Raising VC dollars in a pandemic.

Part I: The Founder Story

Yes, the world is different now than it was a year ago—we're sure you're well aware of this 😶

Like almost everything, raising VC dollars has changed, we assumed, which is why we went to the experts to find out!

We talked to 4 prairie founders who recently raised money during the Pandemic to get their perspective on what's the same, what's different, and what advice they have for those raising for the first time during this pandemic (please be the last pandemic we ever have to face).

The Startups

Callia Flowers transforms the experience of sending flowers in Canada and sets out to create special moments in everyday lives.

Founder: Catherine Metrycki

The Raise: $1.1 million seed round led by Conexus Venture Capital Inc., with participation from Lex Capital Corp. and Broad Street Bulls. 

Rivercity Innovations builds world-class sensors for IoT solutions, including GPS, temperature, moisture, humidity, and other data. 

Founders: Jeff Shirley and Lance Pitka

The Raise: $700,000 seed round led by Conexus Venture Capital Inc. with participation from Golden Opportunities Fund and Tribune Capital. 

Immigrate is a software platform, that pairs those wishing to move to Canada with organizations who want to access to the global talent pool, and has a team of immigration consultants in the middle to make the process a breeze.

Founder: Dirk Propp

The Raise: $300,000 seed round from Tribune Capital. 

Vize is the analytics platform for collaboration tools and insights. It empowers organizations to succeed in the digital workplace by integrating with one or multiple collaboration data sources for a holistic view of the digital workplace.

Founders: Joel Pinel and Hailey Schwabe

The Raise: $250,000 seed round from Broad Street Bulls, Golden Opportunities Fund, Max Schmeiser, and 4 Saskatoon based-angel investors.

The Interview

Catherine Metrycki from Callia

Was this your first time raising money? 

This was our third raise. You may have seen our rather public round as aired with Manjit Minhas on Dragons’ Den.

How was the process different during the Pandemic? 

Zoom vs. in-person is a challenge. It's more challenging to assess fit and build rapport over a virtual connection. I personally think investor relationships are essential to a startup and I'm looking for more than just money in an investor. It can be difficult to assess fit over Zoom.

Did you alter your pitch because of COVID? 

We didn't have to alter our pitch much. E-commerce is an industry that blossomed during the Pandemic so there wasn't a significant change to how Callia operated. There were, of course, COVID-related questions about how the business was managing, and what happens during/post COVID to the model... if there are any risks, but these were more preemptively covering red flags than real concerns.

What advice would you give for someone who's never raised money? 

Haha, I'm still figuring it out! I think the most important thing you can do is authentically believe in what you're doing. VC's can tell when your heart isn't in it and, as a founder, if you don't believe in your startup, nobody will.

The second most important thing is to have the data to back it up! Numbers never lie (well, they do sometimes), but if you can show continued growth and milestones hit, it creates a ton of trust with investors.

Jeff Shirley from Rivercity Innovations

Was this your first time raising money?

This was our first raise. We had previously been bootstrapped. 

How does pitching in person verse pitching over Zoom change things?

Zoom eliminated travel requirements and made it easier to have effective and productive meetings with our investors. Instead of spending a day heading out to go pitch, you connect virtually and get right down to business. The downside is an emotional connection lost in a virtual pitch, and you are unsure if your audience is engaged or multitasking with their email or other matters in front of them. This leaves a bit of uncertainty with the outcomes after the pitch. I found that in-person you know right away how the pitch went well whereas remotely you're more unsure. 

Did you alter your pitch because of COVID?

No, the pitch format we used was essentially the same, except our business forecast and strategy were affected by COVID—for example, our budget had less travel expenses for 2021, less lease and overhead costs due to work from home and other related changes.

How did you maintain momentum during the pandemic?

Regardless of the pandemic, we continued with investment in product R&D, app development, and working with clients who were not impacted as much as others by COVID. There were periods where we used government assistance for COVID-related loss. This greatly assisted our efforts to not lose all our staff (though some downsizing occurred). The truth is we just kept plugging along and making progress in all business areas.

