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Amber Atherton of Zyper and Iba Masood of TARA on Raising a Series A as a Female Founder
31 segments available
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
Segments Timeline
Introducing the Founders
Amber Atherton and Iba Masood introduce themselves and their companies, Zyper and TARA, respectively. Amber explains how Zyper connects brands with their superfans, while Iba describes TARA's focus on providing an end-to-end solution for product management.
"all right so today I have EBU Masood from Tara and amber assitant from zai / how's it going hello good so today we're gonna talk about fundraising but before that let's talk about your companies so Ev..."
Early Fundraising Stories
Amber and Iba share their experiences with early fundraising. Iba recounts raising $1.2 million in seed funding from a VC and angels in London before joining Y Combinator, while Amber discusses her journey of applying to YC multiple times with different ideas before successfully raising funds.
"Eva what do you do so correct it's great to be here I'm if I'm Massoud I'm the co-founder and CEO of thara a I so we're building an end-to-end a solution for product management so we help product mana..."
The Pivot and Investor Support
Iba explains TARA's pivot and how supportive their investors were during this transition. After pivoting, they raised $2.8 million, showcasing the importance of market opportunity and early traction in securing additional funding.
"would be interesting to start from the beginning so could you tell me your story of did either of you raise pre YC yes I did okay so yeah this would be good so 1 in 1 okay so how did you do it okay so..."
Differences in Series A Fundraising
Amber and Iba discuss the differences in their Series A fundraising processes. Amber highlights the rapid pace of her fundraising efforts, while Iba reflects on the structured approach they took during their Y Combinator batch.
"with we got in with careers platform for grads in the u.s. so that was like the first that was in 2015 we're gonna be first got in - I see and post - I see for that we raised roughly around 200k or so..."
Investment Memo Insights
The founders share insights on creating an investment memo for potential investors. They emphasize the importance of clearly articulating the company's vision and addressing potential risks, while also providing a high-level overview of financials.
"like and not even like the website or the product but just launched with the idea in 2017 okay and how did the pivot go with your investors how did you go about communicating that so our investors wer..."
Building Relationships with Investors
Amber and Iba discuss the significance of building relationships with investors during the fundraising process. They stress the importance of finding partners who understand their market and share their values, rather than just focusing on brand names.
"gotcha 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 ye..."
Navigating the Fundraising Process
The conversation shifts to the logistics of navigating the fundraising process. Amber shares her experience of a quick nine-day process from first meeting to term sheet, while Iba reflects on the challenges and pressures faced during their fundraising journey.
"down super focused on building out our pipeline and just aiming to close the round and shorter time as possible but walk me through the two months because you know a lot of people aren't fortunate eno..."
Choosing the Right Investors
Amber and Iba emphasize the importance of choosing the right investors who align with their vision. They discuss the need for thoughtful consideration of potential partners and the value of having investors who understand their technical product.
"could close something so it was um you know the standard process of fundraising of targeting the people that you know you want to work with that support like your vision and then going through that cy..."
The Role of Personal Connections
The founders share anecdotes about how personal connections influenced their fundraising experiences. They highlight the importance of rapport with investors and how personal touches, like remembering preferences, can strengthen relationships.
"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 z..."
Understanding Term Sheets
Amber and Iba clarify the significance of term sheets in the fundraising process. They explain that a term sheet is just the beginning of negotiations and that founders should be cautious about maximizing valuation without considering alignment of interests.
"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..."
The Importance of Values in Fundraising
The discussion turns to the importance of shared values between founders and investors. Amber and Iba stress that aligning values can lead to a more fruitful partnership, and they reflect on their experiences with investors who did not understand their market.
"mean congratulations on that our seed process was so incredibly painful that this was it was it was obviously very surprising but and you know our closing process took longer that that took about sixt..."
Finding the Right Fit
Amber and Iba conclude by discussing the importance of finding the right fit in investors. They share their experiences with different funds and the significance of having partners who genuinely understand their business and can provide valuable support.
"mining and dining us and really trying to get us to accept their offer and and he got to a point where you know it was like people were literally calling up folks and and in our ops team to like book ..."
The Personal Touch in Fundraising
Amber Atherton shares her experience with investors who approached her from a personal standpoint, emphasizing the importance of understanding founders and their vision. She recounts a memorable moment when investors sent bubble tea to their meeting, highlighting how personal connections can enhance the fundraising process.
"had done three of those meetings and and so we had offers on the table and what happened with with aspect was they approached from a very personal stance which was to really get to know us as founders..."
Understanding Term Sheets
Amber explains the significance of a term sheet in the fundraising process, clarifying that it is merely a letter of intent and not a guarantee of funding. She emphasizes the importance of not celebrating prematurely and the need for founders to focus on securing cash in the bank.
"term sheet so included in those nine days are you meeting them the first time because often times people start months and months and months before like grabbing a coffee with someone yeah first time f..."
Choosing the Right Investor
Amber discusses the critical decision of selecting investors based on alignment rather than just valuation. She stresses the importance of building long-term partnerships with investors who share the same vision and values, rather than maximizing for short-term gains.
