Startups & Covid-19

In this blog series we are speaking to founders of startups to find out how coronavirus has effected their business, how they have adapted, and any tips they have to help others cope with these challenges. If you are struggling to adapt or looking for some advice, make sure to have a read of our interviews.

Our first interview is with Edward Upton, Founder and CEO of Littledata, which is an ecommerce analytics app and Google Analytics consultants for Shopify and Shopify Plus.

How has coronavirus impacted your business?

Luckily for us the impact has been mainly positive. We work as a globally dispersed team in normal times, so operations have not been disrupted. We saw a slight uptick in churn as smaller clients reacted quickly to slash costs, but our sales cycle for larger clients has been accelerated: people working from home have more time to take sales calls!

Have you had to pivot your business and if so how?

The core need – helping ecommerce companies get a complete view of the customer lifecycle – is more pressing than ever, as every retailer switches their focus to online sales. So there’s no need to pivot, but we have scaled back hiring plans as we push for breakeven later this year.

Have you been engaged in a fundraise during this time?

Yes – our fundraising strategy had been to raise little and often as our recurring revenue and valuation increased, and with hindsight that was always at risk to a big change in investor sentiment. We closed the latest round this week.

How has this been impacted and are you adjusting your plans?

Unfortunately we saw a number of new investors pull out of the process in March. The reasons given were a combination of wanting to keep cash for funding calls from their portfolio, a reluctance to sell their public equities at a big discount to fund our company and a general uncertainty about startup survival in the downturn. We’re very grateful for a few of our current angels who actually offered to double down and invest more than initially planned.

So we’ve closed a smaller amount than we’d planned, but we can adjust our burn rate to compensate for that – and carry on fundraising later in 2020.

What message would you have for investors?

Now’s the time to back startups! Huge global disruption will lead to acceleration of long-term trends such as the shift to online sales and marketing, and the automation of knowledge-intensive processes. Startups with a quick route to profitability and a robust business model will grow faster than before.

How are you coping with lockdown? What is your strategy?

Most of the team work from home normally, so there hasn’t been major disruption. We’ve been turning the video on more often for internal calls – it’s just nice to see another human sometimes –  and been buoyed by some funny memes on our #random Slack channel. I’ve also encouraged the team to get outside and take exercise where they can. Sitting in front of a laptop all day is not good for anyone, and we all need to stay fit and healthy in mind and body.

Is there anything your business is doing to help in your community or with the wider crisis?

We’ve been involved in a cross-agency initiative https://offline2on.com/ to help retailers that need to switch to online trading fast to survive. I truly believe local small businesses are the foundation of our liberal democracy, and they all need a way to keep trading and keep afloat during the lockdown. We’ve been giving free advice on tactics for trading in the crisis, and extended free trials of Littledata’s software to assist with measuring their website performance.

What do you think about the measures that have been introduced by the Chancellor?

The job protection scheme to pay for furloughed staff, and parity for the self-employed with small businesses, is the most helpful measure. I do worry about the bureaucracy of claiming back the money from HMRC – and whether launching a new IT system for HMRC to make the payments is possible within a month – but it is a bold and inclusive initiative.

Unfortunately the offer for government backed loans to SMEs is less useful. This is channeled through high street bank lenders, who still apply deeply risk-averse lending criteria – and are asking for personal guarantees from directors, even when the government is underwriting 80% of the risk. Last time I tried to tap bank funding the loan assessor didn’t even understand the economics of a SaaS business, so I won’t be wasting time on applying for now.

What else do you think the Government should do?

I am a libertarian, and I believe people’s liberty to move, socialise and shop should only be restricted in extreme circumstances. I see the UK government had no choice but to restrict movement but before this lockdown is extended again I’d like to see an open debate on weighing the massive costs to national health and wealth of restricting everyone against the assistance to the small percent of people getting hospitalised from this virus.

What advice would you give to other startups at this time?

Persevere and adapt where necessary. Startups thrive on disruption, and economic shocks like this bring huge disruption which smaller, nimble companies can exploit. Funding will be difficult in the short term, so get creative on ways to fund your growth: prepayments from customers, loans from friends and family or cutting costs.

For software companies, the main problems in many sectors have been the war for talent (and huge salary inflation for developers) and rising customer acquisition costs. Hiring and marketing should get a lot easier as big companies scale back, as long as you’re still around to take advantage.

For more tips on dealing with the impacts of coronavirus, visit our Startup Survival Guide.

