Retailers should lay out a timetable for action, says an IRCE speaker.
There are many barriers to starting a web business, and none of them can be addressed until funding is in place. The typical funding process has several stages, which can be likened to a courtship: first is the dating stage, followed by formal courtship and, if all goes according to plan, the final step is the marriage.
But this evolution should not take two years, says Noah Ready-Campbell, co-founder of LikeTwice.com, a marketplace for secondhand fashion. The retailer needs to convey a sense of urgency to the process, whether it’s in the seed funding, Series A or Series B rounds.
“You need to be really cognizant and get to the ‘marriage’ as soon as possible,” he says. “To get there you might tell potential investors you plan to spend four weeks on dating, two on courtship and one on the wedding.” Because the retailer is trying to woo multiple investors from a larger group, it’s critical to lay out a timetable so all potential investors understand there is a target date for action, Ready-Campbell says.
Ready-Campbell will talk about how new web retailers cannavigate the funding process at the Internet Retailer Conference & Exhibition 2013 in his session entitled “A date with an angel: Finding funding for your early-stage e-retail business,” on June 5 at 3:00 p.m.
Describing the investment timetable also is important in keeping the investor pool focused. “Strong levers are needed to keep all potential investors in the same stage,” Ready-Campbell says. “Be upfront about your schedule. It helps keep you in charge and provides time pressure. Otherwise you can be exposed to the ‘slow no,’ when the investors never say no, but never yes either.”
Session attendees will hear what Ready-Campbell has learned about funding through his experiences at Liketwice.com. The web-only business launched in March 2012 and in September raised $4.6 million in Series A funding. The session will include a consultant experienced in advising Internet startups who will offer advice on how to go about finding angels—wealthy individuals with money to invest in startup businesses—what they look for in a new company and what they expect to get in return.
“The angel round is the seed round, where the investor is investing in you and the market,” Ready-Campbell says. “They are putting in money and staking it on you as an executor. When you get to Series A you need to have some growth data. When Series B comes along you need at least a hint of profitability.”
Internet Retailer’s editors asked Ready-Campbell to speak because he has experience with a successful e-retail start-up. LikeTwice.com is a marketplace for secondhand fashion, in which sellers send in their clothing, LikeTwice buys it, then professionally photographs the garments and lists them for sale. By leveraging this model, LikeTwice offers a like-new shopping experience to buyers, with trustworthy garment descriptions, same-day shipping, free returns and 24-hour customer service. Before co-founding LikeTwice, Ready-Campbell was an associate product manager at Google for three months. He graduated from the University of Pennsylvania with a BSE and MSE in computer science, and BS from Wharton.