As a first-time founder, Nico Simko, the CEO of digital bank Clair, found that it was easy to be wooed by investors. It was simplicity and restraint that kept his head in the game through the emotional rollercoaster of fundraising during the tumultuous early stages of a global pandemic.
As the stock market succumbed to the kind of volatility we haven’t seen in over a decade, Nico stayed the course, navigating his company through a seed round of $4.5 million that included heavy hitters such as Michael Vaughan, the former COO of Venmo.
Simplicity is key
The most important skill Nico found to fundraising was his ability to keep things simple. With institutional investors inundated with pitches and paid to poke holes in business models, it’s the founder’s job to simplify their story and de-risk the business. In a delicate balancing act, founders need to display confidence and logical thinking without over-negotiating.
It so secret that the fundraising process can be frustratingly arduous. Nico shares one such story, in which he was invited by a well-known San Francisco fund to pitch in-person to the partners. After booking his flight from New York, staying in a motel, and taking a bus to the meeting to save costs on what was already an expensive trip, he learned the devastating news that the associate had forgotten to book the meeting entirely. Nico wasn’t even on the investor’s schedule.
After heading back home, he was sent an email that the fund had ultimately decided to pass.
One of the things you learn as an entrepreneur, Nico says, is that you just have to keep going, “even if you feel like you’re the unluckiest person in the world.”
“That was a very, very frustrating moment. And that’s one thing I have to say to founders: do not despair. There’s going to be a lot of ups and downs. You’ve got to keep going.
In the episode, we learn:
How Nico determined when to start raising funds
The ups and downs of startup fundraising during turbulent economic times
The importance of simplicity in pitches and term sheets
How lawyers and advisors can help you spot less-than-favorable offers