I Raised £2.5m Seed Funding from Top Tier European VCs, Here's Why I Did it - Doc The Journey Ep 61

Yo. Back with episode 61, I've documented the journey. My dog office or officially Tokyo is on my lap. As always. I feel like this is becoming a recurring theme that I need to either work out with a therapist or decide what the fuck I'm doing with my life. And the podcast, or largely the podcast, because haven't made a video in like, I think two and a half weeks. Two weeks. The consistency I'm struggling with for a number of reasons, but that's not going to be discussed on this video. I'm going to try and keep it relatively short. I was going to make like a pitch deck to show you, like my thoughts on the screen, but I just ran out of time today and there's other things to do. So, yeah, Dr. Journey, episode 61, you can see by the title. Yeah, basically I raised two and a half million quid in seed funding for Space Goods back in December is when it closed. You might have seen it recently, like two weeks ago. Did like a bit of a PR push with it, which is kind of part of the game, I suppose. And I just thought I'd jump on here and talk about kind of why I did it, basically in the interest of transparency. Yeah, I feel like I can't really do this doc series without obviously speaking about things like this and. But at the same time I want to be careful, like what I say in terms of details and numbers and so on. But yeah, I raised two and a half million. That's in the public domain. My investors are in the public domain because it was on all the articles and so on. But yeah, I just thought I'd jump in and talk about why I did it. There's probably a lot more I could. That could be quite valuable about documenting kind of how I went about that process, how painful it was in certain ways and things I learned in the process, which is a fuckload, by the way. But maybe I'll save that for another video. I just thought I'd jump in and talk about actually what I did and I guess why. Firstly, I'll say obviously there's no right or wrong way to run a business. No right or wrong way to wrong way to run a startup. I feel like venture capital in general has become, I guess quite controversial, particularly in consumer in the past few years, I think largely because of so many cases of brands, consumer brands mainly, that raise a fuckload at ridiculous value that never had the unit economics or growth or revenues or profits to back it up. And there's many examples of that on like huge scale Like I guess the brain's gone blank. But to name a few, like Casper Mattress is One of the D.C. darlings that did that, I guess Allbirds who had a massive fall from grace. There's some smaller ones I'm not gonna mention because I feel like they might watch these videos that I can name the kind of in and around my own network in like London and stuff that I definitely know about that raised too much money and never really had the traction. So yeah, it's kind of. I feel like it's a controversial. Don't know if it should be, but I just feel like it kind of is in consumer. And yeah, just thought I'd jump on speak about kind of the main reasons I did it, I suppose number one and I was going to put this on a screen but I didn't bother to do it. So just bear with me. I'm reading this off a notes thing I did. I think raising money in general, whether it's angel or anyone, but particularly BC really comes down to what your goals are. Do you want to build kind of a lifestyle business that's not that big, which I've done like twice before, but I don't think it makes sense. I think if your ambition is to build 100 million pound revenue, and that's a very arbitrary number, everyone says 100 million. But you know, just to illustrate the point, if you want to build 100 million pound revenue business, I think you're more likely to align with raising money to try and do that. And for me I decided to go down this route because I do want to build a massive business and I felt like raising venture and from these investors in particular gives me a better chance of achieving that. So it kind of felt like a no brainer on balance. So yeah, that's kind of the first point I guess. Everything to do with raising money and how you run the business and what you decide to do and specifically surrounding venture capital, whether to raise in general or not, whether to raise from venture or not, I think just comes down to what are your goals. And depending on what your goals are, it will either make more sense and align with that or it won't. And for me I felt like it did on balance. So yeah, that's why I did it. I think the next thing is venture in my opinion. I'm not a fucking expert on venture capital at all. I mean I knew nothing about it like a year ago beyond just having heard of it, but I learned a lot in the past year, which I might make another video on Obviously spoke to a shitload of investors. There's a whole process behind that, and I'll say that for another video. But I feel like when there's an opportunity to build potentially a legitimate market leader in a rapidly emerging space, in a rapidly growing space, then it can make sense. And I feel like I'm playing in that space. I feel like I've got a brand that has that kind of potential, particularly as a UK European play. I mean, there's obviously much bigger brands than me in the space in America, but far less so in the UK and Europe. So I think when something's rapid growth, emerging market, high potential to build a market leader, then obviously more capital means more growth. Well, means faster growth generally and more firepower to do that and kind of get that market share in a key market. And that's kind of the approach I've had here and a large part of why I've raised. I think the next thing is just recognizing how you work as a founder. For me, I feel like I work better under pressure and with other people's interest on the line as well as just mine. I'm not saying this is why my previous business, business failed or didn't scale to levels I believe space kids can scale to because many, many, many other factors. But I do think personally, for me, obviously I raised a bit of angel money before and I've raised a lot more venture capital money. There's more people on the cap table now. I quite like that responsibility and I feel like actually that at the end of the day, I'm responsible for growing the business. But there are other. There's always been angel investors since day one. I feel like we share the burden a little bit, which helps, but also puts more pressure on me in a positive way because ultimately I'm the one that has to deliver. So for me, that works. I think for a lot of people it wouldn't work. You just have to know what makes you thrive or not, basically. And for me, I think that aligns with my personality, my work style, the way I'm motivated, what I'm driven by, etc. So, yeah, that's a big part of it. I think the next thing is the actual investors themselves. I don't know if they watch this or not. I know one of them definitely has watched some of my shit. I feel like it was a very organic and natural fit. I wasn't actively looking to raise venture necessarily, but I guess probably like most business deals or deals of any kind, whether it's investment, hiring, people working Together, co founders, other shit. I think the best ones happen pretty organically and feel right