Finding Funding For Your Infant Brand

If you've just joined us, Oddpodz is a new online community for creative doers and problem solvers. Founder and branding expert Karen Post, who writes a regular column for fastcompany.com, brings you the play by play of a startup brand.

Funding -- finding fuel for young brands

It’s been a year and a half since Oddpodz was born. We started with scribbles on a white paper napkin, and that evolved into an actual business plan. Our accomplishments for July included launching a modest ecommerce site in order to market our branded soft goods, and beginning a fan database. In September we published "Openeyez," our first weekly e-zine. In January we debuted a bare bones social network and an online content destination. Then in June we enhanced our site presence with new features and improved navigation. We are now ready for traffic and ready to build a premiere brand.

That’s the good news

We’ve accomplished a lot with a little. Oh yes, we’ve made some mistakes and learned plenty of lessons. But fortunately, we also received significant support and had big fun too.

The "other" news: we need more funding

Fundraising is never an easy task, but is especially difficult when you are a startup. Finding funding will test your resilience and grade your stamina. Raising capital is both emotionally painful and a great business high. Fundraising is a critical skill to master because it forces a startup to perfect their brand story and be accountable.

Oddpodz completed a $650,000 round of initial funding. The majority of our initial investor group came from the standard "friends and family" category. While it’s true that some capital came from outside sources (for example, from strangers the principals met on airplanes), the majority of the investments were made because the investors knew and believed in the founders.

The second round of funding is different. The target audience is mostly strangers. While the management of a startup is always the key factor to an investor, the clarity, the company business model, and the category distinction become key identifiers.

Stress on steroids

The most challenging part of fundraising is the time it requires at a period when both manpower and time are extremely scarce. What makes it even harder is the need of a startup to keep moving forward, which translates to spending money that you don’t have.

We felt like we were hitting a wall. Were we talking to the wrong investors? Did our pitch need tweaking? Maybe both. We stepped back and invited some new fundraising minds to take a look. It cost us some cash and about 50 hours (both of which we didn’t have to spare), but it was necessary.

Working with these veteran fundraisers, we gained insights and made our adjustments. Startups are constantly evolving organisms; that’s one of the great aspects of being one. You need to be flexible and open to moving quickly when new market insights are gained. Our result is a much clearer, investor-friendly business plan. With our new and improved plan in hand we are on a mission to raise another $600,000.

On your journey to build your company you will meet many prospective investors. Keep a spreadsheet of all of them to note any related investments they have made, track who else knows them, and log your contact history. Conduct ongoing homework on investor prospects. One great tool to keep the daily pulse of people and companies in the news is a Google Alert to start. Another site to check out is The Funded, which invites entrepreneurs to post comments on funding sources. You’ll find information ranging from gracious compliments to dreadful integrity flaws about most of the active funding sources.

Timing is a big part of deal funding. Sometimes an investor will pass on your opportunity because they are involved in another time-consuming deal or because you are at a stage that is too early for them. Just stay in touch without being a pest. Be resilient! I know it is easier said than done. It’s hard to not take it personally when you feel that a stranger is saying your baby is ugly.

A few investors have dinged us (that’s startup talk for rejected). Some investors will never invest in you; often it is simply not a good fit. In new categories it’s likely they just don’t understand your space. Unless there is a solid reason, an investor should not be kicked to the curb due to lack of their immediate acceptance. Oddpodz believes there are still possible matches for our company as we hit future milestones of production and fundraising.