How do you raise $1M+ after your seed round stalls?

Jason Kirby (00:02.17) Hey everyone, this is Jason Kirby, Founder and Managing Director of Thunder.BC, hosting today Martin Lesmanis for Fundraising Demystified, where we go into the untold raw truth of what actually goes into the fundraising process for running a venture-backed startup. And we're excited to have you today, Martin, and we'd love for you to go into a little bit more about your story and share kind of how you went from initially conceptualizing the company to where you are now. And now you're in the position to actually focus on what you want to do, and that's building your company. So, I'd love for you to just give me a little bit of your background on yourself and kind of what led you to starting Suppleful. Martins (00:40.871) Yeah. All right, thanks, Jason. Happy to be here and thanks for inviting me on the pod. So super excited to share our story, and just let's see where the conversation leads. So a bit of a background about myself. I'm an electrical engineer, and then I turned kind of entrepreneurial when I studied an MBA in Sweden. Jason Kirby (00:56.15) times. Martins (01:13.209) my studies, I really started working in venture capital in the Baltics. It's a rather small venture capital scene. But I worked there for nine years and and learn a lot about startups on a high level, as well as on a micro level, seeing like how different startups compare against each other, as well as what actually happens specifically on in each Jason Kirby (01:20.65) Thanks for watching! Martins (01:43.869) And it was very gratifying feeling but throughout that process I was a super young guy I was just in my 20s, and I really got that vibe from companies coming to pitch to us as a fund that Like people looking at me saying like what do you know like who are you basically look at this young guy sitting behind the table? never built a business Doesn't have the street credit, so I decided to the street credit and together with the founders of the current company Suppleful, we launched our first business venture which was an e-commerce brand called graphomup.com and we bootstrapped that business to a bit more than 1.5 million in revenue in the US market and then we successfully sold it in 2020 and Martins (02:43.309) this point so far because it was really like we said it took us five years we set it out in 2015 that we're just going to bring like a company from zero to one and that was the whole you know goal of that or the driver behind that just to prove ourselves that we are entrepreneurs that we understand what it takes to build a company and that our assumptions actually are working so Martins (03:14.454) super gratifying experience, I would say. And yeah, after selling that business, we realized that the one best thing that kind of works with early stage startups is teams. And the founding team is super critical. So we, or more specifically, I knew that we need to do something together as a team. Next, something bigger challenge us to the next level Jason Kirby (03:45.95) you Martins (03:52.29) different competencies like Rudolf's one of the co-founders is like a super super skilled technical founder engineer. Richard who is also my childhood friend he's probably one of the best in terms of like understanding how to build a product, how to position the product, how to market the product like a like a full stack marketer knowing tons of tools analytics understanding to push the buttons, why the product should look like that specifically. And then me, kind of the operational side, finances, building the organization as such to make sure that that organization lives beyond ourselves, beyond the founders, so it's its own entity basically. Um, so yeah, and, uh, and that's a massive asset because also from the experience of VC, um, I, I saw like how in 10, in like six out of 10 investments, we went in just to mediate the founders, to make sure that they stick together and actually execute on the business idea. So, uh, it's already like a massive asset. Uh, so that's one thing. Another thing was that, uh, how we can leverage that, uh, US market again and build a much bigger company third we had a problem with Not the problem, but with the previous business. There was basically no reoccurring revenue We constantly had to struggle with acquiring more users and pay for the ads. So That was a huge Drawback so we needed a business model where we can implement subscriptions where we can drive kind of Jason Kirby (05:23.394) you Martins (05:43.069) and increase the sales frequency. And we wanted to do something really with physical products. So our idea was, okay, let's build a consumer packaged goods brand in the US. Either in the sports nutrition or wellness niche. But as we start to dig through the market, like we realized how antiquated it is. It's super old school. just to identify good suppliers. Once you have identified the suppliers, they start sending you emails with PDFs or Excel spreadsheets, so it takes tons of time just to communicate. So you spend months already by this point. Then, okay, you set on couple of suppliers, you know what to do, then the next step they say like, okay, guys, but you need to invest like 10K, 15K in inventory. Okay, fine, let's