Startup founders need to prepare themselves for multiple rejections when attempting to raise capital, says the co-founder of a New Zealand startup that recently raised $1.5 million to build a global marketplace for airport shuttles and flight passenger transfers.
Over the past five years, Jayride founders Rod Bishop and Ross Lin have grown their startup into a bookings platform used by over 10,000 passengers a month across 400 airports around the world.
Jayride secured $1.5 million in January this year in a funding round, in which $50 million-algorithmic venture capital fund Follow[the]Seed participated.
The funding brings Jayride’s total investment raised to $5 million since launching in 2012.
When raising capital, Bishop says founders should be prepared for rejection.
“You’ll take many rejections, people will tell you they’re not interested,” he tells StartupSmart.
But founders should not be too discouraged, says Bishop, because an investor’s decision is tied to several other factors, such as their funds or their ability to support the startup and its team in the long-term.
“Fundraising is really a matchmaking exercise,” he says.
“The hardest part is building a business.
“There’s capital available for great businesses if you can clearly articulate what it is you’re trying to do.”
Follow[the]Seed founding partner Andrey Shirben says Jayride’s strong leadership team, solid execution track record and big future vision for growth made a compelling case for investment.
In addition to this, he says Jayride demonstrated a good understanding of the market by constantly interacting with customers to refine its product offering, and has a “very healthy” mix of business-to-business and business-to-customer clients and revenue.
“Most of the startups we see, generally struggle with product-market fit, which prevents them from building sticky products, [and] addressing a real problem,” Shirben tells StartupSmart.
“The second most common issue is lack of proper marketing strategy and the ‘we’ll build, they’ll come’ attitude.”
Shirben’s best tip for startups on working with investors is “actually not to raise any capital”.
“Bootstrap as long as you can,” Shirben says.
“Investors can be a significant headache. If you’re solving a painful problem and create value add for your customers, you should be able to generate enough revenue to sustain yourself and then if needed approach the funding discussion on your terms.”
The future for Jayride
Bishop, who declined to disclose Jayride’s annual turnover, says the new investment is being used to accelerate the startup’s growth in the US, which is its largest and fastest growing market.
Jayride also serves passengers in Australia, New Zealand and Ireland and has plans to break into Asia and Europe in the future.
Bishop says the total market it’s targeting amounts to about 3.8 billion passengers a year.
“Jayride is like Bookings.com for airport transfers,” says Bishop.
“Over the past couple of years we have partnered up with top international travel brands like Flight Centre, Amadeus, Expedia, SkyScanner, Rome2Rio and have been providing them with our technology so they can sell ground transport around the world with a single API integration.”