Seems like positive response and several positive conversations. My impression from your notes is that it seems quite binary: when it resonates, it really resonates, and when it doesn’t, it really doesn’t.

Possibly/likely our most successful of outreach

Other

❌ VCs - not allowed, or not interested in investing in accelerators

❌ UK angel syndicates - require SEIS/EIS businesses

❌ UK Platforms - (first two are largest networks of investors in the UK):

❌ Envestors - we can pay to advertise (£1K), but they said they wouldn’t be willing to proactively advertise it to their audience: “Regarding your question on investor type, not necessarily. It's just as it's not our bag we wouldn't feel confident on bringing value to the round. The fundraising co's we work with on a direct basis through our Envestors Private Investment Club we charge a success fee of fees raised. If we don't have confidence we can intro capital then it there isn't enough buy in for us. “

❌ AngelList - no longer able to access their investors unless you run the entire fund via their platform (and USA focused)

❌ Seedrs - must be a UK registered business

Warmer outreach

LinkedIn company posts directing to webinar

Generated some responses, and likely helped in the conversion of Alexander at LMS

Several of the attendees say that they have invested in 1 startup over the last 12 months, so it’s possible that this type of deal could be perfect for them - they want to get exposure to startups and this is a safer way to do that.

That’s the positive look at it, the realistic one is that they don’t have enough capital to really get us to our goal.

Working your network

Accountants - Our highest converting channel, further demonstrates the better they know you and the brand, the easier the conversion

Connections of connections - This is likely the best place to focus subsequent efforts. More on this in the ‘what’s next’ section below.

Summary of our performance

This part is to reflect on what we can double down on, and what we can learn to ensure we don’t make the same mistakes as we move forward

What we did well

Excellent conversion rate

When we have conversations with people who get it, they really like it.

Incredible resources

The pitch deck and, in particular, the Miro board are both excellent resources and really explain our offering so well.

Incredible resilience

It’s been such a busy and difficult couple of months, especially for you personally, and yet you’ve managed to stay on top of everything and persevere with incredibly high calibre outcomes at all times. You should be highly commended for that!

First loop was great

In the initial process, we tested the market (soft close with accountants), build a product based on those conversations, presented it, iterated on it as we presented it and then sold it successfully to get our initial investors.

What we could do better next time

Building the product instead of testing the markets’ needs/wants

As we both know, the most critical thing with any product is to get in front of customers as early as possible. We started off doing this great with our own accountants with the soft conversations.

But then, when it came to what would come after that, we fell into the trap of building the product (the improved Miro and pitch deck) for more than a month without talking to any users.

Too much optimism

We should have been more pragmatic at the beginning, looked at our pipeline, realised that we didn’t have enough there and started testing the market doing all of the cold outreach we are doing now.

If we’d started the process by saying we have X amount soft committed, how are we going to oversubscribe this round (rather than hoping our existing network would just about fill it), then all of the stuff we are struggling with now (and therefore having to rush) could have started much earlier - before having to build out the full versions of the pitch deck and Miro.

Not treating it like a true marketing/sales process

Due to the order in which we did things - focusing on perfecting the product before testing the market, we left ourselves with about 6 weeks (from mid-April to June) to fill a round.

True marketing campaigns (especially those selling $5-digit products), take many weeks of concerted effort. Due to our time constraints, we’ve approached this in an unstructured, and therefore I’d argue inefficient, manner. Reducing our effectiveness and reducing the leverage of our time (e.g. doing things manually ourselves that should have been outsourced).

Small target

This one isn’t something we did wrong, but needs to be detailed somewhere.

The target audience for this marketing campaign is tiny: basically, it’s Australian angel investors. UK is problematic due to SEIS and globally we can’t target VCs. This gives us a tiny target to hit.

What’s next, what else can we try

Working your network

This is the strongest area, and is likely to have the highest success rate.

How else can we double down on this?

Scouring every single contact on your LinkedIn

Double down on people that definitely should have access (like Richard Sargent etc)

Speaking individually to every single founder that went through the platform

Existing investors

What about the new guy that just committed? Can we tap into him?

What about Shaun and Aly? Have you asked them both directly about this?

Cold outreach

LinkedIn DMs

I think this needs to focus on Australia, because UK market is obsessed with SEIS.

I know it’s tedious and has low success rate, but the fact that you’ve been able to generate 1 conversation from it is actually very encouraging.

The question should be - how do we scale that outreach so that it’s not so time consuming for you.

That said, you’ve mentioned that Australia investor market is very small, so if scaling up the outreach, we need to be careful not to spam it and cause more harm than good.