do that. to just in a pretty much risky venture that you don't know how it's going to turn out. And then third is still not all suppliers provide 3PL solutions. So have to find like a 3PL partner where to store everything. So super long, costly, complicated and eventually this drives the barriers of entry in the market super high because it's a massive risk pretty much to take on. So We literally thought there must be much, much better way how to do it and execute this. So we built an innovative business model in the consumer packaged goods market, which we call consumer packaged goods on demand. And that's what Supplyful is all about. What it means is that you can launch your own consumer packaged goods brand with one click. There's no MOQs. There's no upfront investment for you. orders on your behalf to your end customer. It takes you just installing for example the Shopify app, suppleful Shopify app on your store, publish the products and that's it you start selling. It's frictionless experience. Jason Kirby (07:57.93) No, that's something that I'm glad you brought up in terms of how you basically came up with the team as your first focus. And I think having your experiences of VC, early stage investments, you're usually betting on the team. And I'm glad you share that story of how you had to intermediate several of the companies you invested in because that's the reality of a co-founder partnership. There's a lot of putting heads. I've had my fair share of those moments. And it's how you handle those. Martins (08:04.213) Yeah. Martins (08:21.997) Yeah. Jason Kirby (08:27.85) great partners like your VCs to be able to assist in those times of need when you kind of have that third party input. So that's an amazing insight to kind of share on to our founder community of just really knowing who you're going, who you're getting into bed with for what could potentially be the next five, 10 years, whether that's a co-founder or even a VC, it's a partnership that is potentially for the life of the business, hopefully. So okay, from here, you basically decided originally go CPG, but then you identified Martins (08:49.109) Yeah. Yeah. Jason Kirby (08:57.89) the real problem that you guys wanted to come and go after when you're trying to set up that business, which personally I've dealt with. I had a CPG brand for about two years, and that was one of our, it took forever just to get the product to market. Just because finding all those partners and all those pieces of the puzzle, we didn't even get to focus on marketing until almost like six to nine months later. So the fact that you just allow anyone to come in and just launch any kind of white labeled product off the shelf, kind of pick and choose what's right for their brand, Martins (09:00.771) Yeah. Martins (09:18.913) Yeah. Jason Kirby (09:27.89) live relatively quickly is something that a lot of creators are mostly your target audience. Martins (09:36.269) Yes, so creators, e-commerce specialists, literally solo entrepreneurs, you know, anyone that has some sort of a community and they're looking for other means to kind of add additional revenue stream to their existing business. Jason Kirby (09:42.85) I'm going to go ahead and close the video. I'm going to go ahead and close the video. Jason Kirby (09:53.71) Yeah, so you kind of tap into like, you know, e-commerce, supply chain, as well as a creator economy and, you know, community economies and stuff like that. So kind of tacking into some trends that have been popular lately. You know, one thing we kind of glanced over, but, you know, you're in and out of the US, traveling back and forth, you know, to manage some of the operations in Europe, as well as in the US, like as an immigrant, like how much harder was it for you Martins (10:00.511) Yes. Martins (10:09.971) Yeah. Martins (10:20.855) Yeah. Jason Kirby (10:23.65) through this experience and launching a product in the US and working with US investors, US partners. Martins (10:30.929) Um, well, working with, uh, partners, there's no problem at all. Like they don't, like I'm doing sales, also a lot of sales from, from Europe and people doesn't, doesn't care. They don't care where is, uh, where I'm based from or am I immigrant or not. They are more of course, uh, interested into value, what I can provide. But, uh, in terms of, uh, VCs, it's been definitely much more challenging. Because we have just one US angel and then a smaller fund from Silicon Valley, which is called Diasporta Ventures and actually focuses on investing in immigrant founders. Because one of the partners of the fund is French. But when it comes to raising from US investors for the pre-seed round, It was a challenge because I don't have any network, nobody knows me. People that were in New York that are more straightforward, bluntly upfront told me like you're not from the US, so unfortunately we will not be interested. Also, when it came to Colorado, where we have actually in Denver, where we have physical location, we have office, we have people working there. We have... all our businesses in the US and talking with the VCs they were like and I'm telling them like I'm traveling back and forth I'm here and in the Europe because I'm managing both of the teams. No, but