This is a guest post by Getaround cofounder Jessica Scorpio
When my co-founders and I founded Getaround at Singularity University back in 2009, we believed we were on to something big. People we knew experienced that clear “a-ha moment” when we explained how sharing cars with people nearby could help fight the problem of car overpopulation.
What concerned us, however, was that we kept hearing reasons why it wouldn’t work. People were concerned with the risks — insurance, fears around sharing a car with a stranger — they asked, how would we ever convince investors to share the risk with us?
We spent the next year working to build our technology. During that time we also addressed the primary risks by passing car sharing legislation in the State of California, and securing a primary insurance policy through Berkshire- Hathaway. With all the pieces in place, it was time to seek funding.
By August 2012, we had a raised a $3.4 million seed round, and announced a $13.9 million first round led by Menlo Ventures and other amazing investors like Marissa Mayer, Ashton Kutcher and Innovation Endeavors.
We have been fortunate to have raised great rounds, from amazing investors — but fundraising was one of the most stressful events of my life. Despite having seasoned entrepreneurs on our team, none of us had ever raised funds before.
I recently spoke about early stage funding at Startup Grind in Mountain View. Here are the funding tips I shared with the audience:
Pick your launch pad
Today, there are countless platforms to launch your business. Before you choose a conference, hackathon or accelerator program, consider this time and space as a launch pad for your business and an important step in your funding endeavors.
Given the connection, many of our first investors were also from Singularity. That initial investment allowed us to found the company and turn our big idea into something real. From there, we spent the next bootstrapping with angel funds, solving major problems that stood in our way, and building our product to get ready for our official launch.
Raise on a high point
After our year of bootstrapping, we made our big debut on stage at TechCrunch Disrupt in 2011. At that time, we had already closed over 80 percent of our seed round and our Tech Crunch win definitely helped secure a few key investors to close out the round.
Raising funds on a high note, like a product launch or major award or recognition, can help you capitalize on your momentum in a real way and helps to create a sense of urgency among potential investors, which is never a bad thing.
Choose the best cheerleaders
Late in 2011, we started raising our first round. We already knew who we wanted to meet with with, and headed straight into coffee meetings and official pitches. And we did that all day, everyday, for three months. Those months of hard work ended with our team, sitting around a table, surrounded by term sheets — and totally stressed.
Choosing your investors is like choosing a life partner — it’s a huge commitment and it’s fine to be very picky. In the end, we chose investors who were passionate about the same goals we are. We also looked for investors who could bring experience, patience, and are supportive of the founders.
At the end of the day, raising funds is a stressful, but necessary part of being an entrepreneur. You and your co-founders are going kill yourself trying to make it happen, you’re not going to sleep, and you’re definitely not going to get any other work done.
Plant your seeds properly, strike while the iron’s hot, surround yourself by great people, and you’ll get it done.
Jessica Scorpio is a founder and Director of Marketing at Getaround, a peer-to-peer carsharing company.
Scorpio previously founded IDEAL, a not-for-profit network for entrepreneurs and young leaders.
photo credit: Jonno Witts via photopin cc