#SixtySecondStartup

This week’s #SixtySecondStartup is with Giuliano, the Co-founder of Get Groomed. He started Get Groomed with his Co-founder Sabrina after moving to London and realising how inconvenient it was to get an appointment at a barber shop. Spotting a gap in the market, he started Get Groomed which allows people to book a barber to their home or office. Since starting 2 years ago, Get Groomed has now rolled out across London.

Giuliano and Sabrina, Co-founders of Get Groomed

Our interview with Giuliano:

What does your company do?

We connect mobile barbers with customer. Customers can book barbers to come to their home, office, a hotel or where ever they may be. We also provide male beauty services for weddings and events. 

Why did you set up this company?

When I arrived in London, I tried out different barber shops and salons and noticed some issues with them. Most shops are only open between 10am-5pm, making it difficult for customers to find the time to go. If they go at the weekend, there is often a long waiting time. I also found it difficult to know if a barber would be any good and able to do the hairstyle I was after. My Co-founder Sabrina mentioned that there are apps for women to book hair appointments, however we realised that there was a gap in the market for men. We built a prototype, hired a few barbers and found customers very quickly.

We knew we were on to something when:

A few months after we started, we got approached by a famous Fintech startup to provide male beauty services at one of their events. This was despite us having no marketing budget, and not sending a single email or doing any cold calls. It showed us that there was demand at a corporate level.

Our business model:

Our business model is commission-based. It helps us to keep working hard to connect barbers with customers: the more money they make, the more money we make.

The biggest mistake I’ve made is:

Establishing a strategy to increase revenue at all costs. It might be attractive for people who can burn a lot of money each month, but it is not sustainable over the long term. We believe in lean ways to improve the business: we are now profitable every month and we are growing every month.

We think there’s growth in this sector because:

One word: convenience. We have a lot of customers contacting us because they can’t find the time to go to a salon or it’s inconvenient for them to go as they have caring duties or are ill. In the same way that there was a boom in food delivery services in the last decade, customers are looking for on-demand, high quality male beauty and grooming services from the comfort of their own home.

We worked with AIN because:

We have been running our platform for 2 years and we are operating across London. So we are confident that this is the right time to scale-up and expand to more cities in the UK. We are looking to partner with forward-thinking investors who share our vision and AIN is one of the best tools to connect with those kind of partners.

Get started today and view pitches from entrepreneurs around the world.

#SixtySecondStartup

In this week’s #SixtySecondStartup, we spoke to Will Ross who is the Founder of Tendo, a skills passport for frontline workers. Will started Tendo to make frontline work more secure for employees and to make it easier for companies to hire, retain and train their workforce.

Our interview with Will:

What does your company do?

Tendo allows frontline workers to generate workplace credentials while they do their jobs, building a verified, portable history of skills and hours at the end of each week.

Why did you set up this company?

We started Tendo to make frontline work more certain. For the worker, this means improving their long-term economic security. For the business, certainty comes through having a loyal, dependable workforce and an ability to encourage employees to learn new skills.

What is your business model?

We bill businesses on a per user basis. This monthly charge is a way to offset the cost of workforce churn.

We think that there’s growth in this sector because: 

Frontline workers remain offline. By bringing them online, visibility of supply provides a major step forwards. We also consider this workforce to contain a massive amount of untapped operational and creative potential – we aim to empower.

How did you get your first customer?

By building a feature that removed an administrative overhead for a training provider.

We knew we were onto something when:

When employees indicated that they would be motivated by having a trusted way to generate and retain a record of their work reputation.

Our most effective marketing channel has been: 

Going to events where we can speak directly with decision makers.

The biggest mistake that I’ve made is: 

Spending time marketing to cities where Tendo can’t have a repeatable physical presence.

What we look for when recruiting: 

A willingness to experiment and an inclination to speak more in terms of immediate actions than long-term plans.

We worked with AIN because:

Angel Investment Network provide a clear way to signal company type to a list of investors, ensuring that angels can search for early stage companies where they can significantly influence growth.

Get started today and view pitches from a huge range of entrepreneurs around the world.

Behind the Raise

Welcome to the first of our Behind the Raise blog series! We know how difficult fundraising can be, so these interviews offer some tips, advice and insight into what has worked for different entrepreneurs.

For our inaugural interview, we are delighted to be speaking to Andrea Armanni, Co-founder of Mammalo. Mammalo is transforming the service industry by making it easy and quick for people to book the services they need. Through Mammalo, people are paired up with local professionals, making it hassle free to get the boiler repaired, hire a photographer or source a makeup artist.

Tell us about Mammalo:

Mammalo is a marketplace for on-demand local services delivered at home, where people can find and book anything they need from a painter to a hairdresser. With over 3 million people moving to cities every week, finding trustworthy experts in large urban areas has become much harder and very time consuming. Mammalo’s mission is to connect those in need with the right people that can help, and is set to become the go-to website where people can find any service they need, delivered to their door.