you have to move here and I'm like, okay, but but you have to understand like First of all, we're super efficient company and we're gonna stay that way For me to come here with my three kids with my family It will be a cost to the company of 10 to 15 K per year per month living in the US to do it? What's the rationale? So there's no logical even rational decision made. So that's kind of the feedback and notion I mostly got, but on the other hand I kind of understand where it's coming from and it's totally normal. Like you have to prove yourself, you have to they have to trust you because at the early stage it's all about trust. There is no almost Martins (13:04.832) They try to justify rational decision, because I've been a VC and I know 100% what you're doing, like you're trying to rationalize your decision, but pretty much it's an emotional decision. So it is what it is and I think it just makes us grittier, it makes us more resilient, it makes us more wanting and being more resource savvy. Jason Kirby (13:08.25) Thank you. Jason Kirby (13:15.055) Yeah. Martins (13:31.235) the extra roadblocks I think helps you even grow at some point and make sure that you build a sustainable business instead of just venture driven business. Jason Kirby (13:44.43) I just want to call that out. That mindset right there, I think, is what leads to a successful outcome. I think there's a lot of founders out there that feel either that they're being neglected or there is some kind of forces against them and macro forces that they kind of blame their problems on. But you're reflecting on the issue of, these are just roadblocks that I have to overcome business and will ultimately lead to a healthier business, which is what VCs ironically want to see now. Two years ago, they wanted to see the how fast can you burn and grow, and now they're like how fast can you get to profit? You've already been built out to optimize for profit, so that's great to reflect on. Kind of switching gears, one thing that's important about this particular podcast is Martins (14:25.034) Yeah. Yeah. Jason Kirby (14:44.35) through that journey, now we have some context to you and your background and the company, we're grateful for you to kind of share like, when did your fundraising journey start? And kind of what, you know, having bootstrapped a business before and had success and had an exit, what made you want to go down the venture back path? And what was that journey like for you? Martins (14:59.829) Yeah. Yeah, so starting with why we decided to go the venture route was... It's because of our, probably, ambition that we want to build a company that is global, that employs thousands of employees across the world with high salaries, which means that our impact is... Which means that we're impacting like thousand families that they can live decent lives. of building this business. And for you to be able to do it, you need an outsourced investment to do it in still like, let's say relatively short time. And by relatively short time, I mean like 10 years somewhere in that range. Because there are companies existing for hundreds of years still building and improving and growing. So that's why we pick the venture route. Of course, there's some drawbacks, Jason Kirby (15:33.55) Thanks for watching! Martins (16:03.669) But yeah, so how we started our fundraising journey. So we started thinking about this idea and kind of putting together sketches late 2020. So then we invested like 50k our own money in the company and we built the first like closed beta alpha version So in February 2021, and that was still like the hype around fundraising and everything was still on. So, but we took like, I'm having the background, we really took that MVP route and understood what steps you need to make in order to raise the next round and kind of what you need to achieve. So we invested that money and we really like build out an MVP, just generated couple of thousands through the platform. the concept that it works and that is really needed in the market. And then in May, June, we raised the pre-seed round here in Baltics and that went super fast. That was like, I was surprised. It went, I started raising on Sunday evening, so I did a first 50. So we raised in total 410k Martins (17:32.349) money safe note so everything that we raised till now is on safe so that's the first safe raise so on sunday i got in first 50k then by friday that next week i closed the whole round and most craziest call i had was i had i talked with a person for 30 minutes met him first time in my life and after our call he transferred us 100k in the bank Martins (18:04.69) But you have to understand why this happened because it was in Baltics, I was a VC for 9 years. And those people actually knew me, they knew what I'm capable of, what I've built. And all that kind of network helped me definitely to raise the money. So I kind of tried to compare myself. If I would have spent 10 years of the same kind of things doing in Silicon Valley, I would probably be able to raise the same amount. just because I would be there and people knew me and kind of what I can achieve. So this is what it's a testament kind of how critical and important is your network and your Martins (18:49.769) your connections and also your personality, how you act as a human being and what you want to achieve. So that went super fast and I was like, yes, great, let's move on, this is gonna go easy. And then things, we use that capital to open our Denver facility, hire some first key people, kind of build out our first version of the platform, which we launched in October. 