Executing on a Genuine Fundraising Strategy
How Nitzan P., Founder of ReUp Education, successfully raised a Seed Round
Excerpt from Women, Work, & Worth Podcast on how Nitzan P., founder of ReUp Education, raised seed round capital
A couple months ago, I met Kate Gremillion, the founder & CEO of Mavenly + Co. In our initial conversation, we discussed her company’s focus on providing young women with resources to design a career and lifestyle with purpose. I explained to her the work that I have been doing at Backstage Capital and she came up with the idea of having a special podcast series on her Women, Work & Worth podcast. In the series, Kate & I would interview successful female founders that could provide the greater community with insights on how to build a successful startup.
The following is an excerpt from the 3rd and final episode of this mini-series, where Kate and I interview ReUp Education’s founder, Nitzan Pelman, to discuss how she successfully raised a seed round of venture capital. To hear the full episode on Nitzan, check out the podcast here. This transcript has been edited and condensed for clarity.
Earnest Sweat: Nitzan, we would love to hear about how you use your own personality and strengths to find the right potential investors. But I’m curious, was there a period of time where you strategized and thought about how you should approach the process. Did you take the time to determine what types of VCs you wanted to attract? Did you create a list of potential investors that would be a great fit or did you simply leverage your network by getting yourself out there? I think it would be key for us to first learn more about your fundraising strategy before we discuss the specific insights that you came away with from completing your seed round.
Nitzan Pelman: Well I think there are two obvious groups of investors. One set of investors for my startup are education investors (domain expertise). There’s a whole host of education VCs out in the Bay area but also all across the country. And so Paul, who you had mentioned earlier, has relationships with a lot of them. So I was able to leverage him initially for some of those interactions but had to use my larger network to connect with the host of other investors that were not connected to Paul.
From these efforts, I crafted a list of the education investors and started to build relationships with those people in genuine ways. I think that if you come into meetings and you’re just focused on what the investor can do for you, then they become very transactional very fast. So I really love to have substantive, thoughtful conversations with people about their work and what they’re passionate about. Then at the very end of that longer conversation — that could for an hour or two hours — I share that I’m looking for seed funding, and ask if there are any education investors that they recommend I know. Given these individuals now have a good sense about my startup, I ask if there is any fund they believe would be interested in us.
The second group of investors that were important to me was impact investors. Specifically, because ReUp Education has a double bottom line mission-driven focus. And so, I also started to network in different ways to find those investors because they weren’t specifically education focused but just impact focused. I started doing my research around impact investing and searched for different networks to figure out who I knew that might know this subset of investors. Actually, one of my biggest investors, who wrote a $500K check, was an introduction that came from a different impact investor who thought ReUp Education was too early stage for their respective fund. However, the initial impact investor did think our startup would be a really great match for another fund and made an introduction. Eventually, the new investor ended up funding us and I had never heard of that person or firm and I would have never known about them. So it just proves that valuable introductions come from the most interesting places.
Nitzan Pelman is a social entrepreneur at heart and cares deeply about finding solutions to break the cycle of poverty through education. In July, 2015 Nitzan founded ReUp Education, which partners with universities to re-enroll students who have dropped out of college. In the fall of 2016, ReUp will engage over 25,000 students in coming back to college and finishing their degrees.
Kate Gremillion is the founder of Mavenly + Co., “a community of young women having honest conversations about college, career and life and helping them create a lifestyle by their own design.” Mavenly + Co. has a podcasts, blog, interview series, and two-day workshops.
Earnest Sweat is an Entrepreneurial Engineer for Camelback Ventures and an Investor in Residence for Backstage Capital. If you have any questions or requests please connect with Earnest through LinkedIn or Twitter.
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