Like many startup founders, I was excited to hit the fundraising trail and begin pitching venture capitalists my seedling business after many months of late nights, early mornings, setbacks, breakthroughs, research, and planning.

As any budding entrepreneur should, I spent countless hours researching every detail of how to raise investment.

I read every book, blog, and article I could find, as well as watching YouTube advice videos from the likes of Y Combinator and other VC firms until I could pretty much recite the script.

After absorbing all this knowledge, one thing was clear: it wasn’t going to be easy. Especially for a solo founder that wasn’t an ex-senior employee at Google or Dropbox. So I was prepared for the rejection, but decided to soldier on.

Beginning the journey

In addition to all the articles and books I read, I held a number of preconceptions about VCs and what it’s like to raise money:

VC’s get thousands of applications a week

They want to ‘get’ the problem and solution, and ‘love’ the team

The market needs to be big

Every VC firm has its own sector preferences

Warm introductions are best

So there I was. Investment-ready with pitch deck, financials, and product spec’ ready to go — along with an extensive list of well-thought-out VC firms on my target list.

Out of thousands of applicants, how was mine going to stand out? I was confident in my pitch, and in my business, but surely these guys get some sort of ‘startup fatigue’ which desensitizes them to a great opportunity?

In fact, we know they do! VCs regularly write about how they rejected and missed out on incredible startups that go on to become billion-dollar companies.

As I persevered through the process of contacting VCs, it was clear there was a disparity in how firms want to be approached. Some insist on completing a soulless online form on their website, where you feel as though all your hard work is going straight into some bottomless pit of an unmonitored inbox.

Others kindly provide you with an email address, whilst some will only engage via mutual contact as a warm introduction.

I started initially with the online forms, as I knew these would most likely take the longest for any kind of response (I was right).

I then applied some business development thinking to the process and thought of it as a sales process. So I began to follow this approach:

From my experience in business development, I knew that warm introductions were always best. But as someone who doesn’t know any VCs or acquaintances of VCs, how would I get my ‘in’? Who can I approach that has regular contact with investors and would be happy to make an introduction?

Then it clicked. Lawyers and accountants!

I spoke to six different lawyers and six different accountants, each time presenting myself as a potential future client, looking for representation as I raise funds, which I was. A small handful were happy to recommend me to VCs they knew and thought would be interested.

And this worked! This ‘backdoor approach’ is how I got my first few introductions to VCs which resulted in Zoom calls.

From start to finish, this whole endeavor must have taken about two to four weeks until I had a meeting booked. In that time I had contacted dozens of VC firms in the ways mentioned previously.

The ‘official approach’ resulted in a lot of silence, a couple of rejection emails, and one ‘we love it, but we work with a close competitor.’ That particular response, by the way, came three months later!

The first actual meeting with a VC…

The day of the first Zoom meeting had arrived. I felt prepared, but had a sleepless night beforehand and was very nervous. I had rehearsed my pitch countless times and knew it was strong from the critical feedback I had received from many different mentors and advisors over the past few weeks.

In the end, the meeting was… awkward. If I were to describe my experience of the first meeting with a VC, having just come off the call, it would be this:

She seemed very rushed, a strict 30 minutes with no clear structure or opportunity to screen-share and walk her through my deck.

She was checking her emails and seemed distracted throughout, which put me off.

My pitch deck contained a suggestion that I would be open to exiting in five to seven years, as I thought VCs wanted a capital event — I mean, it’s how they make their money, right? Apparently not. She referred to it as a “turn off.”

Right upfront, the VC stated that she liked the concept, but thought the market was too small.

In closing, she stated she thought the market was almost too big. I’m not sure how well she was listening.

The bottom line ; she wanted to see a team and more traction. An angel round first may be a better option.

Be under no illusions, hearing this after all your relentless work as a founder can be soul-destroying. You know you shouldn’t take it personally, but you do.

I do honestly believe though, in hindsight, that every founder needs some sort of rejection and critique to help develop the resilience you need and ultimately help you become better.

It’s all fair and well being attracted by the allure of raising a big institutional round early on in your startup’s lifecycle, but having now experienced the reality of fundraising, and pitching my seedling company to half a dozen or so investors, there are a few things you might want to consider before pitching your own startup.

So here are the seven key lessons I learned which I hope will make your own journey much smoother.

Startup founders heed this advice!

VCs say they’re open to being approached at any time in your startup’s lifecycle, but that’s quite often not the case. This is VC speak for; we want an A+ team in place, and we want traction — but can’t specify what traction looks like — then you can approach us.

Be prepared for the first Zoom or meeting to be brief. You will be challenged, and it will seem as though they’re not listening (although some actually do).

Don’t waffle. Drive home the problem, and your unique, game-changing solution. Why are you going to solve this problem better than anyone else?

VCs want a big market, but not too big. Some of the tier one firms like to talk about ‘creating your own market.’ Of course that’s absolute gold, but easier said than done when trying to pitch investors as a first-time founder. Still, you need to know your market and users really well.