"got the term sheet I wasn't celebrating whatsoever so I'm like I remember we got our first cash in Bank exactly so getting the term sheet was just the first part of the process where and you know for ..."
Creating Urgency in Fundraising
Amber and Iba Masood talk about the pressure founders face to create a sense of urgency during fundraising. They advise against using tactics that may mislead investors and emphasize the importance of honesty and transparency in the fundraising process.
"and and so you know for us like we're we're just like okay we're just you know we're just what we want to do is just work with human beings yeah and so I loved about like Tallis who led around it was ..."
Evaluating Investor Fit
Iba shares insights on evaluating potential investors based on their understanding of the product and their engagement during early customer calls. She highlights the importance of finding investors who are genuinely interested in the company's mission and can contribute valuable insights.
"can be tempted to say oh what we have this other time shoot we have this other offer but blah blah just don't ever do that because it's so small as a community and just be honest exactly about it I ca..."
The Importance of Category Creation
Iba discusses the significance of working with investors who have experience in category creation. She explains how understanding the nuances of building a new category can be crucial for the success of a startup like TARA.
"with them 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 insig..."
Navigating the Closing Process
Amber reflects on the complexities of the closing process after receiving a term sheet. She emphasizes the importance of having organized documentation and a reliable legal team to ensure a smooth transition from term sheet to cash in the bank.
"looking for and and and I think you know even if I look at it in hindsight I think we were able to run a thoughtful process in those nine days what I found really fascinating was post term-sheet as yo..."
Asking the Right Questions
Amber and Iba discuss the importance of asking questions during the fundraising process. They highlight how understanding the investor's process and their level of commitment can help founders gauge the seriousness of potential partnerships.
"coming up with features suggestions for the product like are they so you can tell early on if they're obsessed with the products and what you're building because they will give you feats of suggestion..."
Identifying Signals from Investors
Iba shares insights on recognizing signals from investors that indicate their interest level. She explains how quick responses and engagement can be indicators of a fund's commitment to moving forward with a deal.
"that's probably a telling point is that funds can operate quickly like you can move fast with paperwork maybe it is a hot deal it's very difficult to artificially create a hot deal like you if you are..."
The Role of Senior Associates
Amber discusses the importance of meeting with senior associates or partners during the fundraising process. She explains how these individuals can advocate for founders and influence the decision-making process within the firm.
"off I think was helpful for me yeah and I think I'm just to kind of 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 coff..."
The Fundraising Meeting Process
Amber outlines the typical process of fundraising meetings, from initial coffee meetings to full partner presentations. She emphasizes the need for thorough preparation and the importance of making a strong impression during these critical interactions.
"you can figure that out is really just go on to their LinkedIn and see how long have they been at the firm are they someone who's really an analyst but it has the associate title because sometimes you..."
The Importance of Data Rooms
Amber highlights the necessity of having a well-organized data room ready for investors. She explains how being prepared with documentation can set a startup apart during the fundraising process and facilitate smoother negotiations.
"of the full partner meeting they will work through that weekend or you know whatever that date period is to make sure that your presentation is as good I think it's so important just to focus on that ..."
Pushing for Clarity in Fundraising
Amber and Iba discuss the importance of being assertive in asking for clear answers from investors. They emphasize the need for founders to seek definitive yes or no responses to avoid ambiguity and make informed decisions about their fundraising strategy.
"something we would say a lot is just okay we just want to be mindful about other people who are in this in the process like you really you want a yes or a no and I think it's fine to push for that but..."
Challenges of Being a Female Founder
Amber and Iba discuss the unique challenges female founders face when raising capital. They reflect on their experiences and the pressure to conform to male-dominated norms in the tech industry.
"we wanted to talk about was the what this was like being a female founder so obviously I've only done this one time you haven't been a male in another life and reincarnated but you know other founders..."
Fundraising Psychology
The duo explores the psychological aspects of fundraising, including the mindset needed to approach investors. They discuss the importance of confidence and assertiveness in securing funding.
"like how big can it be type questions so how do you go about getting in the mindset to answer that I think having an executive coach something I should have done earlier and you know in YC there's act..."
Common Fundraising Mistakes
Amber and Iba outline what not to do when fundraising, sharing lessons learned from their own experiences. They highlight pitfalls to avoid and best practices for successful fundraising.
"negatively affect your personal confidence I think let's see so one I mean I think we even touched upon some of those things during this conversation which was you know just be true to yourself you do..."
Engaging with Portfolio Companies
The conversation touches on the importance of talking to portfolio companies about potential investors. Amber and Iba discuss how these conversations can provide valuable insights and guidance.
"what I did was I asked pointed questions to the founders and I honestly I'm really grateful that those founders were truthful because I think Natalia comes yes yeah exactly of their portfolio companie..."
Life at the Series A Stage
Amber and Iba share their experiences running a Series A stage company. They discuss the operational challenges and strategic decisions that come with this growth phase.
"now run a series a company so for both of you what has been the biggest shift I will say so we moved our headquarters out here to San Francisco after our series a previously we're in London we had a N..."
Key Advice for Fundraising
Amber and Iba conclude with the most important piece of advice for fundraising. They emphasize the significance of preparation, confidence, and building genuine relationships with investors.
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