- Three YC alumni founders discuss fundraising and their companies
- Elizabeth from Science Exchange raised Series C, Vanessa from Goldbelly raised Series A, and Erica from Flex raised a seed round
- Science Exchange is a marketplace for outsourced research and development
- Goldbelly is a marketplace for regional foods shipped to your door
- Flex is a menstrual product that replaces tampons, pads, and menstrual cups
- Fundraising was challenging for all three founders, with the first check being the hardest to secure
- Practice and feedback from peers and investors helped refine their pitches
- Tailoring the messaging to investors who may not be their target users was a challenge
- Focusing on the business value and market potential resonated more with investors
- Erica faced additional challenges pitching a period product to investors who may not understand or relate to it

- The speaker advises focusing on building a strong business that speaks for itself and not wasting time on potential investors who are not interested.
- They used food as a way to illustrate their business concept and create a positive impression during investor meetings.
- The speaker suggests starting with angel investors and asking them what metrics they are looking for in a company at your stage.
- The speaker's seed investors provided guidance on the key metrics to highlight during fundraising.
- The expectations for funding amounts and company stage have changed over time, with larger amounts now being the norm for Series A funding.
- The panel acknowledges that women may face unique challenges in fundraising, particularly in the early stages, but emphasize the importance of focusing on growth and demonstrating product market fit.
- Preparation is key for successful fundraising, with a focus on having a solid financial model, data, and key metrics ready to present to investors.
- Researching and talking to others in the industry can help identify potential investors and understand their preferences.

- When looking for investors, it is important to find ones that have expertise in similar industries or have invested in similar companies.
- Researching investors through platforms like LinkedIn and Crunchbase can help identify potential connections and introductions.
- Fellow founders can be helpful in making introductions to investors.
- Dividing responsibilities during fundraising can be challenging, but it is important to maintain strong metrics and goals for the company.
- It is important for founders to find a work-life balance and not become too consumed by work.
- Seeking advice and support from other founders can be valuable in navigating the challenges of starting a company.

- Three YC alumni founders, Elizabeth, Vanessa, and Erica, discuss their experiences with fundraising and their respective companies.
- Elizabeth's company, Science Exchange, is a marketplace for outsourced research and development.
- Vanessa's company, Goldbelly, is a marketplace for regional foods delivered to your door.
- Erica's company, Flex, offers a menstrual product that replaces tampons, pads, and menstrual cups.
- All three founders faced challenges in fundraising, with securing the first check being the most difficult.
- Refining pitches with practice and feedback helped improve their fundraising efforts.
- Tailoring messaging to investors who may not be their target users was a challenge, but focusing on business value and market potential resonated more with investors.
- Erica faced additional challenges pitching a period product to investors who may not understand it.
- The speaker advises focusing on building a strong business that speaks for itself and not wasting time on disinterested investors.
- Using food as a way to illustrate their business concept helped create a positive impression during investor meetings.
- Starting with angel investors and understanding their metrics for success is recommended.
- The expectations for funding amounts and company stage have changed over time, with larger amounts now being the norm for Series A funding.
- Women may face unique challenges in fundraising, but growth and product market fit are key.
- Preparation, a solid financial model, and key metrics are important for successful fundraising.
- Researching investors and seeking connections through platforms like LinkedIn and Crunchbase can be helpful.
- Fellow founders can provide introductions to investors.
- Dividing responsibilities during fundraising can be challenging, but maintaining strong metrics and goals is important.
- Finding a work-life balance and seeking advice from other founders is valuable.

During the Female Founders Conference Kat Manalac invited three YC founders on stage to share their experiences of fundraising. The founders are Elizabeth Iorns of Science Exchange, Vanessa Torrivilla of Goldbely, and Erica Jensen of The Flex Company.

Hi, I'm Kat, and I'm really excited to introduce you to 3 YC alumni founders.

And this is actually going to dovetail really nicely with what Kirstie and Aileen were just talking about, because we're going to be talking a little bit about fundraising, because we all know that that's a big challenge.

And then hopefully we can get to a couple questions beyond that.

But these 3 women are running companies that cover a wide range of categories.

