- The video features a conversation between Iba Masoud from Tara and Amber Atherton from Zyper about their experiences with fundraising.
- Iba raised a seed round in 2017 and then applied to YC, while Amber did not raise pre-YC.
- Iba's company, Tara AI, provides a product management solution, while Zyper helps brands connect with their super fans.
- Iba and Amber both raised a Series A this year.
- Iba's company went through a pivot and raised $2.8 million, while Amber's company raised $4 million.
- The process for raising the Series A took about 2 months for both companies.
- Both companies focused on finding the right partners and communicating their vision through investment memos.
- Iba's fundraising process took 9 days from the first coffee meeting to receiving a term sheet.

- The speaker and their co-founder were under pressure to accept offers from investors
- They wanted to work with individuals who understood their market and had a technical understanding
- They decided to work with a boutique fund called Aspect Ventures, now Accru Capital
- They regretted wasting time with investors who didn't understand their space
- The process took about 60 days and involved multiple meetings and offers
- They prioritized finding the right people to work with over maximizing valuation
- They valued personal connections and compatibility with potential investors
- They emphasized the importance of honesty and not creating false urgency in the fundraising process
- They looked for investors who understood their product's integrations and the importance of category creation
- They were prepared for the documentation and closing process after receiving a term sheet.

- The speaker found the post-term sheet closing process fascinating and emphasized the importance of working with a good law firm.
- They were surprised by the amount of follow-up required by the legal firm after signing the term sheet.
- It took 60 days to receive the cash after signing the term sheet.
- It is advisable to negotiate a cap with the law firm for the time it takes to complete the process.
- Asking questions during the process is important to understand the fund's interest in the product and build a vested interest in the company.
- The speaker discusses the importance of meeting with senior associates who have influence at the firm.
- The process typically involves a coffee or lunch meeting with a GP, followed by a full partner meeting.
- Transparency and assertiveness in asking for a yes or no answer from funds is crucial.
- The fundraising process requires full focus and time management.
- The process can take up a lot of time and attention, so it is important to time box it.
- The speaker spent approximately 7 hours with each partner during the process.
- Building rapport through WhatsApp communication helped speed up the process.

- The speaker discusses the importance of having other founders to communicate with and seek advice from during the fundraising process.
- They talk about the experience of being a female founder and feeling pressure to conform to certain expectations in male-dominated environments.
- The speaker mentions the changing landscape of venture capital and the increasing representation of diverse founders and partners.
- They discuss the challenge of finding the right partner at a VC firm and the importance of connecting with someone who understands the industry and business.
- The speaker emphasizes the need to focus on building a great product and traction before starting the fundraising process.
- They mention the importance of mindset and having an executive coach to prepare for fundraising and address questions about the potential size of the business.

- The speaker suggests that female founders may have a more realistic approach to risk and growth potential compared to male founders.
- It is important for founders to have conviction and belief in their company, but not to deceive or overinflate their projections.
- Founders should focus on finding the right partner who shares their long-term view and values.
- The speaker emphasizes the importance of culture and values in a company, and how it can help with recruiting.
- Building the right team is crucial after raising funds, and the speaker highlights the importance of hiring the best people possible.

- Founders of a startup realized that the companies they wanted to recruit from were not the ones they had initially written down.
- Hiring people who were late-stage at companies was different from hiring those who were among the first 20 employees.
- It is important to bring in executives who have experienced the early stages of a company and understand the level of hustle required.
- Recruiting people who have offers from big companies can be challenging; they need to believe in the mission and vision of the startup.
- Series A companies should understand that they are still early-stage and things will be chaotic and scrappy.
- Conducting board meetings and learning how to run them effectively is a learning process for founders.
- OKRs (Objectives and Key Results) should be specific, measurable, and have team buy-in.
- The frequency of board meetings can vary, but having them more often can help maintain the pace of work.
- All-hands updates can be used to prepare the board deck to save time.

