After bagging $20 million in February, this is what Bruce Stronge has learnt about raising venture capital


Outfit founder and chief Bruce Stronge. Source: supplied.

Raising capital for your startup is hard.

It’s emotional, time-consuming, and can be expensive.

There’s lots of travel, meetings, and copious amounts of professional legal and accounting consulting work to be done.

We were fortunate enough to close our Series A round just before COVID-19 hit, but for those that weren’t, there are positive signs from Australia, the US and Europe about funding levels being maintained at pre-pandemic levels.

A snapshot

In Australia, investment into startups reached new levels in the first half of 2020 — nearly US$1 billion ($1.4 billion), up from around US$600 million in the first half of 2019, according to KPMG’s Venture Pulse report.

The report also shows that globally, VC investment in the second quarter of 2020 is going strong at US$63 billion, similar to Q1 2020 and Q2 in 2019.

This implies the pandemic, so far, has had little effect on investment levels, since VCs and PE firms still have plenty of dry powder in their funds.

A big plus with fundraising during COVID-19 is there’s less travel now, particularly with international investors. A pitch over Zoom is perfectly acceptable today.

Having been through several startup capital raises, in recent months I’ve found myself speaking with several founders looking to raise funds, and thought I’d share some of my lessons a little wider.

There were a few things I wish I had started earlier, or known before, so hopefully, it will save a few headaches and potentially significant equity for others.

How to maximise your chances of raising capital

1. Always be raising

If you start discussions with investors when you actually ‘need’ the money, you will not only be less attractive to invest in, but the closer you get to running out of cash, the less negotiating power you have, and you’ll likely give away more equity than you need to.

So, build good relationships with five to 10 investors over six to 12 months, so that you find out who you can work with, and you have a choice when you need it.

Don’t overstate your potential or projections. They will keep track of what you say, and will measure you against that when it comes to deciding to invest.

We got to know Five Elms Capital for 18 months before taking investment, and I knew I was taking on the right partners even before signing term sheets.

2. Keep a data room, always

This one is non-negotiable, and one I wish I’d started earlier.

We used to ingest data from Xero to Salesforce and generate real-time SaaS metrics that we were able to send to prospective investors with a click of a button.

Also, keep your financial records up to date and resurrect as much historical data as possible.

Keep a Google Drive folder for each month, with your P&L, balance sheet, cashflow, sales pipeline, etc.

If you have this ever-growing data room, you’ll save yourself weeks of pain down the line, when you’ll have far more important things to be doing.

3. Don’t ask for NDAs

In 2020, there aren’t many investors who will sign an NDA for the privilege of reading your pitch deck or seeing your numbers.

Of course, some firms may invest in your competitors, so be careful.

But as a general rule, I’d share too much rather than too little, if you’re to get and retain interest.

4. Use your key people

When discussions start heating up, make sure to introduce your key team members to your investors.

This demonstrates the maturity of the business and shares the magic, not just the numbers.

Investors will want to see a passionate, smart team who are crazy enthusiastic about what you’re solving.

Use your existing investor (if you have one) to help build out your data room (cohort analysis, etc) as they’ll know better than anyone how prospective investors will want to see your data.

5. Use the experience of other founders

I’ve had several mentors and advisors along the way.

With so many successful Australian founders out there, it’s crazy to make avoidable mistakes, such as choosing the wrong investor or signing bad terms, give away too much of your company, or waste months of work, when you can learn from others.

I’ve found every Australian founder I’ve reached out to to be incredibly helpful, from Sydney to Silicon Valley.

Great Australian programs

This year has even seen new models surface in Australia to help foster the new generation of seed and angel investors.

One example is AirTree’s open-source investing program Explorer, which allows people to source investments with and for Airtree, and learn the art of diligence and pricing an investment with professionals.

DLA Piper, one of the world’s largest law firms specialising in tech investment, this year launched its Open Office for founders looking at fundraising, where for free, with absolutely no strings attached, it provides founders with best practice capital raising advice.

The Queensland government still offers the very attractive Qld Business Development Fund (BDF) as a potential fund matcher for a seed fundraising round. The BDF is a silent investor, and VCs like the BDF because they get a call option over BDF shares after two years at an option price for the equity amount invested and a statutory interest rate (super low).

This means there can be a very attractive upside for the funds, as it can de-risk some of their investment but expose them to the tremendous upside.


Startups need persistence and grit, and the capital-raising process is no different.

Just when it feels like you’re not going to make it, things normally turn around and the business goes to new levels.

You’ll need all the energy you can get, but just keep having authentic conversations sharing your excitement to investors you are happy to spend the next seven years with.

NOW READ: “Who wouldn’t want to invest?”: How Brisbane startup Outfit bagged $20 million to grow its footprint in the US

NOW READ: This workout timer startup had a $25,000 Kickstarter goal… but raised $1.1 million instead


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