2021 and that was kind of the that is the launch date of our of our business pretty much and it's when we start to Calculate how fast we're growing how much revenue we're generated, etc so So after that I opened like I call it a C round at that time uh in November the november december end of the year safe note, a 2 million seed round at 10 million pre-money. Again with safe notes and kind of on a rolling basis and that's when things, I don't know if that was a good decision or not but it's what I did and what I took for and that's when things like started to go down the hill because pretty much when it started 2022 everything There was no hype, there was no like, no like momentum, investors got more cautious. So, and all this safe raising, forget about the US investors, like they no saves, nothing. So, but I still raised like, what was it? 460k from the existing investors and couple of new ones, but also really like One smaller early stage fund from Baltics and then couple of high net worth individuals. So close that and then, you know, I've been living kind of on a rolling basis and for the past base. Now it's the situation is stable, but let's say for the past 12 months, it's been like all the time, like three months, two months, one month, zero months, then you get some funding in and then it goes like this. Martins (21:20.049) Constantly with safe notes and so it's it's a lot of pressure on the CEO and it's a lot of It's a tough job to handle because literally you like You pretty much it's on you. It's all the time on you. It's not it's not the founders. It's not the other They are focusing on their own stuff but it's you that kind of Deals with this nobody's coming back to you. Nobody's responding you nobody cares Money is running out but you don't want to seem desperate so you constantly need to manage these things. And of course it's super stressful so it takes a tough character to be honest. It really takes a tough character and it takes tough mental preparedness for that. And for me I just focus on like... Everything's just gonna turn out fine, continue taking step by step, move towards the right direction. is happening and eventually things turned out positive. So we till that point like constantly after throughout 2022 we raised like additional million basically. So the total and I called it eventually extended pre-seed round and now to date in total which is like a pre-seed round we have used 1.5 million, a bit more than 1.5 million, all with save notes and then like 20 different investors. So, yeah, and then now the core focus is really building the business and making sure that we get to break even in a couple of months, hopefully in June. We'll see how, of course, we scale and how we grow month over month. But the plan is to really like break even this year and then we are in a stable position when we want to raise money and we want to raise capital to scale what we're doing. Not to survive. Jason Kirby (23:08.638) you Martins (23:32.654) but to scale. Jason Kirby (23:35.37) So, that's quite the journey, and I think you kind of said it right when the burden that falls on the founder, the CEO, to kind of always be raising, and in the truest sense here, not being able to do what would be more traditional as like a priced equity round, and everyone kind of falls in together in like a month or two and you close out all the notes, for the sake of your business and the fundraising market we just got out of, you're just on a rolling basis stacking saves. Martins (24:04.771) Yeah. Jason Kirby (24:05.31) that comes with that of just, will you get that check, you know, in the next month or so is quite burdensome. I guess what was your strategy? How often were you meeting with investors? How were you changing and evolving your approach? How did you go about kind of securing the additional million that came in in 2022? Martins (24:27.369) Yeah, so first what I did actually, and it kind of worked really, but we passed actually on some VCs, because there were some... Martins (24:47.169) regulatory requirements that were needed in order to receive their investments. So like open, open an entity in their jurisdiction. And so it's all cumbersome. But what I did in this, like late 2022 is I took this super like ultra personalized cold outreach process and really like approached it as a sales. And then I pitched investors with like a more personalized story. So for example, I have my daughter draw a unicorn so it stands behind my desk every day. So I was pitching like I was sending this image called email to VCs and saying like this is a drawing by my daughter and she draw this unicorn but while I'm actually building the actual unicorn. So and then kind of that sparked the conversation as something different. Jason Kirby (25:21.49) Yeah. Martins (25:47.129) Really got us, got me on the calls, you know, had a pipeline of calls. The process was sort of