Why did you decide to raise investment?

Without funding the vast majority of startups will die. A startup usually means a company that is built to grow fast, and fast growing startups usually need to burn cash to sustain their growth prior to reaching profitability. In our case, we raised a friends and family round in the beginning of 2018 which allowed us to launch our first MVP in November 2018 and work towards finding the right product market fit. In less than 3 months, we managed to gain over 1500 users. We needed more liquidity to invest in marketing and tech development, so we decided to start working towards our first seed round.

What is your top tip for anyone raising investment for the first time?

It may sound obvious now, but one thing that we learnt whilst raising our first seed round is to be “Investment ready”. For some founders it’s enough to have a story and a reputation to raise funds, but for most it requires much more. Angels invest when they believe in the idea they hear, in the founders’ ability to realise its vision and in the market opportunity. When, as a founder, you are ready to tell this story, and bring some proof of customer adoption, you are ready to raise money.

What attracted investors to your company?

I believe what really helped us was getting the right launch strategy in place and the first 400 users within our first month. Then, a solid data vault with a detailed business plan, financial forecast and investment deck.

Andrea, Co-founder of Mammalo

My biggest fundraising mistake was…

Our biggest fundraising mistake was undoubtedly underestimating the amount of time and effort that was going to go into the fundraise process. Since we started working on it, we spent nearly 6 months on the fundraise trail before completing all the legals and receiving the investment.

Why did you choose to use Angel Investment Network?

We came across Angel Investment Network through a friend of ours at Y Combinator SUS as we were about to launch our crowdfunding campaign. As for every business looking to raise their first seed round, finding the right angel investors can be challenging and time consuming. Angel Investment Network was a great opportunity to gain exposure from the largest angel investment community in the world. Our pitch was posted to over 200,000 investors and remained live over a 2 month period in which we had a chance to talk to multiple investors and present them our vision and future objectives.

To find more fundraising tips, visit our learn section.

#SixtySecondStartup

Our latest #sixtysecondstartup interview is with Greg Geny, Co-founder and CEO of BeRightBack (BRB). Fed up of spending so much time planning weekend breaks, he decided to create the world’s first travel subscription service to make booking short trips easy. Through BRB, customers get 3 trips every year to surprise European destinations, making travel fun and stress free.

Our interview with Greg:

What does your company do?

BRB is the world’s first travel subscription service. We offer customers 3 trips per year to surprise European destinations for a fixed monthly fee.

Why did you set up this company?

BRB came from very personal pain points. I did a lot of travelling in my 20s and early 30s and a few years back I realised that I was spending more and more time researching and booking my weekend breaks. The root cause of this comes from the fact that the onus is still on the customer to do all the heavy lifting and as the market has become more and more fragmented, this research process is now taking on average 10 hours and is spread across 4-8 weeks. So not only do customers need to spend hours researching their next break, but by the time they are ready to book, flight and hotel prices have gone up. This did not feel like a very customer-centric approach to travel. 

What is your business model?

We are a subscription based model delivering 3 trips per year to surprise European destinations, for a fixed monthly fee. We leverage data to tailor the breaks to the exact preferences of our customers. Customers can also purchase additional services.

How did you get your first customer?

We ran Facebook and Instagram ads and got 3 customers on our first day. Whilst social media advertising remains a strong channel for us, we are now building our brand across a range of channels – from social, SEM and content creators to large partnerships. The latter will allow us to leverage synergies between BRB and established audiences in other verticals such as financial services, telcos, travel or media. 

We think that there’s growth in this sector because: 

The market has grown 29% since 2012 and is set to grow further over the next 5 years. At the same time, Millennials and Gen Z have very different expectations from previous generations. They love travelling (particularly city breaks), they value convenience and they want a personalised service. BRB meets the needs of this new generation by turning travel into a lifestyle. 

We knew we were onto something when:

We got picked up by major media publications – the Telegraph, the Guardian, Lonely Planet, SKIFT, CNBC and more and started seeing the traction behind the business. We’re grown 350% this year alone. 

The biggest mistake that I’ve made is: 

Not starting the business sooner, although I believe that timing is everything and now is the perfect time for BRB to disrupt the industry.

We worked with AIN because:

We wanted to tap into an existing network of investors to support our fundraising efforts.

Get started today and view pitches from a huge range of entrepreneurs around the world.

