Danny Done, CEO at GoBekli explains how his approach to fundraising changed in the post-COVID world and how he interacts with investors now. He also talks about methods that work for him now and those that clearly don't. For everyone who is trying to raise money now - this is for you:)
Danny's linkedIn: https://www.linkedin.com/in/danielarthurdone/
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Today is a guest speaker WebDAM Co, founder and CEO had to go back. We go back.
Lee was in the midst of it fundraising once they hit and in this episode we'll talk about how Danny adjusted to the covert, how he's approaching fundraise now on what his next steps are going to be.
So, Dave, let's kick off by giving us some background on yourself and on go back.
Yeah, absolutely so kind of long story short. I always wanted to be an entrepreneur and build product type businesses, but during the last recession got sidetracked and ended up starting a marketing agency.
And, uh, after about 8 years of of working on that, through the highs and lows, I ended up finding that partnerships with other agencies was the most profitable way to go.
And I got really interested in how virtual teams can collaborate and act as 1.
So, as I was no longer really needed in the day to day side of the agency, I started focusing on that, and finally decided to actually sell that in order to pursue the venture of pursuing this idea full time.
So, this time last year I had completed the sale of my agency. Took a few months off and decided to do a a road trip actually.
It was kind of exploratory where well, part of it was explained to the national parks and enjoying all of my time off. But the other side of it, I ended up meeting with people really?
From Florida to to Austin, Texas as potential investors, potential clients.
And that was all kind of in the February early March of last year and it was pursuing this idea that I had kind of.
Wanted to dive into that.
You know, can can we re, approach that? I guess I can I thing sure. No problem. Do you want to do you want to start over a whole part or just that particular section?
Let's just restart the little section there because I need to bring my Co founder into the conversation. That's kind of the work. Yeah, yeah. Yeah.
So, as I was, considering to sell my agency last year, I had quite a few friends who I was meeting with coffee with and discussing the ideas that I had. And 1 of my long friends who I had been in contact with for about 10 years.
I had met with him and told him about the idea and the concept.
And i1st met him when I was interviewing for a job at his start up back in 2009.
And I actually turned down the, but wanted to keep in touch and build a friendship with him, because I really respected his technical entrepreneurial, entrepreneurial experience. And so he and I met for coffee in in that summer.
And at that point, he said, hey, when you do this, I want to cofound it with, you.
So, starting in January of this year, I started taking meetings between Miami to Austin everywhere in between.
So, that's where I happened to be at the time and we were prospecting this idea. And at the same
time, uh, finalizing the, the legal work and paperwork for founding.
Under the vision of helping virtual teams, collaborate, better and and work together better.
And as we did that, we got a lot of great feedback, but.
That was, of course, when cobit hit, I was actually in Austin, just the South by Southwest was shut down.
And that was the point where we really took a step back, we had literally just finished our paperwork.
Uh, you know, to incorporate maybe a week before Kelvin hit.
And I was having 3 or 4 meetings with angel investors per week.
And at that point, we, we just put everything on pause for a few months while we kind of persuaded to see what what was gonna happen with cobit.
But also, with all the input and advice, we had gotten in the in the 1st month or 2, a lot of product updates that we had to work on. So.
We ended up kind of knuckling down all the way until June, working on the product with the input and advice that we had gotten in those 1st, few weeks of prospecting.
And then ever since then, just since January, we've been meeting with a lot of potential investors generated lots of interest, but certainly people are shy.
To put the money for these days and so it makes the approach very different. So we've done a lot of experimentation, you know, at different techniques. And now we've got about 100 angels who said they love the idea and are interested in investing in a later stage.
Current pipelines about 30 people deep in active conversations.
And really kind of got it down to a good science, but at the end of the day, I'm a fundraising rookie.
I have built an exit or a company already, but it was bootstrapped and service space business. So this is my 1st time.
In the fundraising game, and in the, and then the product game. Really? So, I'm happy to share my experience so far.
And I do have a a few tips of things that are working so far with us. And I'm very happy to share that with whoever needs those tips and tricks. But also, you know, just share some encouragement with people.
Perfect encouragement definitely can help and by the way good luck to you in that fundraising process, but 1st, question is going to be, how will you find those investors?
So you said that your mean, like, for investors per week what's the number now? Are you actually, are you still meeting people?
I mean, not in person of course, over zoom and major question is how do you get in touch with those people Pre cobit versus post.
Yeah, like everybody I initially started with my close network and then from there started, you know, try and go through crunch base and other websites that list angels in particular.
What actually worked back in Pre coded and is is working now with a few adjustments is.
