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Raise VC in Silicon Valley as a POC woman

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Like the world grows more and more digital, the desire for face-to-face connections is increasing. Squad, a community and application only by invitation, is trying to meet the need for offline connections by selecting closely linked events for Generation Z and Millennials.

"It mimics building relationships in real life," says founder and CEO Isa Watson.

It is an idea that investors are already supporting: Squad Close a $ 3.5 million seed round and plan to raise its Serie A in early 2020, but the road to secure that round was anything but easy. During a conversation about the How I Raised It podcast, Watson shared the ups and downs of his unique path to fundraising.

Establish credibility for a few years before fundraising.

She started putting some of the capital earlier in the business herself with the support of her family. He then worked on more than 200 meetings in Silicon Valley to increase his credibility as a founder, a step he cannot emphasize enough, before Squad even began his official seed round.

"Despite the fact that I went to MIT, despite the fact that I managed a billion-dollar product at JPMorgan Chase and even built a great digital product, it was still a Silicon Valley stranger," says Watson.

People sometimes have the perception that being a former student of one of the best universities in the USA. UU. Meaning they can go to Silicon Valley and just be "inside," Watson explains, but that's not how it works.

"It takes a lot of work and a lot of credibility," she says. "That's what I was doing for a few years before we made our official seed round. When I did it, it was as if my reputation preceded me and there was enough familiarity with me.

Isa Watson, founder and CEO of Squad

Do not do the work of dissemination in cold: only warm presentations

Despite taking more than 200 meetings in his efforts to break Silicon Valley, Watson never had a meeting.

"Cold reach is a tactic that I see that many founders use," he says, "while I will say that the most effective introduction comes from someone who knows someone."

Taking advantage of the connections it built was essential to connect Watson with its eventual funders. "Everyone is referring you to the next three people to talk," says Watson. "It becomes branches of trees and then a network that grows in a multiplicative way."

One of Squad's first investors was Steven Aldrich, who was currently working as a product manager at GoDaddy. . Both Aldrich and Watson grew up in North Carolina, and Steven's father shared his hometown's roots with her, which helped her establish the initial connection.

"It was about making connections consistently like that," she says. Steven introduced me to three people, and then those other three people introduced me to two people. And that's essentially how I rolled the ball. "

Not all meetings have to be about coffee or lunch meetings, since Watson also received many calls while expanding his network. But the important step was to make those connections, which was "very hard and heavy work," during the first two years.

It's very specific when you ask for advice

When he met with people in Silicon Valley or expanded his network of potential donors, Watson did not make fun of future funding rounds or send vague meeting requests.

When trying to develop your network, you first investigated a couple of key things: who did you need to know to build a really strong product and who did you need to know to have a solid distribution or growth marketing? Once you identify those people, you will contact them individually and ask them for specific advice in their area of ​​expertise.

People always say: When you want money, ask for advice. If you want advice, ask for money, "says Watson." Being sper explicit in the question and explaining how you spend your time and your brain space is very important. "Nobody has time for a generic request like" Hey, can I choose your brain? "

When you have connected with someone, you should always ask for recommendations for experts in specific areas, such as growth marketing, products, etc. If you volunteer, ask if you can send an email that they can forward to introduce you to those individuals.

After the presentations, it is important to remember that it is not just "one and ready", as she says. Once you have met someone through an introduction, follow up: let them know what the meetings were like and thank them again.

"It's like a very, very intense relationship management, and it's something that people with the highest EQ do better," says Watson. "It will identify my needs, ask specific questions … and then make sure to ask explicitly if they don't offer three other introductions for people who might be useful, who will be excited about what we are doing."

Secret weapon: your fundraiser to raise funds

When he realized that it was time to start raising money for Squad, his first move was to identify his "quarterback to raise funds," in this case, Charles Hudson of Precursor Ventures. According to Watson, it is useful not to have "too many cooks in the kitchen," or else you will end up with too many opinions that don't line up.

Hudson had already invested a small amount of money in Squad at that time, but he quickly became the person Watson went to for comments on his releases. I advised her on other aspects of executing a process.

"One thing that Charles tells me is that, with the fundraiser, it is likely that he will only succeed if that is his main focus at that time," says Watson. "It's not something you can do passively."

Then Hudson and Watson sat down and made a list of 35 venture capitalists. I introduced five that I did not expect to fit well. First they went with those who didn't expect them to be a perfect combination so she could get comments and see if Squad was really ready to raise capital.

Of those first five meetings, one or two "were complete blows" and rejected Squad altogether, but Watson arrived at the partner meetings at the other three meetings, a sign that the VCs were seriously considering Squad.

Based on that feedback, Hudson introduced Watson 10 VC more, and shortly thereafter I met Michael Dearing at Harrison Metal, who led the Squad seed round.

Choose seed funders carefully

After Dearing offered a $ 3 million terms sheet, Watson quickly received offers from other VCs.

"It's fun because it deliberately took me to be in the market to raise funds for two and a half months to get that" s "from Michael. Before that, I had no money really committed, she says. And then, after only a few days of inform people who had a $ 3 million term sheet, had $ 6 million on a table. VCs are such followers. "

With so many offers on the table following Dearing's leadership, Watson was in the enviable position of needing to choose who he had let into the seed round. So how did she choose?

"The first thing is added value," says Watson. She asked herself: I felt I had the right variety of value? Maybe I want someone there who has very little product; Maybe you want someone who is really strong in growth, strong in marketing. "

His second criterion for making the decision was a less focused approach to the curriculum. Simply put, she went with her instinct.

One thing that the founders really underestimate really is: is this person a good human being? I went with the people I had felt most comfortable with, the people I felt I could trust based on my interactions with them, and who supported me along the way.

Raise VC in Silicon Valley as a POC woman
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