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As part of the Founder Institute’s series of free online startup events for entrepreneurs practicing social distancing, we were pleased to welcome Joe Bayen, Founder & CEO of Grow Credit, on February 24th 2021 for 'A Black Founder's Guide to Raising A $2M Institutional Seed Round.'

Raising an institutional round is a challenge for any entrepreneur, but this is particularly the case for minority founders, where according to statistics, only 1% are successful. In a discussion based upon Joe Bayen's Medium article of the same title, 'A Black Founder's Guide to Raising A $2M Institutional Seed Round,' we learn from Grow Credit's founder about the various steps he took to achieve his fundraising milestones, and bring the social fintech product to market.

Watch the full video, or see highlights from our conversation with Joe Bayen below.

Bayen’s Top Fundraising Tips:

  1. Meeting with Investors is a Relationship-Building Exercise
    When you start raising an institutional round, it’s a completely different ball game. It’s when you cannot do it on your own… but investors will never give you money from the outset: it is a relationship-building exercise. So in order to receive our funding from Mucker Capital last year, you know, I’ve known Mucker Capital for three years.
  2. Communication Culture Translates from Your Team to Your Investors 
    Because we have those weekly [internal team] reports, it enables us to seamlessly send those reports to our potential investors on a monthly basis. You know, maintaining that relationship with our potential investors is crucial. You meet them for the first time, it’s a dating game: no one is going to invest in you on the first meeting, it’s just not going to happen.
  3. Fundraising Must Be Your Full-Time Job as a Founder 
    As an entrepreneur, once you switch from being an operator to fundraising, you have to stop operating completely. And that’s the single most important advice I’m going to give you here: once it’s time to fundraise, you have to drop everything that you’re doing—everything—and just focus on fundraising. Because fundraising is hard.
  4. Fundraising Confidence is Not Faked, But Earned By Hard Work 
    Lastly, confidence: you cannot fake confidence. And this confidence comes from hard work. You know that if you work extremely hard—and you know that you did the work—then you will be able to come confidently into investor meetings. It’s very important to fundraise only when you’re very confident with your data… but confidence is the greatest asset you have once you begin that process of fundraising.
  5. Importance of KPIs and Data Transparency to Investors 
    To investors, once your product is launched, demonstrating your KPIs and growth on a weekly basis is extremely important… it really depends on the individual business. So in our case, our conversation rate to premium plans, our churn data… investors want to see your churn, how good are you at retaining your customers… the payback period… So that’s the type of data to make sure to share on a weekly basis… But there’s no company in the world that is always working perfectly. If you only share a rosy picture of your company every single week, no one will trust you—because it doesn’t work that way. You build trust by sharing your wins AND your losses.

Snippets of Bayen’s Startup Battle Stories:

How Joe bootstrapped an earlier startup FreeAppADay.com to 12M users & $18.3M in total revenue

Grow Credit’s Scrappy Startup Story: By Way of a Pivot + a Bikeshare Detour 

We generated 100k installs in 3 days, and made $15,000 in revenue—and I thought, ‘Oh my gosh, this is a business here.’ So I acquired ‘FreeAppADay.com' for $9.99 on GoDaddy, and then I asked the developer if he was going to pursue this venture -and he told me, ‘No, I’m done, it was just for Christmas.’ So I purchased the site from him for $3,000, and I basically made a press announcement that AppventCalendar would become FreeAppADay.com starting January 18th. Then I called a bunch of developers I knew, to become the first featured apps, and we launched.

To learn more about Joe Bayen's personal founder journey and the startup story of Grow Credit, read his Medium article that formed the basis of this conversation, 'A Black Founder's Guide to Raising A $2M Institutional Seed Round.'

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Graduates of the Founder Institute are creating some of the world's fastest growing startups, having raised over $950M in funding, and building products people love across over 200 cities worldwide.

See the most recent news from our Grads at FI.co/news, or learn more about their stories at FI.co/journey.

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