Approximate Read: 18 minutes

Expert Name: Eva Dobrzanska

Current Role: Early-stage advisory @ True Altitude

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Eva helps early-stage founders grow their businesses with strategic advice on capital raising, scaling a business, and accessing the right funding. So we’ll jump right in with picking her brains so founders can learn to raise capital with confidence.

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Hello, Eva. We're delighted to have you on FundingHero’s Expert Insights Interviews. Let’s open this up with an introduction. Please tell us about your background, and how you got into fundraising support? 

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Eva: I found myself working in the startup space back when I lived in Sydney. I was then working on my master's visa, which was analysing the entrepreneurial ecosystem in Sydney.

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And that's when I got to interview and speak with plenty of founders and I also found myself a job in the meantime.

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That’s when I started working with two separate startups, one of them being an R&D tax credit consultancy, with the other one at an investor introduction platform. So that was my first hands-on exposure to the world of capital raising.

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Since then I have also started my own consulting business. I like consulting when working with founders at the earlier stages so designing pitch decks and preparing to raise, working especially with founders who have not raised before.

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Earlier this year I have been collaborating with Techstars and most recently I joined the team at True Altitude which is an investment firm & advisory, currently in the process of launching a fund as well.

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So there's a lot happening here. I would say everything that I'm doing is basically in the effort to help early stage founders raise funds and this is what I've been enjoying the most, being able to see founders successfully launch their ideas. 

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And only recently, I found out that my masters thesis will be published as well. 

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FundingHero: Congratulations - that’s a brilliant intro and plenty to dig into! 

Next, please tell us, what types of founders and fundraising stages are your typical sweet spot?

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Eva: When it comes to my own consultancy V select, my sweet spot is early stage founders who are raising capital for the first time. They typically wouldn't have any fundraising materials as of yet and they still have many questions and maybe they are unsure where to start. So I'm working with these founders to help them guide them in the correct places of where to go, how to prepare, and I also design pitch decks for those who don't have them.

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Then as part of the team at True Altitude, our advisory works with founders raising their pre-seed through to series A stage. They are typically B2B and B2B SaaS tech enabled startups. Everybody's favourites, really. We are sector agnostic. However, the industries of special interest to us are software, fin-tech, e-commerce and logistics.

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FundingHero: Great! So what’s Altitude’s minimum size round that they start from?

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Eva: So there's not a firm minimum, but the smallest one that I've assisted with was raising £500k. 

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FundingHero: Interesting context - so personally, you cover a diverse spectrum, from a really early-stage to some more at growth stage. Based on those two stages, what are your favourite things about them? 

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Eva: Being able to help founders and see their companies grow and develop that's first and foremost. But also what I really enjoy is the ability to learn about all sorts of different topics and some of the great ideas that are being developed in response to the market problems. 

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So it's just very rewarding that I can immerse myself in those topics that I normally wouldn't have. One of the companies that stuck with me that we're working with, are helping to decarbonise the media supply chain!

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Through them, we have actually learned the carbon footprint of the streaming industry - so basically, all of us in the world watching Netflix and so on, and the carbon footprint of that is higher than the one in the global aviation industry! Yeah, it's stuff like that that's just super interesting. 

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FundingHero: Wow, that’s insane, I’d never have guessed that. Some of the new waves of businesses we see are incredible, aren't they?

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They are yes, and especially wellness tech, fitness tech and health tech in general. That's an area of my personal interests. We don't invest in that and we don't really work with these types of startups. But I used to study biology and chemistry, so that definitely remains to be my personal angle.

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FundingHero: So, with all of that in mind, across those businesses you've seen so far, what are the most common mistakes you tend to see, really, at that kind of early stage?

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So I think most importantly, and the easiest one to correct as well, is that there is inadequate research on the investor or the VC fund beforehand.

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‍so a lot of founders might just send their pitch deck out there in this sort of  “spray and pray” approach...

