing and practicing before our first pitch. We brought on additional resources to help with modeling, diligence and deck creation. And we would reconnect after each meeting, calibrating and making adjustments based on feedback and what we learned. Others might not have had to do as much but that’s what it took for me. And I couldn’t have done that without a strong team around me.
2020 was a really tough time for many, most notably female founders and female executives in particular. We feel grateful that we wrote a different story for ourselves at Sounding Board — and recognize that with every funding round there is always a bit of luck that plays into it as well.
But we also know that we have worked really, really hard to get here. No shortcuts — just one foot in front of the other — the courage to continue. To those founders out there pushing — keep going. To those that were with us since the start, thank you. And to those joining us now, I can’t wait to see where we take this next.
Onwards and upwards!