Lessons - Essential Fundraising Strategies for First-Time Entrepreneurs | Sarah Dusek - Co-Founder of Enygma Ventures

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All listeners can save 30% off their first order. Just head to cornbreadhemp.com slash success and use code success at checkout. That's cornbreadhemp.com slash success code success for 30% off your first order of these amazing gummies. In this lessons episode, learn to navigate the challenges of raising capital as a young entrepreneur, discover why avoiding bad deals is key, how constraints fuel creativity and discipline and the importance of building a solid foundation before scaling gain insights on strategic fundraising, maximizing ROI and staying focused on profitability for lasting success. What would be the one thing that you would tell a young entrepreneur who's raising money who's in a similar situation to you? 18 months is an incredibly long time, so stressful, so time consuming. So what's the one lesson? What's the thing that you're telling somebody right now who's trying to raise cap? It could be a woman who's struggling to find the right conversations of the right investors gets a or it could just be another young entrepreneur because yes, women probably have a much harder raising money, but I know a lot of just entrepreneurs have predatory term sheets given to them as well. Yeah, it's just hard. Well, there's two or three things I might say. The most important thing just on the back of the story that I just told is just because somebody offers you a term sheet doesn't mean you need to take it. So right, don't do a bad deal. It's always better to do no deal than do a bad deal, right? So do a deal that you feel good about and don't believe the hype that says this is this is the way it's always going to be. This is the only deal you can get. This is the everyone's doing deals like this. This is normal. And yes, there are definite norms in venture capital, but there's always a spectrum of normal. Normal is not one thing. There is no such thing as a normal term sheet. So if something doesn't sit right with you, just don't do it, work with it. And I think the amazing thing I've found about not having access to capital meant I got really creative, right? And I got really, really good at driving ROI on very small amounts of money. So allow the barrier to be an asset, right? So use it to your advantage to get creative, to find ways of making things happen that couldn't have happened otherwise, because when you do get capital and if you press available long enough, ultimately you will find capital. You will find the right capital. You will absolutely no doubt in my mind. But what you can do whilst you're waiting to raise capital is make sure that you get really good at generating ROI, because when you do get money, large chunks of money hit your business, you can then really put that to work and be really good at making that money work for you. And what we see a lot of out in the marketplace is that when money's easy, and we're not in an easy money time right now, we're in a difficult money time, but when money is easy, we overspend, we over capitalize, we get ahead of ourselves, we waste it, and we're not smart. And all that does is it makes it harder for us to raise more money. And so what I would say is get smart with what you've got, because if you can get smart with what you've got ultimately, you'll get good at generating great returns, you'll get great at making money, you'll get much more focused about having to be profitable much faster than potentially you would otherwise, which is actually really, really important. And you'll build a great business, ultimately your business will have great foundations, because you didn't over capitalize too soon or too easily. I'm curious if you think there is ever a point when somebody should be raising money before they're profitable, or do you think that people should really focus on growth funding? Yes. I think a lot of companies, it's quite hard to build something profitable without something to start with. Our own business, we injected $40,000 of initial startup capital and managed to turn that into $100 million in value, but that's a really unusual thing to be able to do, right? To turn $40,000 into cash that you can make more money from. So it usually takes some money to make money. The question is how much money and what do you need to get you going? So figuring out where that sort of first, usually your friends, your family, your network, people who believe in you are going to be the first people to rally around you to help you get your foot in the door and actually start to make something happen. So I definitely believe in raising capital before a business is profitable, but the faster you were thinking about being on the trajectory towards profitability is definitely to your advantage, for sure. So after under Canvas, now you want to solve for a problem. So you experience this, it's not so great experience with the venture capitalist. So this is something that you're trying to solve for now. So where do you go after under Canvas? What's the first step? Is it a lot of people that were operators and businesses that could go into angel investing, or maybe they would bolt on to an existing venture capital firm and maybe try and improve them a little bit, but you didn't do that. Or maybe you did try all those things and I don't know about it, but eventually it ended up with a nigma. Yeah, so maybe that was stupid. I don't know. No, maybe that's what I should say. No, not at all, not at all. So what is the goal? So was a nigma the thing that you took on almost immediately after? Did you take some time and actually just take a break, relax, were you very headstrong and you jumped out? Oh, I took no time whatsoever, which was also probably really stupid. Listen, it's because you're passionate about it. I do think you probably should have taken some time, but it doesn't matter. It doesn't matter. Yeah, growing is what it is. Anytime at all. You got a hundred million dollar exit and you just jumped into like the next job. A huge shout out to bank on yourself for supporting today's episode. Entrepreneurs, here's the retirement secret that Wall Street doesn't want you to know while you are pouring everything into growing your business. They want you gambling your future in their 401k casino with no guarantees. As a business owner, you already take enough risks. Why gamble with your retirement, too? It is time to discover the financial strategies smart entrepreneurs are using to protect their wealth. 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That's bankonyourself.com slash scott bankonyourself.com slash scott. Well, the greasy thing was after that happened. The night we signed the deal for under canvas, you know, we're ready to pop the champagne. I was still staying on for CEO for a year post the transaction. I came home from work that day. It's signed this amazing deal. Ready with the champagne. Ready to be all excited. I have two young boys at home. I'm a mother of two and my oldest then was vomiting up a storm and we had norovirus hit our house that night. For the next two weeks, like a successively someone else got the stomach flu, we spent the next two weeks throwing up in our household. There wasn't even a moment of copying the champagne. But I did go back to work for under canvas for a year of transition post that sale. So things were brewing for me during that year. We're thinking about, what do I do next? What do I care about? How do I make this idea reality in my own head? And I was eager to get stuck in and get to work working with other women listening to their stories, hearing their pain and their challenges. And ready for a new adventure. So that's what happened. And we started investing in the beginning of 2020, which was also a really good time to start a new adventure. Of course. Of course. Yeah, but I was very thankful for it actually, because it meant that during that crazy, crazy time, I still had a very strong sense of purpose and people to support and people to rally around. Because it's actually very difficult once you, and maybe not many people talk about this actually, but when you've been a CEO and you've been a founder of a startup for a long time, I mean, 10 years is, you know, a good chunk of one's life. It was a quarter of my life. It's very hard to suddenly not have that. You know, I had a lot of people I was responsible for, you know, I spent my life traveling from one place to another, being all over the place, meeting people, working with different groups of people. And suddenly for all to stop is quite strange. And I'm 40 something. So I wasn't ready to retire. And, you know, it goes on a beach. I still had a lot of energy and a lot of passion. And so actually, I was very thankful that when the pandemic rolled around and there was no beach to go sit on, that I wasn't planning on sitting one on one. So, yeah, it was serendipitous. And to each their own, I mean, I advocate for rest after having a 10-year run and building a business. But I also know that it's, yeah, and I will advocate a little bit from a little bit. I'm a large again. But it's funny, because you're not that abnormal to be quite honest. I don't know too many people. Like I interview a lot of people. I was an operator myself and then still into a degree. And it doesn't matter if you have a successful thing or a successful event or something, and you're just like, what's the next thing? It's always, well, it's just a personality at the end of the day. I really believe that. It is. And the kind of people that are founders and entrepreneurs, you know, that's kind of like the inbuilt thing is you're designing to be going where no one else has gone and doing things. No one else has gone. And you're constantly looking for, you know, the path that doesn't exist yet, so that you can go forward. So it's a blessing and a curse for sure. Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode. See you in the next one.