What advice would you give for someone who's never raised money?

You need to have a solid understanding of the types of raises and the vocabulary that goes with it. The due diligence package required was extensive and needed to be prepared to a level of quality suitable for the investors. Your knowledge of your business MUST be complete. This means knowing everything on the financial side through to your market, competitors, the ability to scale and what your strategy is with the investment—all grounded in factual data, not just a hypothesis. 

Finally, the raise is not the end goal… it is a giant step forward to more accountability and bigger milestones. Ultimately, the raise is the easy part, after that it's time to execute.  

Dirk Propp from Immigrate

Was this your first time raising money?

No, I had previously raised $50,000 from an early adopter, but I have self-funded the majority of the project so far.

If you’ve raised before how was the process different during the pandemic?

It’s hard to compare the two because we were at a different stage team-wise and product-wise. During this raise we had significant revenues, MoM growth and had just rebranded. For the first raise we were selling the story and potential of Immigrate. Now we’re selling the crazy growth of the company and have the numbers to back up the potential.

How does pitching in person verse pitching over Zoom change things?

It opens the door to be able to meet virtually rather than in person. It makes raising capital a global game and I’ve found VCs from other regions are now more receptive to hearing pitches than pre-pandemic.

Did you alter your pitch because of COVID?

Ironically, early in the pandemic investors thought Immigrate would die out, but it ended up having the opposite effect. The pandemic hit us hard initially but when we re-focus, adapted and started crushing our goals.

So, the pitch didn’t change much. We have the metrics and growth to back up the viability of the platform.

How did you maintain momentum during the Pandemic?

Honestly the beginning of the pandemic was extremely tough. The business wasn’t in a great place and I ended up needing to take a break for my mental health. That break saved Immigrate; I was able to come back fresh and mentally strong to pilot this rocketship.

We bounced back from 5 people at our low at the start of October and are now at 24 today, and we should have 5 more starting at the end of April. I’d say hiring great people is the key to keeping up momentum.

What advice would you give for someone who's never raised money?

It's a part time job to raise money so get money when you can and when you don't need it because, when you do, it’s really hard to get.

Joel Pinel from Vize

Was this your first time raising money?

It was our first time raising.

How does pitching in person verse pitching over Zoom change things?

We had only pitched a few times pre-pandemic, but I always felt that the nerves aren't as bad over Zoom. You miss a bit of the human connection but with how good Zoom is, I actually ended up preferring to pitch over Zoom.

Being based in Moose Jaw, pitching remotely saved a ton of time as I wasn't traveling between Saskatoon, Regina, and Moose Jaw.

Did you alter your pitch because of COVID?

We ended up altering a lot due to COVID. Team collaboration tools like Slack and Microsoft Teams obviously became essential to everyday work when everyone went home, so we pivoted not only our pitch but also our product to focus on how we can become an essential tool for those managing employees working from home.  

Investors started getting really excited about the product and the future of work, so we got to play into that and then—with big announcements from the likes of Facebook, Microsoft, Salesforce etc. that work from home would be a long-term strategic play for them—we had great talking points with investors.

How did you maintain momentum during the Pandemic?

The Pandemic ended up accelerating things for us with a product-focused on the WFH market.

In the early pandemic days, we had a ton of interest from companies, but they had to hold off due to how quickly they were changing their entire operating structure. Companies were just trying to get everyone set up on Slack and Zoom first before figuring out what would be next.

Once things stabilized a bit, those companies came back to us and were ready to begin conversations again. It was a bit of a waiting game, but with startups, there are always a million things to do. Right now, we're in a really strong position.

What advice would you give for someone who's never raised money?

A product isn't enough anymore. You have to have paying customers or strong customer interest. VCs are seeing so many pitches right now that, unless you've had an exit before, it's unlikely investors will invest in a team alone.

We had customers willing to do interviews about why they wanted our product and had early customers with a smaller tool we created. This gave investors enough confidence that we knew how to build something.