We have something from the sciences, marketplace, feminine hygiene.

We also have companies here at different stages.

So Erica from Flex just went through YC in the summer, last summer, and raised a seed.

Summer 2011, and she just announced her Series C raise today, so congratulations.

And Vanessa with Goldbelly went through YC in winter 2013 and raised a series A, right?

We have a wide range of, you know, kind of stages.

So I'm really excited for you all to kind of tell your story.

So can you each introduce yourselves, talk a little bit about what your company does and where you're at today?

I'm the founder and CEO of Science Exchange.

Science Exchange is a marketplace for outsourced research and development.

We work with some of the world's largest pharmaceutical companies, as well as agro-science, cosmetics, aerospace, and food science companies to help them manage their outsourced research and development.

We have been in operation for 6 years, and through that process have built the company now to a global stage, so it's very exciting.

My name is Vanessa Torribilla, and I am the co-founder and chief creative officer of GoldBelly.

We are a marketplace where you can discover the greatest, most iconic regional foods from everywhere in the country shipped to your door.

Through us, you can experience places like Momofuku Milk Bar and Magnolia Bakery in New York, Salt Lake Barbecue in Texas, and we ship it to you no matter where you're located.

We recently raised $10 million, Series A,

I'm Erica, I'm the co-founder of the Flex company.

Like Kat said, we went through YC actually twice last year and we closed a 4000000 dollar seed round in September.

Our product is called Flex, It's a new menstrual product that replaces tampons, pads, and menstrual cups.

You can wear it for 12 hours, it's disposable, you can have mess-free period sex while wearing it.

And we started shipping to customers in October and we're currently on a multi-million dollar run rate.

So I wanted to do 1 really quick survey in the audience.

Okay, okay, so now we know where we're at.

Okay, so on a scale from 1 to 10, where 1 is easy peasy, and 10 is the hardest thing you've ever had to do as founders.

How hard do you think, say, raising your seed was on that scale?

I feel like it was more like a 9, raising a seed, because fundraising it's not something that you want to do.

think the first check is the hardest check you're ever going to close, and that was for sure a really solid 9.

So how far along were your products when you first raised money?

Well, so we manufacture a type 2 medical device that's regulated by the FDA, so we weren't very far at all, because as you can imagine, that costs a lot of money.

So we were really an idea and a design and an early prototype and a founding team.

We had customers and we were demonstrating growth and you know, we were generating some good revenue, so.

We were super early, so we, our first money in was Y Combinator actually, and we had nothing, so we didn't have even a website.

And then after Way Combinator, we'd build a website and built initial customers and had some revenue.

And at that stage was when we raised our angel round.

So you mentioned that getting that first check was really hard.

How many investors do you have to talk to, or what was that experience like before you closed?

For us, fundraising is a lot like hiring.

You really want to align yourself with people that you wanna continue working with and that you genuinely like.

I think Eileen said don't work with assholes, right?

And so it was important to find people in the beginning who not only believed in us, but really believed in the product and believed in the mission that the product would achieve.

How did you practice for those first investor meetings?

I think for us, we got a lot of practice during YC.

We were pitching to our peers, we pitched to PG, he gave us some amazing tips on some things that we should really put out front and center.

So it was mostly talking to people who were going through similar fundraising instances that we really learned how to do it.

So you tried to pitch to as many other founders who could give you feedback?

Yeah, we wanted to focus on things that people were reacting to and they were nodding to.

You wanted them to respond with a question.

If they were confused, it was not a good thing what we were saying.

And what did your practice process look like?

So part of the challenge here for many of you is selling this company to people, often a lot of investors are white men, who aren't necessarily your users, right?

Most investors aren't scientists, or they're not women who have periods.

Like how did you get to the right, you know, kind of message, that story to tell investors?

Yeah, I think the storytelling is really important, particularly in the early phases.

And for us, I'm not sure that we were very good at it at the beginning.

So definitely for us, it was a journey, a evolution of trying to understand what would resonate with investors as an audience, and what we ultimately came down to was really describing the business.

So instead of being very focused on what's most exciting to me, which is enabling breakthrough research, that was not, you know, people got excited about it, but it wasn't to them something that they really wanted to invest money in.