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which in the short run, it might generate more immediate results, but I think in the long term, it can erode relationships and can even burn some bridges. So I think it's very important to make sure that your funding needs are aligned with the investor you are approaching:

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You need to have a solid understanding of which stage they invest in, which industries they like, basically their investment thesis. 

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So what I always say is that a pitch deck is not a sales deck - and that's very important. So what that means is that an investor does not necessarily need to know every minute detail on how your product works,

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just one or two slides on that is enough. But what they want to see is the results -  the results that speak for themselves.

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So consider creating strong slides on your traction,  milestones, future roadmap - take them on a journey. I’ve seen thousands of pitch decks in my career and I can definitely say there is a winning formula of how to do it and how not to do it.

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FundingHero: Excellent advice Eva. Right, let's just circle back onto the investor piece for a minute because I think that whole spray and pray point is so important. If you were to estimate, how much time do you think people tend to waste when they go out too quickly and just go far and wide as an approach to see what sticks?

“Well, it really depends, but as people say - and I can confirm that as well - fundraising is a full time job.”

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‍And I think the biggest danger here, and the biggest mistake that you can make, is if you focus full time on raising and that will not yield the necessary results, you've just wasted time, -

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and the opportunity cost here is that you are not working on your business and you are not trying to get out there and get more clients.

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This is why advisers such as myself exist, because we can take some of that burden off from raising and allow the founder to focus on their business instead.

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FundingHero: That's such a key point, that opportunity cost, because no one ever puts a price on that. They don't value their time enough. And if you've got, like, a smaller round, people might think, it's only £100,000 or £150,000. I’ll be able to get that quite easily. And then they start off and they may get the first couple of cheques, or commitments, but then it just completely tails off because they're the people that are closest to them at first. When you have got to go wider, outside your network to the more cold outreach approach, then it just sucks up so much time, doesn't it?

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Yeah, and I've seen that happening so many times. But also turning commitments into cash in the bank is a completely different story.

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FundingHero: Absolutely. I think we both know the amount of the trip hazards in between commitment versus actually getting the bank. And then that leads us quite nicely on to the next point. Which is: how difficult do you see currently for founders to get investors on board and close rounds?

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Plus, with the current climate especially, are you seeing things slowing down, what are you witnessing currently?

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Yeah, so I do have to say,  compared to the heights of 2021, it has relatively become harder to raise capital this year (2022), and this is due to the market downturn, but also, last year's valuations were hugely inflated.

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Now that reality hits, we're seeing the aftermath of it, which is startups raising down-rounds.  As you’d expect, in turn, the investors will be more diligent and they will scrutinise companies harder in the process.

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That being said, the pace is picking up now, off the back of the summer slow down, and especially because we've had such a cautious year so far.

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VCs now are left with record high levels of dry powder that needs to be allocated somewhere. So that definitely signals that we will be seeing bigger rounds in the years ahead.

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FundingHero: Have you seen if there is a key difference between early angel stage cheques versus more VC money? Because as you say, there's plenty of dry powder in the VC space, but Angel's investment is discretionary, so they may remain cautious and their personal wealth impacted by the changes in the markets.

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So Angels, this is a tricky one because with most of the angel investments I've seen, this is predominantly someone that knows you or maybe an exited founder that is in the same space.

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Those cheques are more opportunistic and they very much depend on the individual circumstances. I'm an angel investor myself, but my capital is now tied up in two pre-IPO  opportunities. So I  won't be actively investing in anything new until I can cash out from them two. So I think it's hard to categorise angels because it's just very individualistic.

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FundingHero: Onto one of our favourite topics I’ve been eager to get on specifically, investor readiness! What do you think makes a startup or an early stage company really investment ready?

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First and foremost, I think the two main fundraising materials that should be understood well are a pitch deck and a financial forecast.

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Because what I always say is that a pitch deck is what the investor will be left with after the meeting.

