PepTalkHer Founder & CEO Meggie Palmer spoke with Madelaine Czufin from The Vinetta Project about all things funding in the time of Corona. Madelaine shared her top tips for women raising capital.
How’s it going for the female founders that you deal with who are trying to raise capital right now?
Madelaine: A little context for The Vinetta Project, we do a lot of different programming to help female founders grow and scale their businesses and access capital resources. We don't invest in the companies directly. But we provide a tremendous amount of opportunity for founders to connect with investors, with one another, and other resources to help them with their company.
A lot of what I'm doing now, obviously, is virtual. I'm meeting with founders virtually. We're hosting expert sessions doing community wine nights and things like that. What I have continued to see, number one: is the importance of community in all of this. Making sure that you're tapping into your network and continuing to expand your network. From a funding lens, it's really important that you are seeking advice, mentorship from the same advisors, investors, and mentors that you were talking to before Coronavirus.
I have a number of factors that we're in the process of fundraising and then quarantine happened. And they either kept their same business, maybe had to do a pivot for six months, or completely transforming their business. And their question has consistently been, “Do I reach out to investors still? Where do I take this conversation now?”
It's really interesting because there's still capital out there that needs to be deployed. Some of it will be reallocated back to your current portfolio companies. But investors are still investing in startups and so on. I think it's important as a founder to maintain that grit and that hustle and make sure you don't say, “I'm all alone in this.” Continue to reach out to your resources, your community, and your network. Continue to seek out funding. That being said, I think the way capital is being distributed, particularly from a valuation perspective will shift. Diligence looks different because it's obviously virtual now. But that doesn't mean that VCs and angel investors aren't actively meeting companies, and still actively writing checks.
Meggie: It's really interesting that you say that. The importance of relationship building, even right now, there were a bunch of VCs on Twitter. A lot of them are very active on Twitter anyway, but they're particularly active right now. Probably because they've got less meetings to go to. One of them, I think it was Earnest Capital, he was saying that 95% of his deal flow that comes through email is from Whiteman. He was actively asking women who are looking for funding from anything from 20k to 50k checks up to seven-figure deals to reach out to him.
Do you feel like being active on social media and interacting is an opportunity to get funding?
Madelaine: Absolutely, I think it's kind of twofold. One is certainly something you talk about all the time. It is things like the imposter syndrome. Don't let yourself saying: “Well, my company is shifted. They don't want to talk to me anymore” stop you from continuing the conversations you had before. Similarly, different types of funding opportunities are now out there. There are so many companies doing incredible grants right now that many founders can take advantage of, particularly those focused on diverse founder communities.
Salesforce is looking at doing a tremendous, $10,000 grants for companies. There are the red backpack grants. If Alice is doing a number of them, so it's really important to start utilizing those resources as well. Make sure that you take hold of the capital opportunities that are happening in response to Coronavirus.
Meggie: That Salesforce grant is really great for businesses. I think you have to have 200 to 250 employees and 250k plus turnover to apply for. So it's a really good one.
What is this concept of different sources of capital at the moment?
Madelaine: So, this is an interesting one. We are doing an expert panel session tomorrow talking about the stimulus, which is very timely. Because the second wave is going through right now. I think, as a founder, it's really important that you stay true to the fundamentals of what you're building and why. Not all sources of capital are right for you. To say the loan opportunities for these businesses may be really interesting. But based on what you're trying to build, and your exit strategy that may actually not be the best for you versus continuing to talk to angel investors, and continuing to talk to VCs.
Likewise, some of these grants may be a really great way to extend your runway for six months until you're ready to have those conversations and pick back up if you're in the middle of pivoting your business and you want to hold off. I say all that to go back to my first point, which is making sure you are seeking the right guidance and you're not letting all of these flash buys of, “here's money here, here's money there.”
It can get really overwhelming and seem like there's all this money flying around. Like, “how do I take hold and benefit from this opportunity?” So many companies are going through many different struggles. Taking the step back to say, “what are my fundamental goals. What is it that I am building? And how do I want to get to my ultimate exit?” Whatever that may be. If you let the fads of capital run your business, it can be really dangerous. If you go back to your core group of advisors who have helped you along the way and say, “Is this something that I should capitalize on? Is this a really great grant or loan that actually applies to me and would be really useful?” Maybe it's not and that's okay.
It may be pivoting around your business model for a period of time so that you can continue to bring in revenue in a different way and continue to run your business. Once things transition back, I won't say to normal transition, but to a place where there's more social interaction. People are not in full quarantine. You may want to shift back to your original business idea. I'm seeing a lot of really exciting grit and perseverance in our founder community, which is really inspiring and just incredibly important to highlight. Now is the time where that really comes to fruition.