And what really resonated with people was when they understood the market size and they understood that this was a new market that was wide open where no software existed, and that there was a huge transactional cost that Science Exchange would eliminate, that they could really see that the economic benefit of Science Exchange was so compelling that this would be something that could create a truly billion dollar business.

And so that's where we were able to really start to raise significant financing.

So did you pitch to a few investors who, you know, you were pitching your, you know, as a scientist with someone, you know, from your background, the things that excite you, as you said, aren't the things that excite investors.

So did you sort of have a couple of people to practice on, or did you make a few mistakes before you

Yeah, I think for us, we tried to tell some interesting stories about use cases that had happened on Science Exchange, like 1 of our favourite ones was NASA used Science Exchange to develop the blackest material ever measured, and we were like, that is so cool, people should really care about this.

And it's a great story, but it's not a great investor story.

And so not clearly describing why that could create a valuable business opportunity was definitely a mistake.

And we sort of evolved from that and actually developed much more of an economic based pitch, which resonated much more strongly.

And Erica, you're going to have to tell us how you pitched a period product.

How did you get comfortable doing that even?

It was just something that we really believed in and if we didn't talk about it with everyone, we knew that we wouldn't see it come to life so that it was something that we had to talk about with everyone and like you said, a lot of the investors that we were pitching don't have vaginas, don't have periods, and are frankly afraid of both.

So when you go in, and you're talking about both things simultaneously, they just don't understand it.

And so we really focused on, and like the best advice I feel like I can give is like focus on building a really incredible business that speaks for itself and that they can't avoid and at that point the product kind of becomes irrelevant although we definitely had conversations where they were like like I can't even tell you guys how many times I've heard, like, let me ask my wife, or like, can you send a box to my assistant?

And those aren't people that you want to work with anyways.

So take that as like, I'm not interested, and move on and find someone that is.

And Vanessa was every investor just like food?

No actually at the time that we were pitching the the hyper like local delivery space was pretty crowded So we really wanted to make it very clear that you were getting specialty things from someplace else.

So what we did is that we made sure that we had food present, you know, to illustrate what we were trying to do.

So we would bring a key lime pie from Key West.

We would also do a lot of research about the investor that we were talking to.

We'd find out where they went to school or where they were from, and we made sure to have something there that maybe they had a nostalgic connection to.

Yeah, and it was really cool because by the time they arrived.

Everyone's like, yes, bring us some key lime pie.

By the time they arrived at the meeting and sat down, like they saw the food item and they understood what we were trying to do.

So that was, we didn't have to like, go through all of this explaining anymore.

And then the other thing that we used to do is that then we'd follow up with like another food item delivered to them.

So when you are trying to figure out, you're getting ready to pitch to investors for the first time, how did you know what metrics they wanted to see?

We just asked, Like, if Sequoia is your super hot dream boat, don't set that up as your first meeting.

Go in to find an angel that you're also interested in, but it's not your number 1 pick, and start practicing there, and ask them, what metrics do you need to see in a company at my stage, and like, what would you be looking for?

I think in our instance, our seed was raised on vision.

We were talking about our vision, our experience, the team, the market size, so it was less about like how what our metrics were and it's more about like how are you guys gonna win and why are you guys gonna win.

I think that by the time we went to raise our series A, our seed investors were really key in giving us guidance on like what were the KPIs that were really relevant that would make you know investors interested in us.

So it was through our seed investors that we learned what metrics to really put front and center.

Yeah and I think related to that those KPIs are going to be critical for your business anyway So really understanding what those KPIs are based on the business type, and then tracking those rigorously as you're growing the company, and then those will give you sort of benchmarks for where you need to be when you're going into each round of fundraising.

So how has it changed as you went through a seed, you know, an AAB, and now a C, how has it changed throughout that process?

Yeah, for me, I think actually the industry has also changed a lot in that time as well, so I think when we started Science Exchange 2011, it was right at that kind of bubble when people were starting to think about becoming entrepreneurs but definitely not at the level of interest that there is now that you see the huge number of people in the audience today.