from the start. And I felt like I found the right investors. I met them like a year before they invested for the first time on a call. They came to me initially because again I wasn't looking to raise but then I learned about the space, I learned about their track record, et cetera, et cetera. And there are a few investors in the round, but particularly my lead investor because they were the first ones that came in. Yeah, I just felt like it was a really good fit and we shared the same ambitions and yeah, they've done it, They've done what I'm trying to do a few times in similar but different but highly relevant markets and particularly in Europe. And that is what I'm focused on. So I felt like it was a real natural alignment. I'm not just saying that, I mean if I didn't think that I just wouldn't make this video. But I am, I do genuinely think that. And that again felt like a no brainer to me. So it made a lot of sense in my opinion. Hopefully they think the same. I'm sure they do. And yeah, there was that, I suppose the next thing. And again, I feel like a lot of what I'm saying is going to have. People are going to have mixed opinions on this but again I'm talking about the investors that came into my round and now my cap table. Not all of them necessarily, not all of them in the world, I mean, but certainly the ones that invested in my round. I feel like there's a lot to be gained and for me to learn from their network, their experience and just the credibility it brings, I think that is definitely valuable. Even just hiring people now, it's definitely helped to have that backing and that credibility, you know, have their name on the cap table. So this will be fairly controversial to say, but I do think I'm definitely not there yet. But like there's a, there's a certain. I feel like there's a big difference between a bedroom brand and then kind of a darling D2C brand. And we've sort of seen that over the past few years where certain brands, even if they're not much bigger than others, seem to be regarded much more highly than others. And I think a large part of that is how they've positioned it. The investors, investors they've got on board, the team they've built as a result, the advisors they've got as a result. I suppose what I'm trying to say Is I think it helps to move my brand towards being one of those highly respected, highly regarded brands and challenging brands in the space rather than just being one of many in this space of which there are now. I think it gives me a better chance of being the brand in this space in my market, if that makes sense. So, yeah, that was something that I thought about a lot. And I guess another point is ultimately doing, you know, to do something I've never done, which is scale well past 10 million to 50 million to 100 million, long term, whatever ends up being. I felt like I had to change my approach and go from being really kind of solopreneur largely, you know, with freelancers and so on, but solopreneur mindset, owning the whole thing, doing a lot of it myself, to, yeah, just a different approach, you know, smaller slice for bigger pie long term. But also raising gives me and has given me more scope to bring more experience into the business in the direct core team, but also advisors, et cetera, et cetera. That I may have held off on a bit more had I not raised and had A, the capital injection, but B, the backing and confidence from people that have seen teams grow and get to that scale in other spaces with other brands in their portfolio. So what I'm trying to say, I guess bootstrapping everything again felt like it just didn't make sense. If I was trying to do something I've never done, which is build a much bigger business, build a proper team, move away from being a solopreneur. I felt like I had to do something I've never done, which is raising, looking at the business differently, thinking slightly differently longer term and thinking more long term in general as well. So, yeah, I feel it on balance, you have to choose, I think, particularly in consumer. Well, in any business. But I only know consumer as a founder, so I can only really speak of that. They have to pick a path. You either ultimately, in most cases, probably build a slightly smaller business or at least grow it slower. And that's not to say that's the case for everyone, because I've got my own friends, particularly one I'm thinking of who has been on the pod, has built one of the most insane businesses ever owns. The whole thing has grown even quicker than me, is a lot more profitable than me, and that's fucking great. But I just felt for my products, my brand, my vertical at this time, it made a lot of sense for me. So, yeah, that's the path I chose. I think it's the right one. I think Only time will prove that to myself. But yeah, there we go. I guess it's just a milestone in the journey really because it's quite cool to think that two years ago the business hadn't launched or even December 21, two years before I did this deal. It was just an idea and you can create something from nothing. It's kind of the alchemy of entrepreneurship. I mean it's obvious but sometimes you're so stuck in the day to day you don't think about. It's pretty cool. Even though I just genuinely don't think I've achieved anything and that's kind of something I have to work on and it's probably become evident in a lot of my pods that I'm very self deprecating and don't give myself any credit, let alone enough. But certainly no credit. But yeah, what I'm saying is it's pretty cool to zoom out and just kind of use a milestone like this as like. Well, yeah, I've built something from nothing. It's nice to have the. I guess it gives me more confidence. Think that, you know, a third party who knows what they're talking about has built massive businesses, invested in massive businesses and got really good outcomes for many of them. Also backs and believes in this random pink mushroom thing that I came up with in my kitchen two and a bit years ago. So that's quite cool. Yeah, it doesn't mean I'm successful, it just means it's a milestone on the way and yeah, feels like a decent one. So definitely more pressure now. Definitely more work to do. I'm working very hard. I think it's very fulfilling work. I know what we're trying to achieve this year, some of which I've shared on the pod. Hopefully it gives an interesting dynamic to the poor YouTube going forward. I would like to share a bit on kind of the painful process and stuff I learned, I guess dealing with investors going through a due diligence process, which was very intense by the way. And then now how it's changed after. I'll probably do that in some other videos. I think like with everything there's probably a line of what I can and can't share, especially now there's other people's money involved, other people on the cap table. I want to be respectful and mindful of that. But I still think I can make this pod and share content that is authentic and honest and transparent while not crossing that line. I think that's the way I've always done it. But definitely even more so going forward, I think as the business gets bigger as well. But yeah, I probably feel rusty on this pod. This is definitely longer than 10 minutes. Episode 61 subscribe to the pod. Yeah. Cheers for watching. Continue the journey along. Space Goes to the Moon. Let's fucking go, Sam.