Conferences

Are there any more like the one you went to? Seems you had a really strong result from that. How can we scale this as a channel?

Family offices?

How do we get hold of them? Also, would they actually want a deal this small? They’re dealing with such large sums of money, it’s very unlikely that they’d do a deal of this size (as opposed to sticking a load of money into a well established LP), plus they typically seem to go for public equities too (more predictable ROI).

Focusing on Australia

All of our wins have come from there. There are likely a few reasons for that, but the most predominant ones are of course:

SEIS taxes not relevant to them

Access to people (Aus seems easier to get people into a conversation)

Relaxed appetite to risk

Angel syndicates

You are already tapping into these indirectly, is it worth also tapping into them directly via applying?

Leads from the event and the webinar

Event

Two categories here: direct leads, and connections to direct leads.

As you of course know, these are both highest priority. I have full confidence in your ability to tackle both of these, but just need to be sure that you have the bandwidth and headspace to do so.

How can I be helpful here?

Webinar

Ensuring we have a sales call to action as part of the webinar

After the event, looking through the list of attendees and picking them up individually.

How can I be helpful here?

Paid services

Crowd funding sites

What is the Aus landscape for these?

UK I think we’ll struggle, since they’ll probably not understand our investment structure (and might not even be allowed, like on Seedrs).

What about deal makers?

Like the one Adi has connected us with, they are out there and they should be easier to have conversations with but, I fear we will struggle for the following reasons:

The ones that work on commission will probably be less interested in us, since our deal is more irregular.

The ones that work for a fee are probably less good. Plus we can’t really afford them!

Do we want to give away 5% of the raise in fees?

What about sponsorships?

Are there publications that we can advertise in? We’d likely have to do it indirectly, e.g. advertise a webinar or something, because I’d assume there are regulations around promoting investment deals (as there are in the UK).

Overall conclusions and recommendations

Quick summary on progress

It’s very easy to forget that sometimes progress isn’t necessarily from ‘yes’, but it’s also from ‘no’.

We’ve made a lot of progress:

Ruled out VCs

Ruled out UK angel syndicates

Ruled out UK angels

Tapped the EAH network

And there is still more to go:

The rest of your network

The connections from the event

The webinar sign ups

Aus syndicates

Cost benefit analysis - should we continue?

Based on the existing pipeline, how confident should we be that we’ll hit the $500K mark? Let’s look at it objectively.

Current status

We have $200K committed.

You have new conversations with around 3-8 people.

It’s very possible that they could provide enough to close the round (3 people at $100K each or 8 at $40K each).

However, that would require a 100% conversion rate, which just doesn’t seem realistic and certainly would be requiring an extreme dose of luck.

Therefore it’s more likely to perhaps be around the $150K.

Ability to generate more leads

Based on everything we’ve tried so far, we don’t have any reliable methods to scale this up, therefore we shouldn’t count on any additional leads coming to us. It’s probable that we will generate some more, but we have no concrete data to back this up.

Conclusion

It’s probable that we will get much closer to the target from the existing deal flow, and it’s possible that, with much more cold outreach, it could be generated. But it requires a hard slog and we need to be very practical about that.

It’s not to say we shouldn’t do it, but we need to not make the same mistake we did before - we need to approach this as we would with any part of business - methodically and without basing it on luck.

So, we need to be able to answer the question: where are the remaining leads going to come from?

We’ve been thinking about this for many weeks now and we’ve tried many things, which is great because we can rule them out, but we need an answer to that question to warrant progressing in that direction.

Without an answer and a plan to backup the answer, we have no reason to expect success.

Next steps

Given where we are and based on everything I’ve outlined above, my expectation is that, by the end of June, we’ll probably be somewhere between $300-400K committed.

So, given that I think that, what do I think we should do next?

Diversify

As per the above, I think the best chance we have of generating more interest is going to come from the existing deal flow, and anything else that you can generate from your network.

Of course do correct me if you can think of anything else, but I am really struggling to see where I can help with direct lead generation. I actually think we’re now at a point where the best way for me to add value to the business isn’t in trying to generate investment deal flow, but to instead, put the majority of my focus elsewhere, and be immediately ready to support the fundraising.

Thus, we diversify - you continue to nurture and generate deal flow from the existing pipelines that you have access to, whilst I through the various backup plans/alternative ideas we could do, if we land on the number I hypothesised at the beginning.

Examples

So, where should I focus my time for the next month then, if not directly on trying to generate new leads? Below are some ideas.