tight at the beginning, which is super critical to have that. But then it slowly, like as the macro trends came in, as we didn't close, as we didn't get the lead, nobody was focused on say. So it's kind of started to, and then it just like totally wasn't like out of, it went out of control, basically. Jason Kirby (26:15.591) When would you say, on the timeline-wise, when you felt you had the momentum before it kind of got lost, when was that last year? Martins (26:24.449) So it was late December, early January, I would say. I would say maybe if we took that one VC who was ready to lead and do half a million, then we'll probably be able... Because I had tons of people ready to follow, of course, as always. Yeah, yeah, yeah, yeah. Jason Kirby (26:43.671) No. Jason Kirby (26:47.371) They say they follow, but they don't come in and save you when you need it. Martins (26:54.409) but they were still missing this one kind of bigger VC to commit and come in. But we passed on that and I think that was a bit of a turning point, but you have to live with your decisions. This is the decision that I made and I just went forward and played with the cars that I had on my hand. And then, then, yeah, yeah, yeah. Looking at the unicorn house. Jason Kirby (27:18.55) pictures from your daughter. Martins (27:26.411) But no, that's not the ultimate goal, you know, as I said, to build a unicorn. It's kind of a metaphor of building a huge company, which implies it's potentially worth more than a billion dollars. But... Jason Kirby (27:31.414) Mm-hmm. Jason Kirby (27:40.25) Thanks for watching! Martins (27:41.449) But yeah, then it kind of started drifting. Another... So we had this bit of money in, like a half a million, let's say. So I knew I had a runway, let's say, to like March, April. And then I did a visit to Silicon Valley. And then before that, I also did like a massive outreach. I had a couple of meetings, but still it was COVID time. So I thought that if I get in the room with these people and they see me in person, Martins (28:12.569) of actually converting and closing more funding. And that helped with one investor, which was DiaSport Ventures. So I went to San Francisco. They were one of the few ones that actually met with me in person. And it wasn't a huge check, but still that was 75k. And it helped us to just prolong the runway. And... Martins (28:42.289) And then it worked kind of so the trip let's say paid off I would say. And then from from all these like conversations and everything what is the benefit I have truly like at this point built a huge investor list. And I have kind of people from A16Z, Greycroft from large funds really kind of following the updates. Of course, they're not maybe responding much, but at least I'm constantly on their radar. And I'm using that as like warming them up and when I will be raising the next round, I know that this is going to be pretty much super tight deadline calls on specific dates, days. So I just kind of approach it as a sales. Jason Kirby (29:29.271) And when do you plan to go out for your next round? Martins (29:32.429) So the idea is to... Martins (29:36.709) two things. So one thing is that what everybody is looking for Suppliful in terms of like larger VCs coming in, so we prove that there's this platform play for Suppliful. So currently we're holding the inventory in our Denver facility, but now in end of March we will actually integrate our first supplier that is going to drop ship the products themselves. So they're going to deliver the products themselves. We stop holding the inventory. So this proves that our eventual goal be like an infrastructure, like a pipeline between hundreds of CPG suppliers and anyone on the demand side looking to launch a product, white label product. So first integration basically rolling out in April, second integration by June, so we already have two. And what that gives us, we remove the inventory and at the same time we exponentially expand our product catalog. Martins (30:37.049) more appealing to more people. And then on the demand side is really scaling it and making sure we can actually break even. And we're sustainable operation. So once we have those two elements set in place, we are more confident to say that, and we're still exploring, but we're at least more confident. This is the playbooks we're going forward, this is how we acquire the supply side, this is what we're working on the demand side. It works, and for that's what we're searching the capital. Jason Kirby (31:11.73) That doesn't make sense. Martins (31:14.889) So yeah, basically the timeline is July, June. Jason Kirby (31:20.07) Let's go to the target. And then you kind of mentioned something that I think is important that a lot of founders kind of forget is after going through the process of reaching out to all these VCs, and for whatever reason, maybe it was bad timing, macro effect, maybe you just weren't as interesting to their thesis or whatever it might be, but you still have their contact and things can change over time. And it sounds like you've been providing investor updates over time. Is that true? Martins (31:48.029) Jā, jā, varētu varētu varētu. Man ir investerās vēlītījums. Mēs ir super vajadzīgās ar mēs mēsīm. Tas ir detaili finansuāli, esi