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Let's say it's been days or weeks, even longer after the meeting, and you know, they will look at your pitch deck to remind themselves what is it actually that you're doing?

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And then secondly, especially if  pre-revenue, I would say that startups should have a financial model that explains a solid go-to-market strategy that will also outline their path to profitability.  What goes alongside that is a clear understanding of their future roadmap and how the investment funds will be used.

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So essentially, when approaching investors, what they want to see is how you will use their money to hit certain goals and milestones on your future roadmap.

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So being able to outline that is what it means to be investment ready in the simplest form.

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FundingHero: Yes, so to summarise, a clear narrative from deck to financial model. I think that's a super important point because you have to go and tell a story, that helps the investor really understand why you are going to raise and how it makes a return on investment.

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And with that money you're going to go and spend it on a handful of activities to get to these milestones that enable the next stage of growth. If you can't articulate that clearly to an investor then they're going to get turned down. They want to know you will use the funds effectively in that narrative.

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They need to assess if you are raising the right amount of money & will you spend it wisely to get to the next stage? Those are some of the key doubts that pop up in their mind. 

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Absolutely. And that's essentially how VCs make decisions. Especially 

if we're talking about the down-markets and VCs being more diligent in their investment decisions, they will be looking at their internal rates of return, they will be looking at how much that company can be worth later on  in their portfolio, and if they have sufficient runway to realistically get to  their next round.

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FundingHero: And then I suppose from the other side then, what kind of damage have you seen when founders haven't really been investment ready and they've jumped in too quickly?

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So, for example, I've seen startups who simply ran out of money and they needed to close shop simply because the fundraising efforts took up all their time and the business suffered.

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And as I mentioned before, their focus was taken away from the day to day operations, securing clients, selling, and making money, which is something that can happen.

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I have also seen founders whose reputation basically preceded them, and not necessarily in a good way. So you really have to make sure to tread carefully, especially in the Venture Capital space, because nothing gets done in a vacuum - and investors speak with each other.

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FundingHero: That's a really good point about the industry. People talk. Things circulate around. It's really important isn't it to make sure that you don't put false information out there & mislead. Reputations can get damaged quickly and investors don’t like having their time wasted. With fundraising, you won't typically fundraise only once, it will be a recurring thing, so you need to make sure you can build up credibility for the long term, right? 

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Yeah, so here the approach that I like is called “always be fundraising”, which is to say, build your relationships with investors, even when you're not raising, so then it becomes so much easier to progress with them when you actually start looking for money.

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FundingHero: Perfect segway into the next question, which is, what's your number one piece of advice for any founders out there that are considering a Pre-Seed or Seed funding round?

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Yes, I think just that very one - “always be fundraising”. But then another thing that I would suggest, especially to pre-seed founders who are pre launch, is to communicate your traction.

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 It’s the number one concern that I hear at the early stages where founders would say, “we're pre product,  pre revenue, and we have no traction yet”

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You should be able to find some. There's always some traction, and it's not always financial, but there's plenty of other milestones that can be identified. Things like engaging with an advisor, or making a key hire, or let's say a major distributor has signed  a letter of intent. The fact that you're in discussions with a strategic supplier, or you've identified a pipeline of early adopter clients should go on the traction slide, because this is what investors want to see; how much traction do you actually have?

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FundingHero: Great insights, thanks Eva. So, change of direction now to something we see a lot of people talk about on social media, about how founders should build personal brands, especially for those early pre-seed stages where the company might not have as much to shout about. What are some of the good things that you've seen around founders trying to build their personal brand?

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Going alongside with the advice to always be fundraising, I think putting yourself out there on networking events, building relationships, and then maintaining them, is really good to help you build a personal brand, specifically aligned to capital raising.

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It would also be good to have an investor newsletter coming out to potential investors and this doesn't need to be a formal sign up form;

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This can be simply just an email with all the investors on BCC. Just update them on how it's going.

