From $0 to Your First Startup Funding

Melissa Kargiannakis has been a member of Founders Network since February 2018. She’s also been a prominent FN member in our Toronto chapter. To receive peer mentorship from Melissa and over 600 fellow Tech Founders, please request an invite and join our global network. 

Power, Privilege, & Luck

Before I regale the tales of driving through snowstorms, traveling 4,000km in 4 weeks, or investors giving me $100,000 in our first meeting, I want to address power, privilege, and luck.

Power and privilege impact where you start in the fundraising process. But they do not dictate your ability to do it. Think of fundraising like Charlie & the Chocolate Factory, Gene Wilder style. Some people like Veruca Salt, are all but guaranteed a golden ticket. While luck is always involved to some extent, wealth-infused probability ensures the odds tilt in their favor.

This is part of why for many years I didn’t think that startups were for people like me. I thought that startups were only for people from wealthy families who did not have to worry about rent, food, or student debt. Which is entirely untrue, because here I am, even if my path has been a little bumpier.

Coupled with a lot of hard work, add luck into the fundraising process: the wild card that brings people like Charlie Bucket into the same room as Veruca Salt. Luck has no reason, it isn’t fair, and there’s nothing you can do to get it. Oprah said it best, “You get ready for the opportunity to step in. Because that is what luck really is, preparation—meeting the moment of opportunity.”

Part of working as hard as you can to leverage luck can be summed up in three strategies that underpinned my ability to bring in over a $1,000,000 CAD from private capital in just over a year since receiving my first cheque.

Never Give Up

Every NO is one step closer to YES

If you aren’t born with connections, you can make them

Raising your first capital

If you want to raise money to bring your startup idea to life, the first thing you need to buckle up for is knowing that going from $0 to your first cheque won’t take weeks or months, it will take years. Emily Best wrote the best explanation of reality as a founder in the pre-seed days: “How raising a $2+M Seed Round really, actually went”. It is a must-read.

I have been chipping away at my company’s core idea for five years. Two of those years were spent just trying to get the confidence to actually believe I could do it; that I could be a solo, non-technical, female founder and run an artificial intelligence (AI) start-up on the frontier of the future of information.

I finally had the courage to legally incorporate three years ago. From legal incorporation, it still took over a year and a half to see my first investor cheque hit the bank, an investor I met nine months prior. I am grateful he took a chance on me and I know that he saw my tenacity and drive to do whatever it takes. The biggest misnomer about startups is that everyone thinks they’re a sprint, when in reality they are a marathon. 

“The biggest misnomer about startups is that everyone thinks they’re a sprint, when in reality they are a marathon” @melkargi, Founder of @Skritswap

Never Give Up

Imagine driving to meet an investor for the first time. The drive is 800km per direction. Not terrible, except it’s December; in Canada. And of course, there’s a snowstorm. I could hardly see more than three cars ahead of me. Along the way I passed four cars in the ditch and two of those were upside down. This is a little unnerving when you’re racing to be at a life-altering meeting at 2:00pm.

I also traveled 4,000km up and down from Northern to Southern Ontario in 4 consecutive weeks for 4 pitch competitions with $20,000 cash prizes before I had any investment, only to lose every single one. I cried alone after the final loss. Exhausted and heartbroken, I felt completely crushed. Regardless, onward I went. I had promised myself when I finally legally incorporated, that no matter what, I would give it a solid decade of effort.

That is part of the perseverance investors want to see. They want to see that you will move heaven and earth to make your vision a reality. They want to see that you will be the last person standing after the universe has thrown everything in your way.

Jen Sincero’s You Are a Badass talks about how when you first start out on your journey to achieve the impossible, things will get much more difficult. You may think the universe is telling you to stop or that maybe it’s a sign that you shouldn’t be following your dreams. That’s simply not true. You just need to get through that first transition phase once you commit to doing it and never give up.

“That is part of the perseverance investors want to see. They want to see that you will move heaven and earth to make your vision a reality.” @melkargi, Founder of @Skritswap

Every NO is one step closer to YES

A really important reframe is to think of every No as getting one step closer to a Yes. In this mindset, every No becomes a success because each one increases the probability of finally hearing a Yes. I’m sure you’ve read all about reframing failure, and I can assure you it is everything.

In the face of countless No’s, you have to have a nearly delusional level of faith in yourself. You have to believe that everyone who said no is simply wrong and are missing out on what you have to offer. Believing this will get you through the early days.

You also have to celebrate every single win. Even if that is something as small as writing out a portion of your strategy or sending an email to someone relevant, every inch forward matters. I had an executive coach who had me write just one thing on a little piece of colored paper and put it in a jar on my desk as a visual reminder of progress; every step forward.

Eventually, luck came to meet all of my hard work and I walked out of an investor meeting with people I just met for the first time that day with $100,000. That’s when I got my first yes. 

“In the face of countless No’s, you have to have a nearly delusional level of faith in yourself.” @melkargi, Founder of @Skritswap

If you aren’t born with connections, you can make them

If you aren’t born with connections, make them. Repeatedly find and engage with the right people until they become valuable connections. Twitter works wonders for building a community like this.

Have the courage or shamelessness to ask for what you need. It is paramount to have key helpful people as mentors and advisors. You would be astounded at how many influential people want to help emerging leaders. It is a way to pay it forward for those who helped them at the beginning of their careers. The worst they can do is decline to help, which is great because then you’re closer to your next Yes. 

Be persistent with influential people and always offer reciprocity. No matter how early you are in your career you can always offer to help. Being at a different stage, you can often make introductions to different people who would never be on these executives’ radars. People also need 360-degree references for promotions or reference letters for awards. This is another area where you can offer value no matter how much more power you may perceive the other person to have. Reciprocity shows that you care and you do not take your contact’s support for granted. Even if you cannot provide value right away, at least offering makes a massive difference in the quality of your relationships.

It Can Happen

These were the three strategies that helped me persevere through a year and a half of being told no while still working full-time to get to my first cheque and beyond. This led to totaling over $1,000,000 CAD in private capital in under a year.

Strangely, I have always had to work on my birthday. I had my first ever pitch for the company on my birthday in 2016. And you guessed it, no one invested. In 2017 per the pictures below, I had another investor pitch on my birthday—that also went nowhere. A month and a half later I received my first cheque.

And on my birthday in 2018, I signed a massive banking client in Canada.