Warm introductions are definitely the most effective, if you can get them.

Fundraising is a full-time requirement to do it effectively. Be prepared for the huge time commitment and a lot of rejection. It happens to everyone!

I’m not going to say don’t take it personally, because I did, and you will too! But get over it fast. Learn, improve, and move forward.

And finally, a little bonus lesson, raising a VC round may not actually be right for you. It may seem like the most attractive option, but for some founders — like me — raising an angel round or finding an experienced co-founder who can help you bootstrap an extra year to prove traction may be a better alternative.

Good luck!

How transparent should your brand be?

We’re living in some polarizing times, both online and IRL.

I genuinely feel like there’s just one thing we can all agree on: we don’t know who and what to trust.

In this era of fake news and of huge companies that act in unethical and even illegal ways, it’s understandable that people want — and demand — more from the companies they buy from.

It’s why consumers want brands to be more transparent. And I’m seeing many brands that are certainly responding to that — more and more businesses over the world use transparency marketing to some degree.

But how much do consumers actually care about transparency? And how transparent should you be as a brand?

“Real” brand transparency vs transparency marketing

Let’s start off with a seemingly simple question: what does brand transparency actually mean ?

The shortest answer to that is probably “being completely honest with your customers.” But in reality, brand transparency goes way beyond that.

There are a lot of brands out there that are using transparency marketing in a variety of ways.

Take Buffer , for example. For over seven years now, the Buffer team decided that transparency needed to be one of their top priorities. In fact, they decided that radical transparency is the best way to go: in other words… they’re honest about everything .

Right at this moment, you can look up a view-only Google doc where you can see the salaries of every member of their team, from the founder and CEO to each and every person on the finance and engineering teams; just like each employee can see their colleagues’ earnings — and the reasons why they’re making more or less than them.

You can even find last months’ report on Buffer’s revenue and user numbers. Basically, their goal to be completely transparent impacts every aspect of their business.

Other brands leverage transparency to a different degree: they focus on certain aspects of their business or on a particular campaign.

Patagonia , an outdoor clothing company, has had a huge focus on social responsibility right from the start, going so far as to become an “activist company.”

And in order to prove their passion for social responsibility, they are extremely honest about the materials they use for their products and about how they make their products.

Fairtrade, humane working conditions, and recycling — among many others — are often discussed on their website, with the company sharing all the details about their moves towards better materials and better working conditions.

Other companies only use transparency in very particular cases. Apple , for example — one of the world’s biggest and most popular brands and one that has been heavily criticized over the years for various issues — namely leverages transparency when it comes to government requests for customer data across the globe.

But when it comes to other areas of their company — i how they make their products, how they run the company, and how they treat their customers — they often make some considerably…let’s say, blunders.

There’s of course, Antennagate , when the iPhone 4’s badly-placed external antenna often led to dropped calls.

And their response? You’re holding it wrong.

And there are also the really big issues: the Chinese factory laborers . The aid they got from the Irish Government.

All huge issues that were not dealt with — or addressed — in a transparent manner.

And yet, if there’s one thing all these three companies have in common, it’s that they’re all highly successful in their respective fields.

Businesses of all shapes and sizes have started to adopt transparency marketing to some degree, but while for some it’s an important or even vital part of their company culture, for others, it’s simply something that they have to do in the current environment.

So how transparent should your brand be?

A recent study from Sprout Social , which surveyed 1,000 consumers, found that 58% of them believed that companies were morally obligated to be more transparent; plus, 73% said they’re willing to pay more if a brand is being completely transparent.

At the same time, there are a lot of examples just like Apple: brands that circumvent the law, who break legal and moral barriers and brands that aren’t always honest about their misdeeds.

And yet…people still buy from them. Apple’s iPhone sales in 2018, even with the Chinese factory scandal, were still on the rise .

I’m not judging anyone either: I’m sitting here writing these words on my MacBook Air while occasionally scrolling through my iPhone for some quick research every now and then. And I really don’t want to switch to Android.

My point is this: people value transparency when it comes to the brands they buy from — but they’ll also forgive a lot if they love your products. And not only that but our memories are short; we’ll forget all about a scandal as soon as a new one comes up.

But at the same time, we are increasingly conscious about what we buy and where we buy it from. We, as consumers, expect brands to be honest with us — or at the very least, not hide anything important from us.

I’ve always used that as a mantra, albeit unconsciously and not as a marketing tactic – more in my day-to-day dealings with my clients rather than as part of an actual strategy: being honest with them and managing their expectations every step of the way.

Did you know we have an online event about digital marketing coming up? Join the Re:Brand track at TNW2020 to explore the latest brand marketing tech, trends, and challenges.

4 tips for startups in the booming plant-based dairy market

People care about climate change and animal welfare — so it’s no wonder the demand for plant-based products has exploded in the last couple of years. The alternative dairy market is expected to triple over the next decade, reaching a whopping $32 billion USD by 2031 .

But what exactly is it that will determine success within this fast-growing industry? And what do startups need to know in order to attain partnerships with the corporates that can get their products on the map?

