Hello to Canada’s SaaS Community,
The saying goes that a startup CEO has two jobs during every raise: fundraising and actually running the business. This adage held true for Shawn Hewat, CEO of Wavy, when she led the company’s $2.5 million Seed round. Speaking with SAAS NORTH, ahead of her talk at sister conference, Tech Talent North, Shawn explained how she got ready to fundraise.
Key takeaways:
- Think consciously about whether your company vision requires fundraising and what the capital will do for your business.
- Build a personal data room and use that to build a compelling story about your present state and future vision.
- Create as many processes as possible to extricate yourself from the day-to-day so you can focus on fundraising.
Co-Founder/Producer, SAAS NORTH Conference Editor, SAAS NORTH NOW
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Fundraising for a startup is difficult no matter what, but there are ways founders can make the process a little easier on themselves. Speaking with SAAS NORTH, ahead of her talk at sister conference, Tech Talent North, Shawn Hewat, the CEO of team building and culture platform Wavy, explained how she got the business—and herself—ready for a successful raise.
Preparing leadership
When Shawn and her co-founders started Wavy, the company operated more like a tech-enabled services company than a pure tech company. The platform offered curated virtual event experiences for companies and counted some of Canada’s biggest startups as its customers. Doing services—and making revenue from almost day one—meant Shawn had no real need to fundraise at the beginning.
A couple of years passed with Wavy’s original model. The services arm of the company was working well, but Shawn felt there was a bigger opportunity.
“[Virtual events were] helping customers, but we weren’t getting to the root of the problem,” said Shawn. “And there was more we could do technology and product-wise to solve this.”
On top of virtual experiences, the company built out analytics to help companies understand the impact of their events and culture-building activities. Now, the Wavy platform measures happiness, engagement, and how much an event positively impacts employees’ perceptions of an organization. Shawn said Wavy also expanded its use cases, meaning its virtual events and backend analytics can apply to client entertainment & community efforts now, too.
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The pivot worked well—Shawn said the small team of five could barely keep up with demand. This brought fundraising back onto the table since the company needed more resources to scale. But that didn’t mean Shawn immediately called up a bunch of VCs.
“We actually spent a lot of time validating whether we should fundraise and why,” said Shawn. “I built out a whole document on our thesis on fundraising.”
The thesis looked at what might prompt a fundraising round and then whether the company was in a good spot to fundraise. Customer traction signalled the company was in a good spot to fundraise. And Wavy’s leadership team—all first-time founders—were eager to find partnership and mentorship on top of capital, pushing them towards the VC route rather than debt or other capital instruments.
“A lot of businesses don’t need VC investment,” said Shawn. “We validated that Wavy does and are aligned with that.”
Preparing personally
Armed with a thesis and a plan to raise $1.25 million in pre-seed funding, Shawn had to prepare herself for the fundraise. In particular, she needed to mentally prepare in two ways: first was getting into ‘vision mode’ to understand the long-term potential of the business. The second was to understand the business holistically so she could sell the vision to investors.
“The work that was most impactful was taking time and space to get out of the weeds and the day-to-day operations of Wavy,” said Shawn. “I was and still am quite involved in that. But when you’re speaking with investors, you need to be telling the story of five, ten years from now and painting the picture of why this is going to be something much bigger. And that’s a challenging mental exercise to go through.”
To get more into vision mode, she spent time working with trusted advisors in the space. She then built a data room—”not for investors, but for [myself]”—to look at customer, product, and business analytics from a fresh lens. These together helped her build a compelling story.
“Pulling together our data room of different scenarios, of projections, of different ideas for our product, customer stories, and data points and putting together that deck I think is most important for founders to do first, for shaping the future of their business,” said Shawn. “And if that aligns with your long-term vision and it’s something that aligns with VCs, then take it to them.”
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Preparing the business
Shawn needed to set up her team to operate without her as much as possible while she focused on fundraising. Doing that meant getting down to the absolute essentials.
Wavy’s business at the time was already struggling to keep up with demand, so Shawn felt ok slowing down on top-of-funnel efforts in the short term to fundraise. But one area that couldn’t falter was the customer journey. The team worked on the whole customer journey mapping and anywhere Shawn was involved, they made adjustments. Ultimately, the team was able to change who was responsible for certain aspects of the journey, for instance, customer onboarding, so Shawn could feel confident the ship would run without her.
The team also switched from Shawn doing a lot of central analysis and reporting to each person reporting on their own responsibility—for example, the person leading onboarding also creates reports on onboarding that are shared with everyone else. But that’s not to say Shawn got out entirely. ”I’ve never worked longer hours than when fundraising,” she said. However, the plan worked and it freed up just enough time that Shawn could focus on investor meetings.
On the strength of Wavy’s traction, inbound demand, and staff planning freeing up Shawn’s time, the fundraise went better than expected—turning from the initially-planned $1.25 million pre-seed into a $2.5 million Seed round.
The staff preparations also had a secondary benefit as well—the company is more well set up for scale in the future.
“We’ve spent a lot of the last year since our fundraise building our team and really focusing on our product,” said Shawn. “And we have much more capacity today and much more product-led strategy that can help us grow. So when I do go out to fundraise next, I’ll have a lot more confidence that our team and our product can run with things and are super well equipped to do so.”