The first time I heard Jason Calacanis share his hopes for This Week in Startups to reflect an MBA I was deeply inspired to follow his footsteps.
While I certainly have a long way to go, I’m fortunate to our founders for taking the reins and sharing their stories in an instructional and honest fashion.
HoneyBook is a platform for event planners to communicate, hire, and work with vendors like photographers and caterers. To put it simply, HoneyBook acts as an extension of the vendor and even connects vendors to other professionals who are eager to collaborate.
In the words of Oz, they’re taking the events industry out of the 80s.
We are going to create magic from every part of this process, from the booking to the planning through the event itself…The end goal is that you’re going to ask someone if they’re on Honeybook and that’s actually going to mean something to you. It’s going to be a stamp of approval.
Oz introduced today’s MBA lesson on fundraising simply and honestly.
I was amazed. First of all, I thought he was mad.
I think Shadiah describes it best: Raising capital and working with investors is similar to getting married.
Whether you’re chatting on the phone, grabbing drinks or working through challenging problems, it’s vital that you have chemistry with the individuals you work with.
Here are the key points Oz shared in our conversation.
- The adage you’ve heard a million times about cultivating relationships and not making transactions is 100% true. Never approach an investor boasting about how much money your startup is going to make them. In the marriage example, this is bringing up the prenup on the first date. Meet and interact with potential investors as a friend first, founder second.
- Target individuals who really believe in your vision. Instead of focusing on the capital they can provide, determine how deeply they’d like to get involved in your company. For HoneyBook, Oz meets with Boris Putanec from Hillsven Capital every two weeks and texts Michael Eisenberg of Aleph daily. These are the type of relationships you want to build.
- Another reason not to pitch financial gains: Angel investors have plenty of money. They don’t need your startup to survive. Back to the marriage metaphor, always marry for love never money.
- Valuations are fictional for both parties. Founders and investors need to be incredibly clear about how they can contribute to the relationship. Think of these conversations as deciding how many kids you’re going to have or where you’re going to live. You don’t want a year to pass and to find out that your spouse wants to live in Alaska. Ask the necessary questions now.
- Be specific about your company’s needs and recognize that they will change as you raise additional rounds. If you need help with press, hiring, and networking and an investor can only help with press, open up the round to others who fill in the gaps. In the words of Oz, this is how smart entrepreneurs and smart investors work. For example, HoneyBook specifically targeted Jeff Crowe at Norwest Venture Partners when the team knew they were going to invest in transactions and financing for the events industry. Today, Jeff sits on the board, spends time with the leadership team, and visits the office often.
The HoneyBook teams expanded from four to 40 in less than 12 months and expect to be a team of 120 this time next year.