“Always be fundraising.” We hear Incite and Mill’s Co-founder, Matt Rogers, say this over and over again to founders in our portfolio who reach out for fundraising advice. But how can founders translate this into action? It depends – because fundraising can look drastically different depending on a company’s stage, needs, and the capital environment. To help those of you navigating these choppy capital waters, we're sharing some of the best insight and advice from builders in our portfolio who have strong fundraising track records across venture, non-dilutive grants, and debt capital.
Dulcie Madden
is Co-Founder and CEO of
Dig Energy, Inc.
Dig is on a mission to unlock the potential of distributed geothermal energy for billions of people around the world. Dulcie shared her experiences so far raising seed capital for an early-stage, technically challenging project.
As a hard tech founder raising seed capital, what are the most important actions you’re taking to set yourself up for a successful fundraise?
- Leveraging our Network. We’re continuously iterating and fine-tuning Dig’s pitch to resonate with different audiences, both technical and commercial, through feedback from strategic advisors, subject matter experts, investors, and ecosystem partners.
- Sharing our Why. We try to layer our “why” authentically into everything we do. At the earliest stage, investors are largely betting on market, tech potential, and most of all, TEAM. They want to know why we are uniquely positioned to solve this problem and that we’re committed to the journey.
- Knowing our Objectives. Knowing our Numbers. We’re making sure to be super mindful of our cash outlay to achieve necessary milestones as we kick off the fundraising process. Having a deep understanding of our financials demonstrates to investors we will be a good steward of their capital.
- Demonstrating Progress. The greater the technical validation we can show, even if it's lab/shop level, the more enthusiastic we have found investors to be. Given diligence processes can take months, we are showcasing our progress to date and commercialization roadmap in early conversations, and then following up with how we’re executing on it.
- Doing our Homework. Time is one of our most valuable assets. We continuously gather intel from any current investors, founder friends, and other resources like Pitchbook, on which funds are actively investing, who is leading, who is following, and who is waiting, so that we’re getting in front of the right investors.
Jeffrey Engler
is CEO of
Wright Electric
. Wright is decarbonizing airplanes and ships with the world's most power-dense motors, generators, and batteries. Jeff’s venture is a long-term, complex undertaking and he’s unlocked a variety of different types of capital including lots of non-dilutive government and research funds to advance Wright’s important mission.
How can founders be creative with identifying other sources of funding (grants, project finance, etc…) and how do you suggest they approach these non-traditional opportunities?
- Don’t Take No as an Answer. If it’s the right grant opportunity, recognize that sometimes one needs to apply for a program multiple times or apply to multiple programs, before securing funding. Everything takes longer than expected.
When capital is tough to come by, what are some strategic moves founders can make to stretch out their runway and make the most of their capital?
- Have a Singular Focus. Spend slowly, so you don't run out of money during a downturn. There's the story about the monkey and the pedestal - reduce the aperture of your goal to what you can accomplish, and then execute above and beyond. Start by proving out the hardest part, and ignore everything else, and then move onto the other challenges.
Matthew Rogers
is Co-Founder and CEO at
Mill
.
Patrick Dixon
is Head of Commercialization and Corporate Strategy. Mill is building a smart kitchen bin to keep food waste in the food system. Between Nest and Mill, Matt has raised over $1B in capital from a variety of sources to launch consumer products and build businesses at scale. Pat was previously a Managing Director in the Consumer Group at UBS and has advised on over $50B of M&A and capital markets transactions.
What should founders do differently to set themselves up for success during late stage rounds? What advice would you give founders who are considering venture debt as part of their fundraising strategy?
- Always be Fundraising. The best time to raise capital is when you don’t need it. Assume any capital raising process is going to take at least 6 months from start to completion, so try to bring in your next round investors in a previous round in a small way. Obviously, you can’t always do things that way. But when you’re able to, it makes the ramp up so much faster if they’re already bought in, they believe in the mission, and they’re getting updates along the way. Then, when it’s the right time for their fund stage to come in in a big way, you’re now ready as a company to meet them where they are.
- Upfront Preparation is Critical. Before you start speaking with investors, make sure that you have information ready to go as soon as they are engaged. Develop a crisp teaser and investment highlights email for outreach, a comprehensive management presentation, and an excel model with detailed assumptions. One of the biggest mistakes companies make is starting to have investor dialogue before they’re prepared which causes them to be reactive. This will slow down a process and give a negative initial impression that you don’t have things in order.
- Venture Debt for Runway Extension. If you’re going to raise venture debt you should start immediately after you close an equity round, as lenders’ committees will need to see 15-18 months of runway without their capital. When choosing a lender it is important to find someone that you feel understands your business and will be a good partner to you - especially if times get difficult. Make sure that your plan is solid and achievable, as venture debt will almost certainly come with milestone-based draws.
Remember that investors are more than just backers; they’re people. By sharing your mission, communicating authentically, and building genuine connections, you’ll find the right partners for the long-haul. Because in the unpredictable journey of company-building, having the right crew in your corner can make all the difference.
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