The other thing that is worth mentioning whilst reviewing these is that we will likely be wanting to do some of these anyway, so it’s good to think them out at some point to draw conclusions in either direction.

Agency model

Should and could we pivot the concept and utilise the investment to be able to establish a digital agency?

Ultimately, we know that there is a need for it - 445, Tax Torch, and I’m sure many others would have found it incredibly useful if we had been able to offer this. So, it’s likely that we would look at doing this at some point any way.

This would consist of:

Thinking about what would be required, considering what the business roadmap might look like, how quickly could we start generating revenue, what potential expenses might there be. Essentially, it’s critical not to rush into these things - we can likely predict a large amount of what would go wrong in advance.

In the process of creating the agency, it’s also possible that we could actually massively help our existing portfolio by potentially rebuilding Tax Torch or 445 as a use case for the process, immediately generating subsequent cashflow from them.

Alternative verticals

Is it worthwhile to scope out what it might take for us to consider other verticals? This one might be a bit more difficult, because a lot of this would likely require you, and the whole point of this process is to diversify our efforts, keeping you focused on the fundraising (with me supporting, of course) whilst I explore these things. So, this one might not be a great idea, other than perhaps an hour or two where I document my thinking on it.

Studio model

Another useful planning process - what would it take for us to get to this point? What would it mean? What does cashflow look like? Could we even afford to sustain growth this way if we wanted to? Would it make sense to do this within the same niche?

Angel syndicate

From our LinkedIn outreach, it’s clear that there is some opportunity here. The question is - what does it look like? Is it a revenue stream? Or just a supporting function? Or something else entirely? What other value could it add to the business? How does it plan into the other aspects of the business e.g. by having this successfully running, our own future fundraising becomes very much easier, as does the idea of a studio model. What would it take to scale it? What would it potentially look like as a business unit? How much effort and resource would it take?

Subsequently, recalculating for investors

If we do genuinely think that we’re going to end lower than the target amount, we need to spend some time re-thinking about what we’re going to offer to them. For instance, if we were planning on doing any of these ideas, we’d want to think it through thoroughly in terms of what that structure might be - for instance, if we have a roadmap of an agency and different verticals, do we want the original investors to be included in the additional verticals etc?

And... recalculating for ourselves

We both need sustainable cashflow going forward. Above and beyond that, what can be achieved by each of these models? For instance, how do they interlace to be able to create a long term cohesive plan that is worthy of our time? e.g. we don’t want to just roll on into something that doesn’t have the long term potential that we want, but by being strategic with our approach, there is a real opportunity to build an empire here, but it won’t happen by accident.

By taking some time to really map out the different avenues, and to strategically think long term, we could conceptualise a roadmap even more valuable that we had originally planned.

Alternative for investors with lower amount

Another potential idea is that we revisit our initial plan and make it work for 18 months instead of 24 and then just get started with with the funds raise and rely on the cashflow from the business to, hopefully, allow us to finish out the 24 months.

Conclusion with an example

Idea 1 - Diversified model

As a very quick for instance: let’s say we continue to get revenue from the existing model, we add digital the agency model in, and start generating revenue from that too.

By end of year one, it’s a challenge, but feasible for us to be cash positive (including paying ourselves good salaries). Then, in lieu of revenue, we can strategically start taking equity in the startups. Then, we hire to replace our roles in EAH and, in doing so, we learn how to replicate the model. Then, we take the whole model and repeat in another vertical.

In two years, we’re operating a cash positive business in two verticals with probably a smaller equity portfolio, but one that has the potential to scale much more rapidly. Then perhaps we incorporate our own studio play into the mix as well, and so on.

Obviously an excessive amount of hypotheses in there, but the point stands - by thinking about this carefully, perhaps there is actually a better plan which actually doesn’t require us to prove ourselves for two years and then go out fundraising again. This model has a slightly slower start, but is much more sustainable and, I think, possible has an even better ROI.

Well, better is subjective, but it has a much more clear ROI - either the different parts of it start working, or they don’t. It would be very clear how it’s going. The existing idea relies entirely on the equity in the startups to generate cash, whereas this is a diversified approach where we get the benefit of large exits, but also the stability of cashflow.

Idea 2 - Reduced timeframe model

Maybe this is the simplest thing to do: at the end of June, once we have clarity about the amount raised, we go back to investors, show the additional paying pipeline that is emerging recently and we say “we’ve raised $X, but we want to continue anyway because we have $Y in the pipeline and we think that we can get the rest of the way there with the subsequent pipeline that we will generate”.

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