Well, in my experience, it all boils down to four key lessons — but let’s begin with outlining the research I’m basing this on before diving into each of them.

Getting to know the field

My team at TNW works with industry-leading companies and governments all over the globe looking to partner with or support small innovative businesses in expanding their reach. Two of our most interesting recent projects involved scouting plant-based dairy startups for industry leaders in the fast-moving consumer goods (FMCG) sector.

My following insights derive mostly from working on this report , in which the TNW scouting and research team, along with nlmtd , mapped a couple of the most promising startup-corporate collaborations in the plant-based dairy space.

Of course, I recommend you check out the full report — it’s a thrilling read — but what we basically saw was that while the number of bets on plant-based startups has been growing, the bar remains pretty high for the adoption of these products on a large scale.

So, here are my four key insights for startups and scale-ups who want to attract the right partnerships to succeed in the alternative dairy market.

Tip #1: Nutrition is one, naturalness is two

What I heard a lot in my conversations with industry leaders was that nutrition and naturalness are often misunderstood by consumers and sometimes miscommunicated by startups.

Claims that refer to the amount of a certain natural ingredient (for example, ‘this product is 35% almonds’) say very little about the level of naturalness of that food product.

In fact, naturalness, as seen by FMCG leaders, has more to do with the content of artificial sweeteners or preservatives — as well as other elements.

A study conducted by Hero Group with the University of Murcia and ETH Zürich, published in 2017, provides a helpful three-part organization to define naturalness:

Nutrition, on the other hand, is more straightforward. In dairy, it often relates to the protein content versus the levels of fat and sugar. While high protein amounts are highly desired, fat and sugar are unwished for.

The balance between the three is really key if your aim is to impress nutrition experts in FMCG corporations. So if you want to woo partners, compensating the taste of your plant-based ingredient that is high in protein with loads of sugar might not be the best way forward.

Tip #2: Taste and texture as the gate-keepers of future demand

Another two criteria that FMCG corporations repeatedly brought up when discussing new plant-based dairy concepts were taste and texture.

It didn’t matter whether we were talking about milk, yogurt, butter, cheese, or spreads — taste and texture cannot be left aside if the goal is to choose a product that consumers will change their diets for.

While the untapped demand for plant-based products is big, the curiosity of consumers for product experimentation might not always be this high.

Once a few players achieve in plant-based dairy what consumers are used to experiencing in traditional dairy products, the market will be theirs for the taking — or at least that is what industry leaders bet on.

Currently, the levels of taste and texture of plant-based dairy products vary a lot from product to product, and that is of course natural to the experimental and radically innovative period that the market is in.

But when consumer preferences consolidate, a premium experience of taste and texture is going to make the difference between a successful and a forgotten plant-based dairy brand, especially when we talk about indulgent dairy products, such as flavored yogurts and cheese.

Tip #3: Cheese is the Holy Grail

Cheese alternatives are considered the next frontier in product development and plant-based innovation.

The market of alternative milk and yogurt — either made from legumes, nuts, or grains; or developed in laboratories based on cells — is in a period of expansion and global adoption. The market for alternative cheese is growing alongside the new milk trend, but at the same time, it faces more scrutiny from traditional dairy and a level of skepticism from consumers.

For an ambitious startup, a challenge like that is just another word for a business opportunity. In fact, we can easily observe the huge appetite for entrepreneurship in the plant-based cheese category.

The way things are set up now, to me it seems like startups in North America, Europe, Latin America, and Asia are working non-stop around the clock to find what is the best possible combination of ingredients and which process produces the tastiest plant-based cheese. So you better be quick if you want to beat them to it.

Tip #4: Online, transparent, and (better if) local

Sustainability, animal welfare, dietary requirements, healthy lifestyle. All of these are consumer trends that have been directly boosting the growth of the plant-based dairy industry.

Complimentary to that, I also see trends of convenience, consumer ethics, and community-driven economics are expected to have a significant impact on the direction in which plant-based entrepreneurship moves.

Our scouting research and discussions with FMCG industry leaders indicate that the need for convenience and flexibility creates space for new product formats as well as business models.

For example, consumers are already open to experimenting with subscription models, in which plant-based products such as oat and almond milk are delivered to their door at regular intervals of their choice. Another growing product offering is ready-to-go plant-based yogurts and milk bottles, a format already known by the traditional dairy industry.

But I also feel we can’t overlook the fact that consumers have a broader understanding of the impact their choices have on the prosperity of society, the environment, and the economy.

Information and transparency are key for individuals to build trust in both new and traditional brands. This has led to a preference for plant-based products that openly share information about the sourcing of their ingredients, as well as production methods and impact across the value chain.

Sure, established global brands may be far ahead when it comes to scale, expertise, and reach — but young companies can outshine them when it comes to connecting with consumers.

So if your startup is aiming to make big waves in this space, I recommend you work with the local communities and wisely choose the source of your products. That way can stay ahead by being more in touch with what future generations really want.