When Mathilde Collin, a 28-year old entrepreneur, was ready to start raising venture capital for her company Front’s Series B round, she set a ground rule.
Collin told investors she was available for conversations around funding for one week only. Having a short window creates a little competition among the venture capitalists, who might offer more attractive deals if the company is hot and time is wasting. For Collin, setting a deadline was simply about speeding up the process.
“I don’t necessarily like raising funding,” Collin told Business Insider.
She might not like it, but she’s arguably very good at it. In January, shared inbox platform Front raised $66 million in a Series B round led by Sequoia Capital. During her five-day fundraising binge, Collin snagged 10 term sheets, or investment offers, from 11 of the investors she pitched — an impressive achievement for a first-time founder.
Front has raised a total $79 million to change the way teams get work done. The startup makes a shared inbox app that lets teams handle messages from email, texts, Slack, and social media, all in one place. More than 3,000 businesses around the world use Front for more effective communication.
Here’s how she did it
Raising venture for a startup is no cakewalk. There are high stakes, probing questions from investors, and pressure from employees to return to the office with a term sheet.
Colin said that before an entrepreneur takes the plunge, she recommends they think critically about whether or not they’re ready to raise funding. Front wasn’t strapped for cash. The company managed to burn only $3 million from a $10 million Series A round in 2016, and Front is already making money as a paid service for enterprises.
Still, Collin said she wanted to grow Front more quickly and hire a significant number of engineers. She decided she was ready to raise when Front ended three consecutive quarters during which revenue, app usage, and employee headcount all increased and sustained their growth. Though Collin admits part of the decision came down to a feeling.
She worked with employees on the data and business operations team to put together a pitch deck — a presentation that entrepreneurs give to investors when seeking a round of funding. In about 24 slides, the pitch deck told the complete story of Front. It addressed the pain points that Front aims to solve for, the achievements of the company so far, and the long-term vision around how Front wants to reinvent email.
The pitch deck was also chock-full of data and insights, such as annual recurring revenue, the number of employees who have left Front so far (zero), and its marketing spend.
According to Collin, of all the investors she pitched, they seemed to be most impressed with three key metrics: efficiency, consistency, and net retention rate.
- Front is building a successful business without blowing through all its cash. Collin’s pitch deck demonstrated a track record of capital efficiency by sharing how much money the company had raised to date (about $13 million between seed financing and Series A), how much cash it had left ($7 million before the Series B), and how long it could survive with 0% growth, also known as runway (18 months).
- The company is growing and is sustaining that growth. Front is seeing explosive growth across revenue, app usage (messages sent and comments written), and the number of large teams using the app. Collin pointed out that there were no major dips across these metrics from one quarter to the next.
- People like using Front. The pitch deck showed that while revenue is increasing, churn keeps trending down. That means the rate at which existing customers cancel their Front subscriptions is falling. They also use the app more over time.
With these facts and figures in mind, Collin wowed a number of Silicon Valley investors. Participating in the company’s Series B round was actually so competitive, partners of Sequoia Capital built a custom LEGO set to convince Collin, a known LEGO enthusiast, to accept their offer. The top-tier venture firm wound up leading the $66 million round.
Collin said, ultimately, she was successful in fundraising because Front is a good idea.
“Investors are driven by the fear of missing out. And if Front is successful, then Front will be very successful, because everyone uses email,” Collin said. “Everyone needs a tool like this.”
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