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Naturally, I'm a big fan of LinkedIn presence. I know from my own experience when I'm speaking to founders and investors, and they would say; “oh yeah, I've seen your posts”.

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So the case of personal brand helping you is definitely much more intangible. And you won't always see it, but it is out there and it will help you in many indirect ways.

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And it's an inbound sales channel as well. I never went out there to seek clients for myself. I just got messages coming in to me, and that's how I normally would work with founders.

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And even just the value of putting that information out there and helping someone because they can read into it. Someone told me that I should put all of my posts together in an ebook one day. One day when I have enough time, I might give it a go!

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FundingHero: I really love that one point you just touched on, about inbound sales leads. That's where I like to talk about trying to gain more value than just cash from a raise.

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Also the point about when you're putting yourself out there. Whilst you are more publicly present whilst you are fundraising, you're going to get those inbound opportunities as well. 

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The takeaway is the fundraising process can bring much more opportunity, than just the cash you can go and get.

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Yeah. And not just potential clients, but also, with enough traction and personal branding, founders might find that it will be the investors reaching out to them, wanting to invest.

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So that's a win win.

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FundingHero: Absolutely, couldn’t agree more. This next question is a bit of a funny question as it’s something that we both see on LinkedIn quite a lot:

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Some people are completely anti-pitch deck, saying that it's outdated now and it's run its course and there should be a better way.

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Whilst, there are other people that are pure advocates of it and say it's fundamental because investors are used to that kind of consistent format.

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Where do you sit in that debate?

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Yeah, as mentioned earlier, to me, pitch decks are still very much important because that's the one piece of crucial information that the investor is left with afterwards.  Also, if you are doing cold outreach and you haven't met the investor yet, you need to send them something.

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So it will be the pitch deck that you're sending. I think the only important thing is basically to make sure that the information in it is to the point and actually useful to the investor. You need to make their life easier and make it straightforward to find all the information that they're looking for.

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FundingHero: It's quite interesting how the pitch deck space is evolving as well now because I saw a few weeks ago there was a report from DocuSign capturing some of their stats that they capture from all the decks sent via their platform. 

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It shows the space is evolving in a really interesting way through data and connectivity but the core of the pitch deck is still fundamental.

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Moving on, tell us, why should founders ultimately look to work with someone like you when seeking investment, rather than trying to do it themselves and try and save some money?

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So especially in the case of founders who are thinking to raise capital for the first time and they might be unsure where to start, or maybe they are unsure of who could design their pitch deck, that is why they should work with a capital raising expert.

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Because with a pitch deck, like I said earlier, there is a winning formula to it. You need to know what investors are looking for, what slides to put in, what to focus on, and so on.

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So that's the value of working with a good advisor at the earlier stages, where you are preparing to raise. But then, once you're raising, the value of working with an advisor or an investor introduction platform, is the time savings that you achieve and the correct allocation of resources, so to say.

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So that you - as a founder - can focus on the day to day operations: selling, getting clients, growing the business, while the advisor works in tandem with your team on the raise to optimise the process. 

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They work to help to communicate everything that they've been doing with potential investors. That's what we do with our clients at True Altitude.

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The founders are focused on the operations, day to day, hitting new milestones and achievements. And we stay in touch with them and communicate that to potential investors to secure the meetings.

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And I think it's  quite a synergistic relationship, because in that way, the startup has valuable things to be communicated to investors, but only because they are focusing on that, rather than devoting all of the time and resources to fundraising and having no new milestones to communicate.

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FundingHero: It’s an important point on balancing time and where the founders focus is best placed. You know how to manage the process and bring them in at the right time.

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It's a long campaign. Some campaigns can be six months of prep and then three to six months of execution.

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So an example that we had is, we were campaigning for one client, helping them raise, and we were following up on a number of investors communicating the traction that they gathered.

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So we sent off one email communicating all the new clients, the results in revenue, etc, and so on. Then it was just the next day, one day after the said follow up went out, the client had one more major announcement to make.