pārpēcīgi atkārātījās. management, financial management reports and You have to understand that this is not just a SaaS business where there is just like Just one thing pretty much. There's almost marketing costs salaries, and that's it basically But here I have to carry inventory how the inventory moves so it's much more complicated operation in term compared to just a regular B2B SaaS Jason Kirby (32:16.914) Yeah. Martins (32:32.47) So, yeah, we're sending these out. So, first of all, people memory is super short. So you have to keep track record of the things that you're doing. Jason Kirby (32:42.871) Mm-hmm. Martins (32:45.849) Just personally for myself and it helps me to align really think about what we achieve through that months. I'm Also even on a weekly basis. I'm sending out team memos. So Fridays. I'm just spending like sitting down Understand what's been done what I'm planning for the next week and kind of what we want to achieve as a team together. So I Think it helps you level and helps you keep hope focused all the time Jason Kirby (33:12.65) Nah, I would agree and I'm glad you shared that with me. And then something that helps, you know, from kind of educating our founders and having them have insights in terms of how they might be able to relate to your specific situation. Are you able to kind of share any kind of milestones or metrics that you've been hitting that kind of help support your fundraise? Martins (33:33.589) Hmm, okay. Yeah so What we are focused is? One metric is month over month growth rate Then on the demand side we are looking at how diversified the revenue is From who the revenue is coming so it's not saturated with with just couple of accounts Then we're also looking at a GMV how much revenue is generated by our customers using Suppleful. So it's almost like the market size or the economical impact that we're creating with this type of solution. We're also tracking Shopify store installs, how they are growing over time. Reviews, Shopify reviews for our app, which is an indication of like the sentiment, the service that we're providing. Yeah, I would say those are the main metrics. Oh, another critical metric actually, which is probably the most important one. Over all of those is retention. So we're constantly looking at retention to make sure that... Our cohorts are growing month over month. And that is probably at the moment one of our biggest challenges that we haven't really cracked. So it's fluctuating month over month. Jason Kirby (34:42.194) Good. Martins (35:09.069) compounding and it's not growing. But once we crack that nut, I think we're close to an unstoppable business growth. Jason Kirby (35:20.75) And so that's something, that's why I asked this question is, you know, every business is a little bit different, but a lot of the core fundamentals for any kind of venture backed startup is, you know, like month of month growth rate, retention rates, gross margin, things of that sort that, you know, what a lot of VCs will base their investment on of understanding, okay, can we project out future cash flows and can we see this business being sustainable with these core metrics? Jason Kirby (35:50.65) on your retention rate and figure out how to crack that code because that will ultimately unlock immense potential because you already paid a certain amount of money to acquire that person or to that customer get them on the platform. But having them stay and leverage and use the product continuously will just increase your LTV over time. Would you mind sharing any kind of top level metrics as far as where you guys are at in terms of either whether it's other month growth or retention rates or if you're comfortable, your revenue? Martins (36:01.271) Yeah. Martins (36:19.649) Yes, yes, yes, sure. So GMV since launch is now more than 2 million dollars, around 2.5 something like that. Our 12 months trailing revenue is close to 1.3 million. No revenue, that's revenue. Jason Kirby (36:32.35) Thanks for watching! Jason Kirby (36:40.61) Revenue or GMV? OK. Nice. Martins (36:49.93) month over month, we're not yet hitting that 20% target that we're looking for. Martins (36:58.329) Yeah, we grew... We have close to 3,500 installed Shopify stores. 10,000 registered, more than 10,000 registered users. We are not profitable of course. So yeah, these are kind of the high level numbers. Jason Kirby (37:25.57) No, I appreciate you sharing that. And I think that helps a lot of founders kind of understand, like, hearing your fundraising journey and kind of hearing your metrics, it's how founders kind of, whether it's healthy or not, they like to compare and understand, like, how are they different? How are they, you know, similar? And I think you had some headwinds that you kind of addressed earlier in your fundraising process, just the fact that you're going to and from Europe puts a lot of ECs and investors on edge because they, you know, for most of them, they just don't understand it. They don't, if they don't understand it, they don't want to write a check for it because Martins (37:52.973) Yeah. Jason Kirby (37:56.513) Even though it's really easy to understand if they just put a few minutes behind the but. Martins (38:01.05) Yes, you're very right. And then that's