Startup Horror Stories
There were no tricks, only treats for founders at this special Halloween event co-hosted by Spice Startups and SeedLegal...
BunkerEx is an online marketplace for shipping companies to buy fuel. It’s a huge market – there are approximately 50,000 merchant vessels on the water at any one time, and they all need to refuel roughly once per month. Fuel is also ~70% of their OPEX, so methods to reduce it are always welcome. The market is currently dominated by brokers and traders who like to keep things opaque, so we felt it was ripe for technology to make things more transparent.
I worked as a trader in the market for a long time so witnessed the inefficiencies first hand – most of which end up costing the buyer. I honestly felt the opportunity to disrupt the market was too great to do nothing.
A £400,000 “pre-seed” round – all closed on SeedLegals of course 😉
A mixture. We got one great VC in first, and the rest followed soon after.
I think the fact that we had direct experience in the market helped a lot, reducing the risk of no product market fit. So I guess that’s a mixture of the founders and the idea!
Keep it short. My first pitch deck was >20 pages, then I read something on Venture Hacks saying it should be no longer than 10 pages. After cutting it, my response rate from investors went up dramatically.
Finding the first firm investor! You get a lot of “We’re tentatively in, but come back to us when you have other commitments” which leaves you in a bit of a no-mans land – can you tell other investors they’re in or not?
We also had a sizeable investor pull out at the last minute so had to replace them on short notice which was a stressful 24 hours!
1) Say yes to every meeting, even if they aren’t investors themselves. Many of our eventual investors were from 3-4 subsequent introductions.
2) They’ve probably heard it before, but getting the investment always takes twice as long as you think it will. My theory is that this is not only because investors are busy people, but also because most founders are so compelled by their own idea (as they should be) so believe their raise will be quicker than most, and have to learn the hard way (I was one of them!).
3) Use SeedLegals 😉 – it will save you a tonne of money early on which is precious at that stage. And no, I wasn’t asked/paid to say that!
Actually from one of our investors.
Our experience was fantastic. I did use a lawyer briefly for the first draft of the Shareholders Agreement, and already I could see how much back and forth there would be, which = costs. Honestly the best thing about SeedLegals is the control you have over the variables in the documents – you don’t have to wait for the lawyer to make the changes and get back to you. You can do it in minutes on your own.
Also, I hear getting signatures can take an age but signing electronically meant we got all done in a few days. I think one investor even signed it whilst he was skiing (seriously…)
Growth, growth, growth!