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So we just decided to send one more email where we said, by the way, on the back of that, the founder just informed us that this thing has also happened.

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And literally within ten minutes, we had an investor come back to us, saying “Get me in for a meeting”. So sometimes it's very, very personalised, and just natural of how you should communicate with the partners at the VC firms but timing is everything.

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FundingHero: Well, I think it just shows the depth of expertise that someone like yourself can offer because it's knowing how to read the signs and how to maximise an opportunity.

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The big benefit I see from your service is that early founders are going to probably fundraise three to four times in their journey. So if they learn the ropes from the experts early on, then the future rounds could be much easier.

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That's a huge benefit. We've got the resources, we've got the time, we do it full time.

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So we're attending industry events, VC meet-ups and so on. One of the latest VC conferences that I've attended, I met an investor with whom I was already in conversation and he went , “oh yeah, that's right, we spoke and you sent us over deal XYZ. Yeah, I'll have a look at them tomorrow.” And the next day he comes back to me with a decision.

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So it's quite opportunistic to be able to even bump into someone and remind them of the conversation, but it’s the benefit of being in the fundraising space when a founder isn’t.

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FundingHero: I'd love to know, what kind of changes would you like to see in the fundraising industry as a whole?

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Primarily, the change I would want to see more of - it's already happening - is for the VC industry to become more inclusive and more diverse.

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There are funds out there who are investing in underrepresented minorities and they are diverting more funding to women, immigrants, people of colour and underrepresented parties.

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I think the change is definitely starting to happen and it will be a very positive one.

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FundingHero: Completely agree. This change will give the ecosystem a much healthier balance across the whole funding spectrum and with the shift towards data focused decision making we can start to remove bias and ensure a fairer distribution of funds. 

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One of the things many talk about a lot within the fundraising space is about how investors back the founder, not the idea. What are your thoughts on the strength of the founder versus the idea?

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Over the last three months, I have spoken with over 100 of VCs, all early stage, and I asked them all the same question, which is, what do you look for in early stage startups?

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The founder and the team element comes to the forefront of considerations. It's the ability to be flexible, open to feedback, coachable and able to pivot if the situation needs it.

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I'm still in touch with a number of the startups that were part of this year's Techstars cohorts. I've seen their businesses before and I've seen their businesses today and many of them pivoted, changed their assumptions, business models even.

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I think that's what is   super important, that your business can change. But ultimately it will be the founder who needs to oversee this change and deliver it and basically get through it.

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So I think at the earliest stages, the biggest bets are on the team and the founder itself. Then once you've got the product market fit and if you're approaching Series A, Series B, that's when traction and financials become more important.

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FundingHero: That last point is really important. It's such a nice shift from the early pitch decks that shift the emphasis from focusing on the founder early on to focusing on your team & business in the later stages when it's well established. In the early days there's a lot to prove.

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Yes, which is why most of the accelerators and VC investors will be looking for serial multiple founders, especially ones who have one exit under their belt.  

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Or at least people with domain expertise. Because sometimes this could be your only proxy of your ability to deliver whatever it is that you're building.

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FundingHero: Thank you Eva, any incredibly set of deep and fascinating insights from someone who walks the walk everyday in this space! I thoroughly enjoyed our chat! Any final thoughts you want to sign off with and share with founders wanting to fundraise successfully?

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Maybe just to echo that point about putting yourself out there and building that personal brand and presence to always be fundraising, this is super important, and it's vital to make use of the resources available to you out there to avoid those mistakes many make.

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You can connect with Eva on LinkedIn here. 

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Founders looking to fundraise?

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Finally, once you are fully prepared, it’s time to raise - and you guessed it - we have a plan for that too! Our ‘Raise’ plan offers you everything in Learn + Prepare and additionally you get an initial investor database to kickstart your search, it acts as your own investment CRM to track those investor commitments as they start to land. 

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