the notion actually I got from fundraising is like, these people literally invest in B2B SaaS because they keep asking me like the same questions and I'm trying to explain what is the business model, but they keep coming back to the same metrics that they understand, which doesn't really apply to this business model. So yeah, that's, that's, but it's kind of, yeah. Jason Kirby (38:20.635) Yep. Martins (38:29.269) fit between a startup and an investor. So you can only find the fit if you just talk to people. Jason Kirby (38:35.79) Yeah. And that's, uh, you know, it's something that's really important to kind of mention. It's like when you talk to certain VCs, they're trying to put a square in a circle peg, uh, you know, put a, put a square peg in a circle hole and it's like, they're just trying to hammer it like, no, it's, it's not working. Okay. This doesn't, this doesn't work. And, you know, for some VCs, there's a lot of, you know, kind of more open-minded approach, seeing bigger opportunity. But, you know, often if you're dealing with someone that, you know, maybe he's a little bit younger or early, you know, less experienced, they, Martins (38:50.59) hehe Jason Kirby (39:05.65) within a certain guardrails of making a decision. And if they only look at B2B SaaS, they're only gonna ask you B2B SaaS related questions, and they're gonna try to force your business into that direction and or interpretation, thus it's not gonna work out because that's not your business. And in those situations, typically if I talk to a founder that gets in one of those situations where they're talking to VC like that, in that case it's best to just walk away because that's already showing the signs Martins (39:22.176) Yeah. Jason Kirby (39:35.87) out and it's best not to kind of chase the shiny object because they'll lead you on. You know, VC will just keep engaging with you and keep poking but it won't go anywhere in most cases. Martins (39:42.331) Yeah, yeah. Martins (39:48.069) And you're very right about this because literally I had like... I had like two opposites of meetings. So one is like constantly asking like what you are doing, what you're... Like I don't understand and then there's this other meeting was like... Totally understand, straight to the point questions, like really want to know details about our business and then it's like... It's even fun to talk to these people and explain and maybe they show you a totally new... Angle of your business that you haven't really thought about. Jason Kirby (40:19.19) But you did what you had to do. You landed the meetings, which is some of the more difficult things for a lot of founders. So you had a clever way to land the meetings. You were persistent. You treated it like a sales process. And it was fruitful, but you were up against some pretty hardcore winds against you. Martins (40:35.83) But to be honest, the thing I didn't mention, what eventually led to actually raising those remaining amounts of money. So the Diaspora went through a cold outreach, but still there was a warm intro angle. Pretty much it all went through warm intros afterwards. Like the existing investors introduced to another entrepreneur that was kind of ready to support us. And it really went that way. So I haven't, I didn't continue to do cold outreach and kind of close the remaining amounts. Almost everything went through just like warm intros. Jason Kirby (41:17.81) And how did you get those warm intros? Martins (41:22.171) One of our advisors was super like connected and the supporter of us, so he just constantly just intro'd us and talks about us and basically that helped a lot. Jason Kirby (41:35.81) No, no, I'm actually kind of glad you brought that up because I think a lot of founders are worried that when they come out for cold outreach, one, it's an arduous process doing cold outreach. To be as calculated as necessary to land a meeting, you can't just pray and pray. You actually have to be very diligent on the outreach and it's a very time consuming and draining process. But at the end of the day, are you better off reaching out directly to a VCE or reaching Martins (41:53.695) Yeah. Jason Kirby (42:05.47) these port co-founders and getting a warm intro or because that's that's the most valuable intro you can typically get is a port co-founder Martins (42:15.289) Yes, yes and that also like that's a good strategy, that's a really good strategy but I tried to also do that but and engage in some communities like marketplaces community but you really need to be active there and it takes so much time people don't like understand how much time it could take just to like engage on twitter on communities everywhere. One is time, another one is like your mental at some point starts to boil basically because you're just constantly engaging with someone and writing genuine comments and... It's tough, yeah it's tough. It's tough. Jason Kirby (43:00.19) Yeah, no, it's by no means an easy journey for anyone. Yeah, as we kind of wrap up here, one thing I would love to know is like, what would be your advice to founders that are looking to raise capital, given that you are a former VC, exited founder and now kind of onto a venture backed startup and have raised a couple of bucks, what would be your