Raising a Seed Round on Zoom during COVID
June 1, 2020
We could not be more excited to close our pre-seed round of funding! Doing it in the middle of a global pandemic has been particularly challenging, but also exciting. Market conditions have forced a lot of tough questions but have also presented several opportunities for learning. These learnings have influenced our direction for the company, and we feel stronger than ever as we push Haekka forward.
Funding for Haekka has been a long road. After listening to market feedback on our initial idea for a B2C consumer privacy service, we knew we had to pivot to B2B, something we know well and where the market was leading us. When the market is telling you where to go, you need to go there. As a result, we delayed many of our fundraising conversations until we had a better understanding of what exactly we were building.
Fundraising didn’t really start in earnest until the end of March. Unfortunately, this coincided with COVID-19 and one of the worst economic downturns in decades. Fortunately for us, Haekka is not our first startup. I co-founded and raised $13M over three rounds for my previous company. Because of that experience we had a slight built-in advantage.
At the same time, COVID-19 is entirely uncharted waters, so we honestly didn’t know what to expect when we reengaged with investors. Another wrench was that we wanted to build Haekka differently. Our goal is to operate the business by looking at talent in both remote rural locations (basically anywhere that isn’t a tier 1, 2, or 3 city), as well in remote locales within the Rocky Mountain Region. As a tech company, this is too risky for most investors, even with the shift to remote work. We knew the type of culture we wanted to build, and we knew we needed to raise from investors that shared this same mindset.
Of course, meeting with investors in person was not an option. Given that hard constraint, building a relationship with investors was a unique challenge. One we had to overcome entirely through Zoom. Through various connections and dot-connecting, we were fortunate enough to find a pre-seed fund that had conviction about our team and the market. They took a chance on us, despite never having met us in person, and agreed to fund half of the round.
Fundraising is just like selling or partnering. It’s about building a relationship. It should come as no surprise then that the hardest part about fundraising during quarantine and a global pandemic is building a relationship with your future investors. This is much harder for early-stage companies. At later stages, there are metrics, spreadsheets, models, and even existing investors that help new investors gauge risk. These later-stage investments are largely based on the momentum of the business. For a new company like Haekka, one that is both pre-product and pre-revenue, the investment is all about the team and the market. To sell a new investor on taking this type of risk, especially during an economic downturn, you need to have an incredible team and ripe market. We had both.
When all was said and done, we received financial commitments after just two Zoom meetings and a handful of phone calls.
The word conviction keeps coming back as I think through how we completed the round. Our investors believed in what we were doing and they believed, despite being so early, that we would eventually figure it out.
To fill out the remainder of the round we received a boost from another investor that was connected with our pre-seed investors. We also pulled investments from other angels we previously had met in person that believed in the team and the opportunity.
The success of our funding round was also a product of the times. Haekka fits with the new post-COVID world order.
We were convinced on every point above even before COVID hit. The pandemic has just accelerated our thinking while also proving that the market trends are there.
Both the process of raising money as well as the market conditions have shaped our culture in several important ways.
We’re operating Haekka in stages. The pre-seed stage is first. We have very specific goals for this round of funding. With over 24 months to achieve these goals, we hope to underpromise and overdeliver. Tactically we align our shorter-term actionable quarterly goals with the longer-term pre-seed goals listed below.
We’re excited about the future and hope you’ll follow along as we progress. If you’re interested in learning about what Haekka has to offer, we encourage you to reach out to us via email, or by subscribing to updates.
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