#SixtySecondStartup

This month our sixty second interview is with Firdaus Mogul, Founder of Check An Invoice. Check An Invoice uses AI and machine learning to identify invoice fraud. Firdaus set up this business after one of his friends was a victim of invoice fraud and he realised that there were no products addressing this problem.

Our interview with Firdaus:

What does your company do?

We identify and prevent invoice fraud using the latest advances in artificial intelligence and machine learning.

Why did you set up this company?

When I ran my own B2B payment business, which I sold in June 2019, many of our customers spoke about instances of invoice fraud. On researching, we could not find any companies that offered solutions to this problem. So we decided to launch our own SaaS application that addresses the needs of both small and large businesses.

We knew we were onto something when:

Every prospect we met and investor we spoke to started complementing our market positioning and how the product is addressing an unsolved need.

How did you get your first customer?

Like all startups, our first customer was an acquaintance, who found the solution very helpful for his business as it reduced the manual workload of checking the invoices

Our most effective marketing channel has been:

Forming partnerships with accountancy firms, FinTechs and banks. These partners then offer our solution to small and large companies as a value added service on top of what they already offer.

The biggest mistake that I’ve made is: 

Assuming that there was already a good understanding of invoice fraud among SMEs. Although our research suggested that over 50% of SMEs are affected invoice fraud, when we went out and spoke to people, we discovered that awareness levels were relatively low.

We think that there’s growth in this sector because: 

Invoice fraud results in over $26bn of losses worldwide (Source FBI) yet, there are very few solutions which address this issue. Our platform operates globally giving us the ideal first mover advantage.

We worked with AIN because:

We worked with AIN because they have the largest and most engaged network of angels.

Get started today and view pitches from a huge range of entrepreneurs around the world.

#SixtySecondStartup

Welcome to the first in the series of our #SixtySecondStartup blog. Each month we will be profiling a different founder with some quick fire questions.

This week we are talking to Julian Hall, Founder of Ultra Education C.I.C. Ultra Education teaches young people aged 7-18 entrepreneurial skills to help them grow or start a business. Through their app they ensure that all young people, regardless of their background, have access to the tools needed to develop their entrepreneurial skills.

Our interview with Julian:

What does your company do?

We teach entrepreneurship to kids aged from 7-18 years old. We have developed an A.I. powered chatbot that can deliver entrepreneurial education to kids at scale through a native mobile app.

Why did you set up this company?

We believe that entrepreneurship is a great vehicle to help increase the life chances of children and young people. It helps them to develop life and work skills.

We knew we were onto something when:

A parent told us that their child never concentrates in school but we had captured their imagination in less that 20 mins. 

How did you get your first customer?

Word of mouth! I told the story about how my own daughter picked up entrepreneurial skills by watching me working at home. After we realised these skills could be taught and started sharing that idea, we got immediate demand from both parents and schools.

Our business model:

Is a subscription based mobile app powered by A.I. and supported by human mentors in the chat. 

Our most effective marketing channel has been:

Word of mouth through social media. We promote the successes of our ‘kidpreneurs’ and which other people also share on their social media channels.

The biggest mistake that I’ve made is: 

Not growing our team early enough and not capturing the impact of our work.

We think that there’s growth in this sector because: 

More and more kids want to work for themselves and have ambitions that schools are unable to currently support on their own. Entrepreneurship is becoming common place, but kids and young people still don’t have access to on demand support. 

We worked with AIN because:

We believe that angels are not just thinking about a monetary return but also a social return.

Get started today and view pitches from a huge range of entrepreneurs around the world.

A worldview on startup stats

Angel Investment Network connects startups and investors from all over the world. But what does the current global startup climate look like? We have drawn together some statistics to give a brief global overview. 

In terms of numbers, the USA has by far the most number of startups at 46,606.  The UK comes in third place, with 4,901, just a couple of thousand behind India.

However, despite the USA having the highest number of startups, it is Uganda which has the greatest number of entrepreneurs per adult population at 28.1%. Interestingly, 5 out of the 15 countries with the highest proportion of entrepreneurs are in Africa, and Southeast Asia and South America are represented by 4 countries each.

Moving on to unicorns, meaning private companies with a value of over $1 billion, China is in the lead with 149 unicorns, compared to 146 in the USA. These two countries are vastly ahead of any other, with the UK and India coming in a distant third with 13 unicorns each.

Whilst these statistics only scratch the surface of the global startup landscape, they show that it certainly is an exciting world out there! 
All statistics and infographics are from the article Startup Failure Rate and 80+ Other Startling Statistics About Startups.

Angel Investment Network has networks around the world. Wherever you are based, if you are looking for investment find your country’s network, register and then upload your pitch.