- The easiest way to create a board deck is to translate components from the all-hands update
- Board meetings should focus on enabling decision-making and delving deeper into specific areas
- When raising seed or Series A funding, focus on finding the right partner and do thorough reference checking
- Have a process and stay organized in the fundraising process
- Stay confident and persevere, as there will always be someone who resonates with your idea and says yes

- Iba Masoud from Tara and Amber Atherton from Zyper discuss their experiences with fundraising.
- Both Iba and Amber raised a Series A this year.
- Iba's company went through a pivot and raised $2.8 million, while Amber's company raised $4 million.
- The fundraising process took about 2 months for both companies.
- Finding the right partners and communicating their vision were important for both companies.
- Iba's fundraising process took 9 days from the first meeting to receiving a term sheet.
- They valued personal connections and compatibility with potential investors.
- The post-term sheet closing process was fascinating and working with a good law firm was important.
- Negotiating a cap with the law firm for the time it takes to complete the process is advisable.
- Transparency and assertiveness in asking for a yes or no answer from funds is crucial.
- The fundraising process requires full focus and time management.
- Building rapport through communication helped speed up the process.
- Having other founders to communicate with and seek advice from is important during the fundraising process.
- The changing landscape of venture capital and the increasing representation of diverse founders and partners is discussed.
- Building a great product and traction before starting the fundraising process is important.
- Hiring the best people possible is crucial after raising funds.
- Conducting effective board meetings and using OKRs can help maintain the pace of work.
- Focus on finding the right partner and stay organized in the fundraising process.
- Stay confident and persevere, as someone will resonate with your idea and say yes.

Amber Atherton is the founder and CEO of Zyper (YC W18).

Iba Masood is the cofounder and CEO of TARA (YC W15).

https://twitter.com/AmberAtherton
https://www.zyper.com/

https://twitter.com/ibamasood
https://tara.ai/

Y Combinator invests a small amount of money ($150k) in a large number of startups (recently 200), twice a year.

Learn more about YC and apply for funding here: https://www.ycombinator.com/apply/ 

***

Topics

00:15 - Intros

1:00 - Seed fundraising for Zyper and Tara

3:10 - Tara's pivot

4:15 - Series A fundraising for Zyper and Tara

17:55 - Evaluating investors

23:30 - Meeting with associates and partners

30:20 - Raising a Series A as a female founder

39:15 - Fundraising psychology

41:30 - What not to do when fundraising

44:45 - Talking to portfolio companies about investors

46:05 - What it's like to run a Series A stage company

1:00:25 - The most important piece of advice for fundraising

All right, so today I have Iba Masoud from Tara and Amber Atherton from Zyper.

So today we're going to talk about fundraising, but before that, let's talk about your companies.

So we're building an end-to-end solution for product management.

So we help product managers, engineering managers, spec out their products, gain insight into their development life cycle, and essentially monitor progress within software development.

Zyper helps brands connect to their super fans to build community.

So we work with a lot of the big Fortune 500s like a Kelloggs or a Nike to help them really identify who their top 1% of fans are and then bring them into a space to co-create product or to become brand ambassadors.

Okay, and so both of you this year raised your series A, but I think it'd be interesting to start from the beginning.

So could you tell me your story of, did either of you raise pre-YC?

I was in London, started a company in 2017, and I raised, raised 1.2 seed in London, from a VC in London And a lot of angels involved in that, great angels involved in that round, too.

And then I applied to YC and got in then.

And you just applied to YC, but you applied a couple of times, right?

So, I applied twice and it was with a- at the time it was a different idea, different company, different even market segment like we were focusing on the Middle East.

So, it was basically like a careers platform for fresh grads and so entirely different company.

We got in with careers platform for grads in the US.

So that was like the first that was in 2015 when we first got in to YC and post YC for that we raised roughly around 200k or so.

Like the first 100k, I remember it was a very difficult process to raise.

Pre-YC, we had just gotten about 10K in a grant from MIT because we were doing research into GitHub repos.

So we were looking into programmers and their work on GitHub and just kind of analyzing the commits and how we could find patterns, essentially, and also try to identify the best programmers out there based on their work in Git.

And so that early research actually formed the thesis and the infrastructure for Tara as it stands today.