I am on LinkedIn every single day, and I have quite the extensive network now, but back in the day, used to just do kind of a shotgun approach and, you know, look for anybody and everybody.
You know, who had angel or BC and their name, and then tried to land a meeting with them. Today, you know, that that really is not effective.
I find those conversations tended to fizzle off really quickly, so just making sure that you're using good search criterias in order to narrow people down, based off of number 1, do they make investments number 2?
What kind of investments do they make? Are they early stage preceed in my case and number 3 do they have the right industry focus? So what your company is is relevant to them.
The kind of on the matching side of things I've really had really discovered that it's.
Important to craft your profile so that it matches the angels or angel groups sometimes that you're going after.
So, in in creating my LinkedIn profile, I wanted to make sure that the messaging was on brand and on point for the, the type of business.
That we're doing and what stage we're at, so that that's super clear and what value it brings so that.
When people see a request from me, it's typically about a 30 to 40% acceptance rate that I get.
And then I'll follow that up with with a message that.
Just ask, you know, if they're interested in looking at an early stage startup within my industry, and just a simple question like, that is clearly human and respectful.
I do no automation whatsoever just because I want to make sure I understand every single profile. I'm looking at and have a reason for reaching out to that person in particular.
And I don't reach out to people more than once. It's, it's 1 message. If they see it great. If they don't see it, then we move on.
Um, I had tried different methods of being a little bit more broad and, like, a shock and approach that really don't work. I applied some of my, my.
Marketing automation experience in some of my earlier attempts.
And just the, the results on what would work marketing, even a direct marketing standpoint to angels, to just does not sync up with them. It lives the authenticity that's needed.
Sprint prayed definitely does not work in the fundraising games so. Is that on my side or on your side? I don't hear anything.
Hold up a 2nd.
Okay, my bet there was.
Somehow I enable the message read on our team channel and.
Like, I'm hearing someone talking, I'm like, wait, what is going on. Oh, my bet. Um, where were we.
No Spring Branch, right? Yeah. Yeah, definitely. Spring Pre does not work in the fundraising space and.
1 thing that I want to ask you here is and 1 thing that I probably disagree with you is, why do you only reach out to person? Once in my personal experience sometimes it takes like, 2, 3, 4 messages to actually get.
In touch with that person, because they have just like, seeing number of messages coming in and they might just, you know, didn't might just not know is your message, why don't you do multiple.
Yeah, I mean, a couple of reasons so 1st of all, they're the people who you message once, and you don't hear back because they haven't read it and then they're the ones who have.
So, the ones who have, I typically think I only have 2 shots in order to approach these people and that could either spin my 2nd shot now and seem desperate, right?
Or I can do it at my next iteration and tell them that there's been progress since then.
And with those people, there's some important to notice is that on there are red receipts no matter what. And so you could tell if somebody has seen the message or not. And what I do is, I just give him the opportunity to say, yes.
Or, no, that's not a big time investment. I don't even tell them about the product.
I simply say I'm in your industry. I'm early stage. Are you interested in looking at what we have to offer right?
And so it's a question which requires engagement, which, you know, of course, being marketing guy, you know, we always want to lead off with a question that directly relates to somebody right and gets them hooked. So I do get typically.
You know, 3 or 4 responses from every 15 messages that I sent out.
And those, those messages tend to be 50, 50, either yes. Or no.
And when somebody does say, yes, rather than trying to cram everything into a LinkedIn message.
Um, I tried to move them off of LinkedIn as quickly as possible so that we could personal LinkedIn is difficult to manage your your messages and search and flag and and move into your to do lists and all of that. So, it does get lost even if you're in the middle of the conversation.
2nd of all most people are looking at LinkedIn on their phones so they have very limited text bandwidth to, to go off of.
what I've done,
which is a little bit different is my partner he had,
successfully raised a seed round for his startup back in 2009,
which was a totally different environment equally as challenging. Um, but, you know, back then he could meet with people in person.
And my initial strategy was to be traveling really across the U. S. and meet with all these people in person. And, of course, Kobe completely change that.
So, what I did instead was I took my skills that I have in my back pocket, and I built a private website that's exclusively just for investors and I created 4 different decks.
1, 1, for the primary deck, 1 for the brand, and the mission 1 for the product overview, and the other for the company roadmap, and then supplemental documents under that and I put them all on 1, single page link so that I could send those to people.
And that has been 1 of the most effective effective things that I've done because it moves the conversation so much quicker.
Um, if I was trying to get a zoom meeting to explain when I wanted to talk with these people about.