We actually had an investor panel. One of the investors said, “this time is allowing me to see something in a couple months that I normally take over a year to try to gather from investing in a founder, right?” You want to see when the going gets really tough, how does the founder react? They continued out like, “this is really isolating. This is very hard.” It's times 10 right now to think through what am I going to make this period of time my defining moment as a founder? And using that to say, “I'm going to showcase how I handle this type of situation and not see it as negative but almost like a positive. I can showcase how I pivot, or how I build a business throughout through this time and come out on top.”
That to me is very powerful for anyone and for the investor community as well. So, I thought that was really great advice and a different framework to say. It’s a great way to go through that diligence process in a different way.
Meggie: Because they get to see your true colors and the way that you handle the situation. For those of you who don't know, Madelaine has amazing experience in VC. She now works for The Vinetta Project which is an amazing organization that helps female founders. PepTalkHer’s very proud to be a member. And we're actually going through a program right now sponsored by JP Morgan, which has been amazing for us in our business.
For women who are thinking about starting a business, have started a business, have already raised capital, what's the best way for them to get involved in The Vinetta Project community?
Madelaine: Absolutely. I'll do kind of twofold. So right now, the virtual community is amazing. We're doing two key types of programs. The first is what we call our expert session. So, that investor panel I mentioned, the one we're hosting tomorrow, feel free to check it out on our site. It'll be a panel with JP Morgan, the SBA, and Graphite Financial. We’ll go through demystifying the stimulus, what are things that as a founder, you should think about. It’s really focused in topic areas.
Then, we're also doing wine nights, which Meggie was a lovely host. It’s on Thursday evenings, bringing together a group of eight to 10 founders and creating that community, which is what I spoke about earlier. It's so important even when you're not going to networking events, that you're still meeting new people. So, we're bringing together that community of founders to make sure that they're still connecting.
We had two founders that were working on these different initiatives but around Youth and Sports, literally on opposite ends of the US that would have never actually met. I did have another event that is now collaborating on a project together from one of the nights. So, that's an easy way to get involved to begin. For our programming like the JPMorgan problem hacking cohort, our pitch and panel events, we host dinners.
You can apply also through our site. We have an application for success. You can sign up there and then we select for the different events. So, it's a really amazing community. Again, as I'd mentioned, the goal is really to help female founders grow their businesses, give them access to that community, network, and the conversation around capital resources.
Any founder at the moment who's trying to do what you say and uses as an opportunity? What's the best way to reach out to a VC?
Madelaine: This is interesting because I was actually on the finance and ops team, so I wasn't getting that inbound. It's been really useful for me to see from what we call our venture committee, with our partners at VCs for Vinetta.
How are the best ways for you to get that outreach? It's a mix. Some of them are like, bring on the cold outreach. I want those kinds of emails from a founder, that gives me something short, sweet, concise, and catches my eye. Others are like we'd love an intro from someone else. So, go back to your network and figure out who are the right founders for me to spend time with, that are really going to advocate for me, that are interested in my business.
I think it's definitely frustrating for investors if it's clear, you just BCC and then copy and pasted the same generic email across all of them. No one likes that. It just leaves a bad taste in your mouth. You're much better off to spend some time saying like, why would I fit within your portfolio? And it means you've done a little research into understanding what is their investment thesis? What are companies just going to be the same company as you? Of course, they're not going to invest likely in you but to companies that align with what you're trying to build. Similarly, I always advocate for our founders to reach out to other founders that that VC has invested, and that you're interested in talking to ask them, “how has it been working with this VC, particularly during this time? What are the insights or guidance that you could give?” I think founders are more than happy to give you those insights because they may not have had them when they were going through that process. And they may end up giving you that introduction as well.
Meggie: For anyone who is thinking about raising capital who's just looking for support in their business right now, I highly recommend the Vinetta Project and their community. Madelaine, remind us all your Instagram so people can follow and get involved.
Madelaine: Yep, so it's easy. So it's @MadelaineCzufin, the same thing on Facebook, LinkedIn, and Instagram. Feel free to add me on LinkedIn. I do check my LinkedIn messages. So, if you reach out I will actually respond to you. I’m super excited to connect with everyone who's listened in and give some thoughts. As I mentioned, feel free to check out our program and our wine nights are fantastic and a fun way to kind of get together and see what our community is all about.
Meggie: If you're raising capital, if you might want to raise capital, if you raised capital, get involved with the Vinetta Project. Madelaine and her team are so awesome. They've been very generous in opening their contact book to us at PepTalkHer which we’re very grateful for.
“I think it’s important as a founder to maintain that grit and that hustle and make sure you don’t say, “I’m all alone in this.” Continue to reach out to your resources, your community, and your network. Continue to seek out funding.”
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