So Tara we officially launched in, not even the website or the product, but just launched with the idea in 2017.

Okay, and how did the pivot go with your investors?

So, when they heard about the market that we were trying to tackle and the product that we were building, they were immediately like, oh, here's more money.

So what happened was about a fourth of our investors doubled down.

And so from that 200K, When we pivoted, we raised 2.8 million.

And so we had a 3000000, called it a 3000000 seed.

Wow, okay, so what would you attribute that up round to?

I mean, it was just the opportunity, the market segment, the early, early team that we had assembled, and then also the early traction that we were seeing from the early ML models that we had applied, as well as early customer traction.

So the seed was in 2018, the 3000000 seed.

That's when we announced it, but it had really been a work in progress for a while

So you lumped all that money together and called it 3000000 seed?

So now having raised both of you a series A, Can you walk me through the differences in the process related to it and how you communicated it to your investors, how long it took, all that stuff?

Yeah, so we did YC Winter 18 and 4Runner Ventures led our seed pre-demo day and that was exciting.

So we raised 4000000 then and we were just charging forward with the product like timing, first market and we started having conversations at the end of last year around just raising an A.

Like it was more rapid than I thought it was gonna be.

And then I had a conversation with Aaron about the series A batch and thought, this is probably a good idea.

Aaron is a good, good guider, so I should do that.

So then we joined the series A batch in January of this year And that process was about, I think it was like 2 months that we were in that batch.

So yeah, 2 month process, just like heads down, super focused on building out our pipeline and just aiming to close the round in a shorter time as possible.

But walk me through the 2 months because you know a lot of people aren't fortunate enough to be a part of the series A program so.

Yeah, yeah I can't believe we got in, no joking.

So as with YC, or anybody who's going through the process of like getting, building something people want and getting to that product market that you have daily insane highs and lows.

And I guess what was great was just going into it with a structure of, okay, let's fill out this Excel sheet.

Let's know every single fund that we want to speak to.

Let's work the process and get the timing right.

I think that was super helpful in kind of catalyzing how quickly we could close something.

So it was, you know, the standard process of fundraising, of targeting the people that you know you wanna work with that support like your vision, and then going through that cycle of having conversations, second conversations.

I think something we did that was really good though was writing that investment memo.

So what we did was kind of do the VC's jobs for them and write, you know, a memo as to why you should invest in us.

And that sort of went out, you know, with the deck after the first meeting.

So that's a very chaotic answer to your question.

Honestly, we looked at a lot of other memos that we could find out there.

So like the YouTube memo, picked that up and really kind of spoke to other VCs that I know about like the, you know, their favorite memos or like how they think about like putting a memo together and then use that as a foundation to structure our own memo as to, You know, what is the point of Zyper?

And you know, kind of unpacking what the risks might be and why they weren't really risks in our eyes.

And how deep were you going into the financials in the beginning up there?

In the memo we weren't, we were just giving high level like this is our revenue so far and this is the market we're going after and how much we expect to grow in the next kind of 12 months.

But obviously we then had a model to back that up that was significantly more in depth around the financials.

I mean, I think for us, and Yeah, if you remember, Amber, like what happened during that time.

It was, so what happened with us was we spent about 2 weeks during the, during the program, just really trying to nail the pitch, make sure that we were talking about the product and the solution the right way.

You know, just being able to really segment out the story and tell it in a very concise, but in a much more in-depth manner as well.

And so what happened was we spent about 2 weeks pre, like during the program, and how I found out about the program was I contacted Aaron and I was like, Aaron, our seed investors want to just pull in and do 5 million Series A.

And they're like, you don't have to go out, you don't have to raise and it'll be done.

And he's like, think about it, like, you know, you shouldn't rush into these things and those seed investors can come into your series A as well.

And so what ended up happening was our total fundraise process to go from first coffee meeting to term sheet was 9 days.

Well, the thing is that our seed process was so incredibly painful that this was, it was obviously very surprising.

But, and you know, our closing process took longer.

That took about 60 days or so in terms of like getting the legal process completed and figuring out like who we're going to bring on board for that final 1 million in the overall round.