And so that's amazing to see so many people wanting to become entrepreneurs but it also creates a different level of expectation around where you should be as a company at each round of financing.

So for us, when we raised our Series A, our Series A was like 3 or 4000000 dollars, and that was great.

That was like totally normal back then, and now I think the median is close to 10 million.

So it's a very different type of expectation around where you should be, what stage of company you should be when you're raising each of these rounds.

Certainly for us, we saw that same focus on vision, on market opportunity and on team being very important in the early stages and then much more focus on, OK, how are you showing true product market fit?

And in our series C, that was very critical that you had very large enterprise clients that were actually using this platform extensively.

And that you had genuinely proved out the business model and the cost of acquisition and all of those components that investing this money would actually immediately go into creating an ROI for those investors.

So, as you've all gone through the fundraising process, we've seen the numbers, not a huge percentage of women get funded.

Do you think that at any point in the process you face specific challenges because you're women?

Like we face unique challenges being women.

I think I really struggle with this question because raising money is hard.

And you don't wanna go into a negotiation or into a meeting thinking like, oh, this is gonna be harder for me because I'm a woman, because you're giving that person the upper hand.

So it's not to say that it's not happening, but it's like, how do you not think about that so that you can go into that meeting and you can actually be the 1 who is changing that percentage or that statistic?

It's a little bit hard for me to answer that question because my co-founder is my, he was my boyfriend now, he's my husband.

So I just feel like, you know, for us is, as long as we're, you know, focusing on growth and we're showing, you know, demonstrating like product market fit, like that we're gonna do well, I didn't feel like my gender had anything to do with where we are today.

Yeah and I think as you get into the later stages of financing you see perhaps less because there is much more focus on metrics so being able to quantitatively show that your business is actually at a point where it deserves to raise a certain amount of financing kind of removes an element of bias even if it's unconscious.

So my suspicion is that those earliest rounds, the angel rounds, are probably where it's most difficult and where you might face some bias.

I don't know if that helped us or not, but I certainly think that If you can push through and get that initial funding, then you start to get traction and that traction actually trumps any kind of weird gender issues.

Yeah, so that's an interesting, I've had a lot of conversations and it seems like getting those first checks are the hardest for women.

And then also, that's probably the most vulnerable.

So for things that happen, it's usually at that stage before you already have a network of investors who can help you through the later stages of the process.

So for folks that are maybe raising their first, their seed, their A, do you have advice?

What is it, if someone were to come to you and say, hey, can you help me?

What 1 or 2 things would you want to impart to them?

I think that About a series a what we did differently is that we prepared Much better for a series a than we did for our seed We made sure that we had our financial model, you know, pretty ready to go, all of our data was ready, all of our KPIs were on display, and we made sure to study up on all of the key metrics that investors at a Series A level would be interested in.

So by the time we had our meetings, we already had all of the information that they were gonna ask.

We weren't like scrambling to like, you know, we weren't having different conversations at different times.

We were having the same conversation with everyone, showing everyone the same information.

And we, you know, we just studied up and prepared before we had our first Series A meeting.

So that's, that goes to something that Eileen was saying, you just, you have to know those numbers cold, by heart.

And it's, and it's not just your numbers.

By the Series A, you should also know who you want to talk to.

Most of the time you're gonna start talking to people that have already invested in you and at the seed level or you're going to reach out to firms that you know can help you you know get to the next stage.

So you're gonna have to do a lot more preparing before doing doing a series A than you would a seed.

Yeah I agree I mean even at the seed stage I think that being prepared is so important.

Like, there's so much research that you can do.

There's so many, I mean, all of you in this room, there's so many people you can talk to about like, what has their experience been like?

Go talk to other investors, like I said, ask them what they're looking for, and put that together for the people that you really, really want on your cap table.

And so what how do you identify those people that you want to talk to, right?

So how do you figure out who might be interested in funding a feminine care product?

Well, there aren't many that fund feminine care products.

But look for companies that are similar, like if not in your category, similar to what you're trying to achieve.

So like we have a feminine hygiene product, but we're also an e-commerce company.

So like what investors have a really strong presence in e-commerce.

What investors have invested in female founders?

