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March 31, 2021
March 31, 2021
via Business Wire

Being a founder takes a particular type of person, one driven by a vision and with a zealot’s level of commitment. However, there comes a time when a founder realizes that their financial resources, ability to inspire people, and passion are simply not enough to fully capitalize on the opportunity, and that’s when the fundraising begins. There is no one-size-fits-all answer as to when fundraising should occur, but at any stage, the founder of a brand plays a crucial role in the process.

After participating in the prestigious Y Combinator Winter 2018 cohort, Ming Zhao, the co-founder and CEO of the AI-powered skincare brand Proven, has raised $6 million from traditional sources like Belcorp Ventures, Soma Capital, H&H Group, UpHonest Capital, Z Nation Lab, FJ Labs, and Mindset Ventures. She’s also deviated from the start-up playbook, pitching Kevin O’Leary, Mark Cuban, Lori Greiner, Daymond John, and guest shark Anne Wojcicki on Shark Tank, and will be on the fundraising reality show Going Public, recently launched to democratize public offerings, this fall.

Fundraising is a difficult, time-consuming, and important process for the growth of a business. Ming shares her tips for navigating the investment world.

Evaluate the opportunities: There has been a proliferation of various kinds of incubators. Entrepreneurs should do their due diligence and talk to these organizations to understand their track records for actually having helped. This rule also applies to everything else that comes through, such as start-up incubator advisors who want to be on your cap table and get shares.

Find a wise and helpful counselor: Building a start-up is one of the most difficult things anybody could take on. It could save you a lot of time, effort, and resources to have people show you the path. It is hard to evaluate the potential value of advisors upfront, and that’s why entrepreneurs should utilize and reference legal and standard document resources publicly shared by organizations like Y Combinator. They have gone through a lot of start-ups and can provide at least a good structure to run.

It is not an either/or situation: Funding is like fuel for start-ups. Whether it’s gas or electricity, you take whatever powers you. So be open-minded to how you’re able to get help and get the things you need from various different paths. Sign up for different newsletters so you understand the latest thinking in your expertise; stay open on LinkedIn, and be open to different conversations with folks who are similar to you about industries and different ways.

Be prepared for the initial fundraising phases: Founders should be prepared that getting the initial funding is a very difficult thing. Find reputable incubators and accelerators that fit your criteria and use those platforms to expose yourself to different types of investors in a short amount of time. Use tools on the internet where it helps to aggregate different investors into different categories so you know who to reach out to. Try to connect with people who know the right investors and let them introduce you. Understand your value proposition and why your business is different. Understand how your business fits into a broader landscape of what is happening in the world, and why it could ride on a wave of whatever is happening.

Customize your approach: Make sure you know what investors are interested in, and what your thesis and background is, so you can speak the same language as soon as possible.

Fundraising is a continuous journey: We founders shouldn’t see fundraising as actually winning. For a consumer business like us, what really wins the journey is getting more consumers, getting more of them to love the brand and to stay with the brand, etc. We shouldn’t confuse the actual race with winning the fundraising races.

Don’t take any disrespect personally: For female founders, we just have to put on our big-girl pants, be willing to take many more rejections and be much more resilient. The initial phases are like finding a spouse—you can have 1,000 failures during the process but usually, you just need one at the end.


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