Man, you got the back and forth and the scheduling and then you finally land that meeting and then you find out either they are, they aren't interested. They're kind of soft interested and.
And all of that, what this strategy has done for me, has allowed me to move to the next step very, very quickly. I would say.
A little bit less than half of the people that I send this link to will get back to me and say.
This looks cool. This is an amazing presentation. It's not quite the right fit for me. And let me refer you to a friend.
And then the other people, they say, yeah, let's book a call. Of course, they're, they're all.
The percentage of people that I send it to, and then never hear back from and so I'll try to follow up with them once a week. And then after 2 weeks, there's nothing I'm going to assume there was no interest and move them off my pipeline.
Right, so next question is, where do you find those investors and you mentioned that they're those are you are looking at multiple factors prior to reaching out to the best ratio hourly then best is when was the most recent investment, et cetera?
Where do you find all those things to actually.
Major research across all different platforms like crunch base, Angel list.
Just basic globally, or is there some particular a particular.
Resource enjoys commands. I use all of those.
My primary is definitely using LinkedIn search filters and I tend to get far more information a lot faster that way angel lists and crunch base often are fragmented, or some of it is behind a payroll. Now.
And then, independent Googling does get you where you need to go sometimes. But it takes a lot of leg work.
I have spent in some cases, like 2 hours, just doing the research to find a person at a company with somebody on an executive level, who has a history of angel investing and right. Alignment.
From the outside, looking at company research through Google, and then narrowing it down based off of that.
And those meetings are fine, they, you know, a lot of the time, you know, those, those people are not self identifying. And I think that 1 of the important things for us to realize is that we live in an age where people must self identify what they want.
And that's what we used to, right? And it kind of goes into the dating world, right? You've got everybody on on Tinder and Bumble, right?
And so difficult to find a relationship of any kind just through organic circumstances, not to mention during the times of cope it. Right?
So, what I'm essentially doing is is creating a self made algorithm, right? That matches people up the same way that Bumble might do. Right?
Um, in fact, there is, you could use Bumble for business, um.
I did try that once it's it, I mean, you get a meeting, but, you know, the value is questionable. Bumble for D. what Bumble for business.
Oh, Bumble for business what do you mean by that? So there's 3 size the Bumble there's the dating Bumble app. There's the Bumble faff app, which is refining Platonic friendships and then there is the Bumble business app.
And the Bumble business app matches you up to network with people based off of your business interests and aspirations.
That's really cool. I had no clue that Bumble for business existence. That's really interesting. And I'll check it out after them, because always over just yeah just out of curiosity. At least. Yeah. For sure.
But let's talk about things that did not work for you in the past. So you mentioned that spray and pray or gun shy and didn't work. Is there anything else you would highly recommend failures not to do while fundraising?
the the thing that I did that really didn't work was,
I tried to go full on marketing automation unless building I have over a 1000 people who I have scraped their email addresses off of my 1st degree LinkedIn connections.
And then created, like, automation templates in order to pitch and nurture these people. And I feel like that was a big turn off.
I think that people felt like I was not authentic, wasn't genuine. And that the relationship I would have with them in the end would be part of a cattle call.
And so there, there is some level of automation that's okay. Like, you know, the 100 people that I have on the list to say, they, they love the product.
They want to see deeper validation and and stronger, more developed product.
So, they're kind of more ideal for a late seed around.
So those are the people who have requested to be in touch every month or 2, right? And so that's okay to just, like, have, like, a little newsletter right?
But, you know, when when you're pitching, it's gotta be super personal, Super related to who they are.
What they do, and why they are the ones that not only can bring you value, but we'll receive value from being a part of your venture.
Right, right so now let's move on to the budget plan. So how much you're raising and why. Yeah, so our seed round, uh, so.
Technically, this is a Pre seed round where pricing it at a lower valuation cap.
My I be my 1st time raising funds, I really was completely unaware of how to price things. And what the terminology is and my Co founder.
He also back in 2008, the, the idea of preceed was just simply called friends and family RAM.
However, he and I do not have friends and family that can help us raise the amount of money that that we need. So, the total that we're raising is 450.
And that's for us to basically release a private beta version that will prove validation for the later seed round that's coming in.
So, the 450 is what we need for development plus operations, sales and marketing to bring in about.
You know, the a number of users that are needed in order to prove that validation. So that we can can, you can continue to the full fledged version of what we're building.
Mm, right? Perfect.
Next question is about you have the plan badge budget and you start fundraising question is when did you decide that? Now? It is the time that I need to go out to investors and actually get some money to proceed with my business.