Yeah, we were looking for investors that had expertise in consumer brands and marketplaces.

So we did a lot of research about who could really give us some really great advice.

Look at their LinkedIn, you see what boards they're on, yeah.

Yeah, and if you, I mean, if you're in part of the startup community, you already know what kind of firms, you know, focus on different industries, so.

And how much did fellow founders kind of, you know, help you out?

Like, did some, did folks offer to introduce you to their investors or they said hey I know someone like did that ever work reaching out to you know folks in your community?

So 1 thing that I've that we've always done is if if we needed an intro to an investor, we would either reach out to a YC partner or to any of our peers that maybe had some kind of connection, like through LinkedIn, you can figure out who's connected to who.

So yeah, we would just ask for personal intros.

And how did you divide responsibility on your team?

So as a lot of you know, when you fundraise, it sort of takes so much of your time and focus.

So how did you keep the company running while you were out there pitching investors?

Yeah, that's definitely very challenging at the earliest stages.

And again, I think that's something where minimizing the time at which you're actually fundraising and being very focused about when you're fundraising and when you're not fundraising is very important because you have to have, you know, really strong metrics going into the fundraise and then if it's just, you know, 3 co-founders and, you know, 2 of you are fundraising, you're going to have a dip in your metrics because you're doing nothing else except fundraising.

I think once you get beyond that initial phase of only having a few people in the company, hopefully you're at a point where the company should continue to operate more or less seamlessly without you being in the office every day, and that's a lot easier.

So definitely our series C was so much easier from that regard, but I think it would be great to hear how you guys handled that.

So for our seed round we everything slowed down right our entire team was focused on somehow helping raise the round but by the time we did the series a our CEO Joe he did he basically did the round as I focused on operations I made sure that we were still running and then we were still growing that we were sticking to to our our goals and our metrics month to month so we could you know keep making money.

The vast majority of like running the company was up to you for a while.

The reason we did it pretty quickly is because we had gotten profitable before we went out for a Series A, which I forgot to mention, like that also helped speed up the process.

If you've already worked out your unit economics and you you've become profitable, then you know you have a little bit more leverage to have you know I feel like a faster fundraise process so probably I would say just a couple months yeah but I was basically involved in the day-to-day for our product and our marketing and BD As he was focusing on talking to investors Erica

We have 3 co-founders our CEO Lauren really focused on fundraising and we always say I kind of stayed home and made sure that the kids were still growing, which meant keeping the company running, keeping the traction that we were showing investors, making sure that it was continuing.

If you could go back in time and give yourself a piece of advice to when you were first starting a company?

First starting the company, what would you tell yourself?

Doesn't have to be about fundraising, just generally.

I think a lesson that I've learned being a founder is when you start your company, you're pretty obsessed and you put your everything and your all into your work, into your product, into what you're trying to build.

You feel that if you work 24-7, you're gonna be better and you're gonna help your company take off.

But what you don't realize is that you can burn out if you're just working 24-7.

If you leave work and go home and continue to work, you're not going to make better decisions for your company.

So it took me a couple of years to figure out how to have a good life and work balance.

I think I had no idea how hard being a founder was going to be.

And not that that's advice, but more so like how, I wish I would have met more founders in the beginning to have talked to about it and learn from them and just be able to bitch about everything that you have to go through.

Yeah, I definitely think that learning process of trying to get advice earlier, trying to not be afraid to sort of talk about the challenges you're facing and, you know, everyone is always like crushing it and doing so well on the outside and that's, you know, at times you feel like, well, maybe I'm not doing well enough and like, you don't know who you can really talk to about it.

And I think the reality is everybody feels like that and that if you're just really honest about that, people will say, oh yeah, you know what, I had the exact same thing and I'm so worried about it as well.

And you can realise that every single company is so messed up.

And I remember Jessica talking about this at 1 of the female founders conferences and I was like, that's really true.

I mean, you always think that everything that you're doing is so much worse than everybody else, but the reality is everybody is just trying their best and creating these amazing companies in the process, but it's not perfect.

It's not perfect for anybody along the way.

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Founders of Science Exchange, Goldbely, and The Flex Company Discuss Fundraising