But I think 1 of the things that I will say is what we really tried to do was run a thoughtful process and really focus on the partner and people versus the fund.

Like it's really about doing your research and finding the partners who've, you know, led rounds in other companies that you admire or that you know have the right profile for your company?

Yeah, so what happened with us was we were under quite a lot of pressure during that time because we had offers on the table and there were people just kind of, you know, dining and dining us and really trying to get us to accept their offer.

And it got to a point where, you know, it was like people were literally calling up folks in our ops team to like book meetings on my calendar.

And it got fairly chaotic, I would say, during that process of 9 days, but there were, you know, my co-founder, Sayed, 1 of the things, like he's, I think he's someone who's really the yin to my yang and for the most part, he was the 1 who was like, you know, let's really take our time and think through who do we want to work with that are, you know, essentially just good people in terms of individuals, have a strong understanding of our market and of our customer, can speak with, can be thoughtful because the product is fairly technical and we're selling to a technical audience as well.

And so having the ability to actually understand and from the engineer's point of view, that was something that we were really looking for.

And I think what ended up happening in our case was we decided to work with a boutique fund, so Aspect Ventures, who are now Accru Capital, and Teresa Goh, Lauren Kallodny, Asad Khaliq.

For us, it was really about the team and very specifically the board member that would be coming on to the team.

think you probably knew early on, like in other conversations you were having, whether that person or that partner really understood what you were doing.

And I think looking back with hindsight, I wish I maybe kind of ended some of those conversations earlier just with people that I was, you know, really trying to convince that this is why Zyper's amazing and this is why it's great when they were so not experts in this space.

you were just attracted to their brand or something like that?

Yeah, I was attracted to their brand name and you know, it's always very exciting when a great brand name like reaches out to you and is, is, is, especially if they're being aggressive about wanting to get a meeting and then you take the meeting and then you realize actually you don't really understand this, this space.

And I wish I'd, I'd kind of been more, you know, assertive with ending those conversations sooner and really like doubling down on like, do these people actually have my values?

You know what, there's always somebody out there.

I think this is, there was, I mean, Ibra's process is amazing.

Ours personally took about 60 days to go through and I was flying also back to London to meet other funds there and we actually ended up raising from a London fund.

Yeah, so we're meeting people out here and So it was a, yeah, and then there was holidays and it just always drags on longer than, well, for us, than you think.

So it was that 60 day process and then longer to get the legals.

But I'm glad that we went through that because we did find a great partner who, and when you know, they immediately get the space.

God, I have to say, so I'll just give you 1 example.

We were at the, so we did 3 full partner meetings.

So That's when all the partners at a fund ask you to come in and the partner that's sponsoring the deal or sponsoring you as a founder is essentially the champion.

And they're really, they want you to come in and really present the story, the solution and the market and you know why this is going to be the next big thing to the full partnership.

And you know so we had done 3 of those meetings and so we had offers on the table and what happened with Aspect was they approached it from a very personal stance which was to really get to know us as founders and really try to understand what makes us tick and then also where this company could go.

And so even during those 9 days, I had the opportunity to speak with founders of portfolio companies at those funds.

But the other thing, I just remember this when we were at 1 of the final meetings and they found out that I love bubble tea.

Yeah, they had like an array of boba just on the table and as soon as Seyad and I walked into the final meeting where they had the term sheet.

So included in those 9 days, are you meeting them the first time?

Because oftentimes people start months and months and months before like grabbing a coffee with someone.

So, from the first, in terms of for those few funds very specifically that got to the final part of the process.

So, I mean, you know, I don't know when you can start the timer, but it's really like the day that we met them from that date to, to term sheet closing.

And by the way, that's a term sheet is not when your round closes.

A term sheet is actually, and a lot of founders don't realize, is that a term sheet can be considered an LOI.

It's kind of like that first part of the process.

You can't even consider it an offer in some cases.

So people renege on term sheets all the time.

And, and so when we got the term sheet, I wasn't celebrating whatsoever.

So I, like, I remember we got our first 1 and then.