advice? Martins (43:25.409) So first of all, it's always super difficult to give advice because we're always each of us in a different circumstances and a different set of variables that are in front of us. But I think it's just summarizing the things that I was doing and doing them all together. So first of all, building relationships and getting warm intros to the leads that you have, Jason Kirby (43:30.37) Thanks for watching! Martins (43:55.549) cold leads and then start outreach all together both with warm intros, cold outreach, set up an automated email sequence that has constant follow-ups and create like then either in emails go back with a Calendly link or basically set up meetings instantly just for specific days of the week so you Jason Kirby (44:02.25) you Martins (44:25.649) You're just spending on calls the rest of the days you're doing other other things because if your calls are Distributed across all the week like Monday Tuesday Wednesday constantly like first of all you're not in the zone it literally fucks up with your brain being on meetings all the time and kind of pitching and It's just not focused way to do it. So yeah, this is kind of this is the bill I would say those are the building blocks to set yourself for kind of a tight Jason Kirby (44:53.661) you Martins (44:55.289) process and of course try to make it add some urgency. This is more like spices or something that I don't know. This is like really difficult to give advice about. You have to feel the situation and the circumstances you're in. Jason Kirby (45:12.05) Yeah, and the macro environment hasn't been friendly to a lot of founders recently as well. So a lot of typical processes, as much as they were effective like a year or two ago, it just takes longer, it's harder. The whole FOMO approach has changed quite significantly. VCs realize that it's an investor market now, not a founder market, and they're taking their sweet time making fewer investments. Martins (45:26.434) Yeah. Martins (45:36.313) Yeah. Jason Kirby (45:42.05) and taking a lot longer to make those investments. The employment cycles over the last couple of years been funds depleting their initial capital investments in 18 months, two years, and going out for a new round. Now it's kind of going back to the traditional three to five years. So they're just taking longer to make the bets that they're making. Well, oh, go ahead. Martins (46:02.492) Yeah. No, just like focus really on building a business if you can and focus on sales. And then I think the fundraising will just come. And fundraising is not for building a business, but fundraising is... And extra funding is for scaling that operation or getting yourself to the next level. It's like default live versus... What was it? Default dead is like the famous Y Combinator term. Jason Kirby (46:23.831) Now I'm glad you mentioned that. Jason Kirby (46:29.078) Yeah. Jason Kirby (46:33.21) And I'm glad you share that. That was a good friend of mine years ago said, sales cures all. You know, Martins (46:39.029) Yes, exactly. Who, who, why do you need investors if you can get in accounts that are just bringing you hundreds of thousands per month? Like, what's the point? Jason Kirby (46:49.17) Exactly. And that's great advice. And I think that's the mind shift. Having talked to hundreds of founders during the peak of the fundraising market and kind of where their attitudes were and what they're building to where it is now, it's a completely different world. And the founders that weren't able to shift towards building a profitable business and were still chasing investor capital to burn have seen that capital dry up. And the ones that focused on profitable Martins (47:05.429) Yeah. Jason Kirby (47:19.33) It's like, if you don't need the money, you get the money. You know, kind of thing. Frustrating as it sounds. But, well, hey, Martens, I really appreciate you joining the podcast with us today. You know, there are any kind of where, what links can people find you at to follow you or follow your journey? Martins (47:22.469) Yeah, yeah, yeah, yeah, yeah, yeah, exactly, exactly. Martins (47:38.809) Yeah, so I share on LinkedIn some of my journey and also on Twitter more on a daily day-to-day basis So yeah, check out my socials there. I think it's at Martin Lasmanis on Twitter and then on LinkedIn. It's Martin's last minutes so you can probably add the links in the podcast, so Feel free to reach out to me if you have any questions, so I'm happy to help Jason Kirby (47:57.33) I'll put those in the description below. Martins (48:08.669) is not that big yet, so maybe actually someone else can help me instead of me helping you, so... But... Nevertheless, remind yourselves to enjoy really every day, just enjoy what you're doing. Enjoy the process, enjoy the process. I'm saying that to myself every day, and it's super fun. It's tough, but it's super fun. So... Jason Kirby (48:31.89) respect that and you know thanks again for sharing your journey with us and sharing some of the details that you've been through and you know look forward to kind of continuing and watching your journey as you scale us up a full. Martins (48:43.669) Thanks Jason for inviting me, it's been fun. Bye. Jason Kirby (48:45.89) Thank you so much.