For Lucy Lloyd, co-founder of mentor-matching startup Mentorloop, the last few months of raising an oversubscribed $725,000 seed round has been a “whirlwind”.
“It’s one of those things where you have so many points where you’re thinking, ‘I’m not going to pull this off, it’s not going to happen’, and then you get to the end of it and then it’s all suddenly done,” Lloyd told StartupSmart.
With a pre-seed of $300,000 raised last year, the total funds raised by the Melbourne startup now exceed $1 million, and Lloyd managed to carve out a few days to celebrate the achievement with her co-founder Heidi Holmes last week, saying they “couldn’t be happier”.
The $725,000 raise was backed by Blackbird Ventures, Rampersand, and Tempus Partners along with some private investors. The startup’s seed round received more interest than the founders expected, leaving them feeling like “spoilt brats”, says Lloyd.
“$725,000 is a funny amount to raise. We initially wanted $500,000 to give us a certain amount of runway to get to month-on-month profitability, but the investors who were interested in getting on board were too high quality to say no,” she says.
Explained by Lloyd as a “dating site for mentor relationships”, Mentorloop launched in 2015 after the founders realised there was a gap in the market for such an offering. Today the company has 28 clients internationally, including Startup Victoria, RACV, and Monash University, and has seen a 500% revenue growth in 2017.
And Lloyd and Holmes haven’t shied away from the opportunity to get some extra mentoring themselves, with Lloyd saying the investors involved in their seed round have now become mentors to the founders, giving them advice and providing networks for them to seek advice.
“It’s been all mentoring all the time,” laughs Lloyd.
“Raising capital is funny. It’s an emotional rollercoaster of the highs of people saying yes, to the drudgery of all the legal stuff. Some of our investors who came on board we had an existing relationship with, but there’s something about the raising process which really cements your working relationships, which is only a good thing.”
The money will be funnelled into growing Mentorloop’s team, which currently consists of eight employees. Lloyd says finding great people for a new startup is “always the challenge”, but so far Mentorloop has met the challenge.
Neverthelss, the startup still wants to keep growing slowly.
“We’re trying to grow sensibly. We don’t want to suddenly be a 25-person team,” she says.
More overseas expansion is also on the cards, with clients in the UK, Asia, Canada, and the US meaning the startup will place further focus on those markets, plus others.
With the overall goal of wanting to put the power of workers to “be bold and seek mentors” in more and more hands, the outlook for Mentorloop over the coming years includes expanding the offering to cross-company mentoring, and eventually realising the dating-site dream of anyone being able to connect.
“We see clients really underestimate the demand for mentoring in their organisations, and in the same way we’ve kind of underestimated the demand for our platform,” Lloyd says.
“I could see a bit of inevitability in the mentoring movement, and I think that’s what our investors saw as we rolled into this round.”
For startups looking to kickstart themselves with a seed round, Lloyd says it’s essential to have a strategy. And she warns the experience is a volume game.
“You need to kiss a lot of frogs before you find the right match,” she says.
“And even when it’s a quick raise, it’ll still take longer than you think to do all the legal stuff.
“Get some good advice from fellow founders and other people who have actually been through the raising process.”