So getting the term sheet was just the first part of the process where, and you know, for us, like, we're like, okay, we have a few offers on the table.

And actually, we ended up taking a lower offer, only because 1 of the things I always tell founders, and I just think I personally believe that you shouldn't maximize for valuation.

Because the thing is that if you maximize for valuation, then, you know, incentives aren't necessarily aligned.

And so what you really want to maximize for is, are we getting to work with the right people?

Like, it really isn't just a quick thing.

And you know, 1 of the investors that we had literally put a blank term sheet.

So the idea was that we would put in the valuation.

And so, you know, it's like, I immediately, I saw that and was like, okay, that's a tactic.

Like, you know, you don't want to play these games.

Like at the end of the day, you're building a long, exactly, long-term relationship.

And so, you know, for us, like we're just like, okay, we're just, you know, we're just, what we want to do is just work with human beings.

And so- That's what I loved about like Taliesin led around.

I mean, I was doing conversations with them at like midnight hour here, cause they were based in London.

But you know, there you go, you persevere, you get that time sheet and the money.

And you do realize like when you do like click with someone and they have that great personality and that they really aren't pushing like weird games with you on weird tactics.

But I also, I think this goes back to the founder pressure to build momentum and urgency in your process.

So many founders ask me that as well as like, how do I create this optics, this sense of urgency and it's dangerous, you know, because you can be tempted to say, oh, well, we have this other time sheet, we have this other offer, blah, blah, blah.

Just don't ever do that because it's so small as a community and

Exactly, I can't agree more on that point.

I think 1 of the things that happens is, you know, founders tend to, exactly like you said, right, Like they have a lot of pressure and 1 of the things people try to do is they try to be, you know, slick about it when you don't need to.

Like at the end of the day, you're, whether your round takes 9 days or 9 months, it's really about just finding the right person and the right partner.

So, I mean, it's not that different from like just interviewing someone to work at your company, right?

You kind of need a little bit of a culture fit.

What are the things you're looking for, whether it's like body language or vibe or whatever it might be, to signal to you that like, okay, this is working.

Yeah, I mean, I think for us, it was really just how they handled some of the early customer calls.

So, you know, like, were they even finding out things that we didn't know?

Like, were they so insightful in their question and answer process that they were relaying back information to us that could potentially help in growing, you know, growing the team size at that company in terms of platform usage.

And so there was that piece, and then there was also, what I was looking for in particular was, do they really understand how we're trying to build a data layer?

So 1 of the things with Tara is that we integrate with Jira, with GitHub, And so the idea is to go from spec to issue.

So your issue tracking software, which resides in JIRA, and then also go all the way to commit.

So where your version control and source control in terms of the actual code commits.

And 1 of the things we were really looking for was do they actually understand how important integrations are going to be in our play, and also the value that we're providing.

And 1 of the other pieces was, everybody was saying this was category creation, but we really wanted to work with someone that had done category creation before in particular, and understood what it took to march forward and specifically really try to own the category from the get-go.

So, there were certain things that we were looking for, And I think, even if I look at it in hindsight, I think we were able to run a thoughtful process in those 9 days.

What I found really fascinating was post-term sheet, as you go through the closing process and the level of documentation in your data room and what you need to have prepared and ready.

And at that stage, it's really important to work with a good law firm.

So 1 of the things that, I mean, I honestly discounted was I was like, okay, I think the most important thing is to find the right partner.

And then the legal stuff, you know, it's basically something that a good reputable law firm will be able to figure out.

Turns out the amount of follow-up that they required, that the legal firm required after, And I mean, it was just, it was really like, we didn't celebrate until the cash was in the bank.

was a good 60 days after signing the term sheet.

I think also some good advice we got was negotiate a cap with your law firm to do

because it will go over and it will end up being 30 days or maybe even 60 days.

So I think that was a good bit of advice.

I think some of the questions that I asked the fund in that process, and it's really important that you do ask questions back because you are going into relationships.

So you don't just want to not ask anything about who they are and why they care.

Some early indicators, same as Iba, is like, okay, how do they handle their customer calls?

And how are they coming up with feature suggestions for the product?