When was that moment? Did you generate any traction prior to that or what was the decision making point? Basically.
Well, we knew that we needed investors when we made the commitment to work together, given the scope of what we were trying to do.
However, the exact amount that we knew, we need to raise, didn't really become clear until about May. So, about 4 months ago, 5 months ago on that.
Can't really do math right now and go backwards. But what brought us to that really is, you know, with with 2 Co founders.
I'd be more of a sales and marketing background. I'll be it. I also am a full stack word press developer. That doesn't help us here.
Which leaves Brian, you know, all on his own to do 3 or 4 people's worth of work. That would take them 3 or 4 months.
The extent of that just really didn't make economic sense, not just for him, but we would end up with a product. That was clearly sub par. So we had mapped out what this early beta proof of concept.
Nice needs to be in functional added score and with him being very experiencing managing development teams is fairly easy for him to price out and understand the human labor that's involved in doing that.
So, we, in order to build things correctly, we wanted to find out exactly what the costs not just from a development standpoint, but also a user acquisition standpoint, even though we're doing a, a private beta.
We needed to allocate the dollars to get those users and and retain and engage those users so that they could be the, the little Ember that starts our bonfire here.
Right. So now, let's talk a little bit more about it and how it affected your fundraising process in terms of would you include in the beach deck?
So, a lot of the investors I interviewed in the past couple of months post said that, you know, if they don't see anything Colvin relate and how is your startup tackles?
Uh, you know, adapt it to the new situation, basically to the new environment, the generally pass on it. So, the question is how much of the time how much how many slides on your pitch deck are dedicated to how your business was transformed by cobit or.
How much time does found that basically.
The whole thesis of the business changed because of covert that's 1 of the reasons why in March April May till June we really went back to the drawing board. Initially. It's like yeah. Okay.
Collaboration between teams that aren't technically integrated. That's that's 1 thing.
But we were originally going to take that just to marketing agencies and kind of focus on that particular niche. 1 of the feedback.
Big points of feedback we got was that a subset of our product was more useful and had broader applications than what we imagine.
And so basically before coded our our thinking was too small.
And then as we hit Kobe, we realize that.
Everybody can can use this idea if we pull the secondary feature and put it in the front.
And so that really kind of made us rethink how.
Really why, you know what we're doing and the, the bigger challenge wasn't just doing that, because it was basically the same similar solution, similar technology behind it.
The difficulty that I had was finding a way to articulate it.
In a way that was so clear, so simple and that 1 took me.
Really until like a month ago and that's what really kind of I feel like, gave me the best traction.
Was you know, when, when we finally, you know, said, hey, we are looking to transform the future of work.
And we are a future of work, start up and then we explain how right and how we help each, you all the users managers and the HR directors, you know, make the future work better for everybody.
And so now that's the 1st thing. They see on my LinkedIn profile that's the 1st, that's the 1st thing. I message them. That's the 1st title. They see on the on the private link.
I send them that's the 1st thing they've seen on the 1st page of the deck. They see that we are here to provide a platform that enables.
Far better teams to form in this new era of work and so really, you know, that's reflected on every single level.
It it wasn't just this small, little niche, any more of like, you know, hey, let's help marketing agencies, work together.
We say, let's help everybody work better on virtual and remote teams through this solution that we have developed.
And when we simplified that down to, you know, this is a future of work solution. We people are thinking already they're like,
we need to see what this solution for the future work is because of Kobe it's implied now in the messaging as opposed to when we were kind of wandering in our messaging and getting a little bit lost and then technical weeds.
Got it so, 1, more thing I actually forgot completely to mention is the backgrounds in sales so you mentioned that.
Shortly, but the question is, would you recommend any other founders search? We put.
Quite some time into learning sales into actually practicing sales prior to join, or starting a start up.
Yeah, yeah, those from our Pre interview, we were talking about my background.
My 1st job straight our college I got really lucky, even though it was September 2008, middle of the crash, right?
And I couldn't find any job on monster or Craigslist or whatever. So I had a list of entrepreneurs that I really respected in Seattle.
Or I was living and I just sent Facebook messages to them and I started working for literally the guy that was the top of my list. And he asked me after, like, 2 months. He was like, what do you want to do?
When you? Because I was 20 years old and and I was like, I want to be an entrepreneur.
And you want to do what you do, and he's like, well, my, my investors, you know, and I have been friends since we were kids and they never trusted me with with their money until I had at least 10 years of experience.
And I was in sales at real networks and what I did. And so if you want to be an entrepreneur, what you need to do is you go out get sales experience.
