Introducing IfWeRaise - help make startup fundraising fairer

Helping underserved founders break the deadlock

My co-founder Hattie Willis and I are building IfWeRaise, a new community platform aimed at helping underserved founders fundraise through building relationships with experienced angel investors.

Here I wanted to unpack a problem that we’ve both seen in the UK’s early stage ecosystem and explain why we think our solution might help fix it. We’re very much working in the open, feedback and constructive criticism are gratefully received.

tl; dr

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Who gets to found startups matters

The startup ecosystem is full of dramatic launches and headlines about the latest fundraising rounds. But more importantly, it shapes our society - how we live, work and play.

It provides startup founders the opportunity to change our world with innovative new products and services. Startups have a huge impact on their customers, employees, suppliers and the communities they serve. And, of course, the potential to create life changing wealth for a founder, their family and their investors.

The successful startups of the last two decades now influence the daily lives of most people on the planet - Facebook, Apple, Google, Microsoft. And their founders are now the CEOs of corporations who wield power that exceeds that of the Presidents of many countries.

So if startups matter to everyone, then who gets to build startups matters to everyone. And beyond the impact on society, the opportunity for founders and investors to create personal wealth plays an important role in correcting (or exacerbating) historic socio-economic inequalities.

Money, money, money 💸 💸 💸

Many high growth startups require outside capital to be invested to get started. Early stage capital typically comes from angel investors or early stage venture capital funds. With a vested interest in the startup’s success these investors also often act as advisors to founders, providing free advice and support.

These early stage investors are typically either successful ex-founders themselves, wealthy individuals or professional investors investing money on behalf of their clients from a fund.

Without outside investment it’s impossible for many startups to get beyond the proof of concept stage. To scale they need money to pay for a team, marketing, overheads and a salary for the founders. A few founders will have the personal financial resources to effectively work for free at this stage but most will need an income to live on.

Some things money can’t buy

Some founders will already have experienced investors in their personal network. These investors will be family members, university friends, founders of startups they’ve worked for or friends in the financial services sector.

And the benefit of this network isn’t just potential investment. Their personal network will give them a wider professional network with introductions to a key first customer or employee, informal sales and marketing advice or backdoor access to speak at key industry events. 

Beyond capital and network is access to unwritten, informal knowledge. Knowledge of the hidden jargon, norms and practices of the startup ecosystem - what fair deal terms are, current market startup valuations or how to frame a business attractively to an investor. Impossible to figure out without an insider.

Capital, network, knowledge - your access to each of these makes a critical difference to your success.

Talent is equally distributed but opportunity is not

- Leslie Cornfeld

So if we believe that the opportunity to be a startup founder matters, then fair access to essential resources matter. We want the best founders with the best ideas to have access to resources, not just the founders who happen to be closest to those resources.

The easiest resource to track is the most tangible - investment of capital. And for argument’s sake let’s assume that access to network and knowledge correlates with investment as they mainly come via relationships with investors.

Capital invested in UK startups:

By gender

• 11% went to those with one or more female co-founders

• 1% to all female founding teams (who are 51% of UK population)

By ethnicity

• 0.24% of funding went to black founders (who are 3% of UK population)

• 1.58% of funding went to all ethnic founding teams (who are 14% of UK population)

By socio-economic background

• 42.72% went to founding teams with at least one member from an elite educational  background (who make up less than 1% of UK population)

Statistics from Extend.vc - Diversity beyond Gender

The current fundraising system leaves underserved founders stuck

If you can’t raise investment for your startup then you are stuck - stuck in two ways in fact. The first is obvious, you don’t have the capital to spend on product, marketing and team.

But you also don’t have access to the invaluable knowledge and network to develop your business. You need access to this support in order to make it more attractive to investors. It’s precisely the knowledge and network that these advisor investors have that will help you move forward and become more investment ready.

The Kaufmann Foundation’s research documents the benefit beyond just capital that angel investors provide, with a 20% increase in survival rates after four years.

You can help break the deadlock

The IfWeRaise mechanism is simple but powerful. Our community facilitates high value relationships between underserved founders and the angel investors who hold the knowledge, network and capital.

It relies on the support of angel investors who know that the current system is unfair and want to give high potential founders a fair chance.

Value proposition to angels

• An easy way to help be part of the solution, not the problem

• Network and learn from other angel investors

• Unique deal flow of startups who are backed by a powerful community

Value proposition to founders

• Get access to experienced advisors to help you move faster

• Record and share your progress, gain investor relations skills

• Broaden your network and gain support from other founders

IfWeRaise is a community with a simple process and a clear goal

The initial community is a cohort of around ten startups with five experienced angel investors helping them move forward.

The angel investors act as angel advisors. There is no obligation or expectation that they will invest - they are there to help the startup move forward as quickly as possible. But of course the goal is that the startup becomes an attractive investment proposition for the angel advisors or their wider network.

The IfWeRaise process emulates that of a well run startup advisory board. Structured updates on progress each month from the founder, with an efficient way for angel advisors to feedback and offer support. And the broader support from the other startups in the community.

Find out more or support us

😇 Angel investors - join to support high potential underserved founders

🚀 Underserved founders - how our community can support you

🔗 Partners - do you run an angel syndicate, fund or group? Get in touch

📧 Feedback - constructive criticism or offers of support Get in touch

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Original blog post on IfWeRaise.com