Like, are they so, you can tell early on if they're obsessed with the product and what you're building because they will give you future suggestions.

And I would then follow up with the customer calls and say, how did it go?

And so often there would be this kind of joyous enthusiasm, like, oh, they were so excited about the space.

And so I think that's a very, like, early indicator, like, do they really care about the product?

And ask questions back, what do you understand about it?

What do you think we should be building in it?

Because then they're building a vested interest in the company from a very early stage, which I think can help push the process along quicker.

So definitely asking key questions like that.

And in related to that, what about the people that you kind of should have said no to and kept taking meetings with?

Like what were the signals you saw there?

You're like, I'm probably they're probably gonna say no.

Or would you have still taken those meetings and gone all the way through with it?

You don't know, I think, a lot of the time where something is gonna lead, and I think that is the classic, like the vagueness of VC, this sort of unwillingness to say yes or no and just kind of can get lost in that like gray area for a while and you're kind of hoping that something might happen.

And I actually, that's probably a telling point is that funds can operate quickly.

It's very difficult to artificially create a hot deal.

Like you, if you are a hot deal and you've got a great product, you've got great revenue and product market fit at this stage, funds will move quickly and they can give you a term sheet.

However, I do think that 1 question I asked early on was, you know, what is your process?

Like, tell me, like, how does this work for you?

Because whilst they can move fast, they still, you know, they have to present the partner meeting and being mindful that they also almost are entrepreneurs themselves, like they have to validate it to their LPs and they have to get buy-in.

So working together on how to move that forward and really understanding from their perspective what it's going to take to get this signed off, I think was helpful for me.

Yeah, and I think just to kind of, if we look at it as a process and we want to present an overview, the first meeting is usually the single partner meeting, which is the coffee meeting.

And at that stage, and for some founders, it may happen with an associate or a senior associate or a principal, what you want to do is make sure that you're meeting with an investing partner.

And so they would usually have general partner in their job title.

do you think about this whole question that gets asked so many times about whether you should take a meeting with you know a principal or associate because I think they it's important because they can be great advocates for you.

I don't have a black and white answer to that because The thing is that at Aspect we met with a senior associate and that's how the, I mean and it was still a short process in terms of like getting the deal moved forward.

So I think the most important thing is to meet with senior associates that have influence And how you can figure that out is really just go onto their LinkedIn and see how long have they been at the firm.

Are they someone who's really an analyst but has the associate title because sometimes you can have inflated titles at VC firms.

And so if they've been there for a few years and even better they're sitting on a board, like let's say they're a board observer, then you know that this is someone who has influence at the firm.

And so that was just my very quick vet, you know, in terms of deciding.

I mean, for us it was just such a short process, but that would be the advice I would give.

Now, if you look at the actual process, so the first piece is the coffee meeting, right?

And that's when you meet with the, ideally the GP.

And sometimes it's a senior associate and you get pushed forward to the GP.

If the senior associate is serious enough, they will bring the GP into that coffee meeting.

In our case, what happened was some of our early, from those 3 funds, 1 of them, in the first meeting itself, pretty much they had like 4 people there, and it ended up being a lunch meeting.

So it can be a coffee meeting or a lunch meeting in terms of that first meeting.

And then if that goes well enough, they'll pull you into a Monday or Tuesday full partner meeting.

And so let's say if you have lunch or coffee on a Wednesday or a Thursday, by Monday or Tuesday you could be presenting to the full partnership.

So what happened in our case was we had back-to-back full partner meetings, it was on Monday and Tuesday, and so that weekend was when we spent really prepping the pitch.

And if the GP really wants you to present your best foot forward in front of the full partner meeting, they will work through that weekend or whatever that date period is to make sure that your presentation is as good as it

I think it's so important just to focus on that because as you're left as an entrepreneur in this gray area like not getting really direct clear signals as to whether a fund wants to do this or not it's being mindful that yes a fund a partner will work on the Sunday or the Saturday to like move this deal forward and they will do that.

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Amber Atherton of Zyper and Iba Masood of TARA on Raising a Series A as a Female Founder