Find a need and fill it and then he told me I didn't need to come in to work on Monday and told me go get started doing that.
So, yeah, yeah, it was it was a little rough, but honestly, like, you know, depression aside right and frustration aside it, it was by far the most valuable experience.
I was in sales for 3 years before I started my marketing agency and with the marketing agency essentially what I did was sales, I brought in the clients, and then I hired the teams to fulfill it and.
And, you know, the account managers and the managers over them, right? But I would just bring them in.
Right and, you know, even even then, you know, selling marketing services right? A 1M people sell marketing services. Right? 1M people on LinkedIn are hitting your about marketing services. Right?
So, it was more of a question of saying, like, how are we going to do things in a way that's different.
That really matters to our target market and then how do we match that up? And that learning process learning to.
Adapt and reframe is so important because.
Yeah, there's, there's important disciplines to sales, right?
You know, there's a prospecting, follow up, making sure that everything is in the order. Not worried about the nose.
But I think the, the more or the most important thing is to have a good product, right? And, you know, if you have a good product, right that is totally in alignment.
Then, you know, eventually the sales start coming to you. Right?
And, yeah, it's important to have all the technical stuff dialed in, but as I'm.
As a salesperson, I definitely had that frustration working for other companies. I had that frustration of never selling the product that I wanted to sell. Right?
And then when you, when you found a service business, you know, even if it's a marketing agency, you get the chance to listen.
Right and then make adjustments to what you're doing and how you phrase what you're doing. You know, 4 people and, you know, that.
That constant self evolution is so essential I think so that you aren't just building the product that you want and then.
And then wondering why people aren't buying it, right? It's about listening to the customer and then understanding what it is that they really, really want. Right and then you build a tool that does that in the easiest way possible.
Where you build the service that, you know, does that in the easy, easiest way possible right? And that takes a certain amount of intellectual humility right?
And, you know, understanding that sales is about service, it's about understanding the needs of people and being able to take this thing right and present it to that person in order to solve their problem.
And I think that that's something that some people are naturally gifted at and some people aren't but at the end of the day,
it has to be practiced and that's a skill that has to be truly cultivated and on the kind of 2nd side of that is when I was told.
Uh, the sales experience find and even fill it.
That's how I started that company was through sales experience. You can find the need right? You know, you start at the bottom. You you talk to customers.
Every single day about what they truly need, what they truly want.
And you understand what their problems are, what their experience is and then before, you know, it, even if the product you're selling, you know, for your boss isn't working, maybe you see what product really would do the job.
Right, right. Really good points here. And on those good points, we're moving onto a last question of today's episode, which is a.
Call to action. So Danny, what's the 1 thing you want to do? As soon as the episode is over?
Well, again, like I said, I'm the recession rookie here. I'm sure there are plenty of people who are so much more experience so much further along than I am.
But I'm also the guy trying to raise my 1st seed round in the middle of the 1st pandemic in 100 years.
Where we can't actually meet with people. So, uh, you know, my, my advice to other people is that entrepreneurship is about the survival of the most adaptable.
And, you know, it's, it's so important to hold what you're doing with an open hand and not be afraid to listen to people's input and ideas, you know, especially when it comes to the product, but also how to go about what you're doing.
And then the 2nd, 1 is, you know.
This is, this is a long haul game, you know, it takes in dirt, you know, I'm still in my early stages, you know, even though I've been doing this for several months now, and it's hard and that's okay.
So, you know, I want people to know it is an endurance game, but keep the faith get up every single morning and have a routine about what, you know, needs to be done. Like, every single day when I get up.
I have a checklist of what I know needs to be done as far as outreach and follow up refinements on what we're working on from the day before. And.
You know, if you let that pipeline die down, right?
Conversation stop happening, then you have to boot up all that moment to make that.
Right. So, you know, just like, you know, understand you yes, you have to be consistent and it's going to feel sometimes, you know, I've had 1 or 2 weeks where I've had no meetings at all and you just got to keep on pushing through.
Because eventually, you're going to you're going to learn what needs to be done. You're going to find the thing that works for, you.
And you're going to get you're either going to get the momentum, or you're going to stagnate and die. It's kind of like, you know, swimming you got to keep women.
Move forward right this is a what's a positive note? So we'll wrap it up here and my personal cultivation is going to be 1st of all I'm going to leave a link to go back of course, and the description of this episode.
So, if you're curious, definitely check it out and I'll also leave a link to the type form where you can just include your information in terms of information about your start.
And I will connect you to the, to my network of investors and divisors. If I like you, of course, so definitely take a look into the description, find those links there and.
Have a good day.