Start-up funding 101: a glimpse of what’s coming to Croydon

By - Wednesday 19th August, 2015

Tommy Newman looks forward to Croydon’s new hub for tech start-ups

Recently Robert Ward wrote in the Citizen about venture capital from an investor’s perspective. Now I want to discuss what I learned on the other side of the table: as a start-up.

As I completed my round-trip from my co-workspace at Matthew’s Yard, to my daughter’s nursery, dropping her back home, and back to Matthew’s Yard, I was brimming with excitement at the approaching chance to learn about raising business funding from Francois Mazoudier, managing partner of Tech Leaders Capital (TLC), a co-investment club for tech leaders.

Several months ago I was fortunate enough to be sitting on the panel, representing as a start-up working in Croydon Tech City, and advising Croydon Council on the best bid to run the new Tech Hub space coming to Davis House in early 2016. TLC’s bid shone above the rest, and inspired me to consider new possibilities for my business, in the knowledge that TLC and its impressive network would be coming to Croydon. I’ve been gradually researching and learning about raising funding over the past six months, but Francois provided some real insight into the process.

Here are my key takeaways from the talk:

  • If you’re building a business whose main product is electronic (software, backend, tools etc) read The Lean Startup by Eric Ries to learn how to use continual innovation to create a radically successful business (I second that)
  • Before looking to raise funding, focus on proving your concept and doing one thing very well; you’ll then be in a much stronger position
  • It’s important to research the most suitable source of funding. Options are self-funding, friends and family, crowdfunding, angel investors and venture capitalists; finally today most large scale industrial giants are investing (at scale) in innovative startups, providing way more than the former investors: cash, distribution, orders, revenue etc.

Go after your preferred funders first

A pitch deck will get viewed for on average three minutes and forty-four seconds, so keep things concise.

  • An analyst will look at your pitch deck first of all, so the only purpose of an executive summary is to secure a first meeting, nothing else
  • Don’t be afraid of showing competitors; they are a good thing. It shows there is a market; just ensure to differentiate yourself
  • Tech investors criteria are a great execution team, a great product-market fit, a huge market, a strong market and economics, strong tech lead, good go-to-market timing, strong proof points and the ability to acquire users and make them pay is possible (ideally cheaply and scaleably)
  • It’s a marathon, not a sprint. In raising an average seed round, research shows that companies contact on average fifty-eight investors, meet with forty, and take twelve weeks to close funding

It’s critical to be introduced to a venture capitalist; get networking, get introductions on LinkedIn and in time you will build a network so you are not just cold calling

  • Research who is the best funder for you. Ideally you will get ‘smart money’, meaning money and advice, not just cash
  • Be selective of funders to contact, rather than going after many. They talk to each other, so go after your preferred funders first. A grade A VC may not see you if they know you’ve already pitched, and failed, to impress a grade C (who just might not have been a good fit for you)
  • Venture Capitalists (VCs) don’t actually own the money; they are hired by large funds and are just advisors; look beyond the VCs to their fund pool to find a fit. Think of it like this: they need you to do their job, as well as you needing them.
  • VCs need to make a big return on you. They are essentially making an informed gamble and they know that in most cases that gamble will not produce big returns. They are looking for the one that will balance those that don’t, so aim big, but keep it realistic

Get some proof to take to investors

But a word of warning. Whilst raising money may seem like the obvious approach to build your business, Francois pointed out that most tech companies do not need to do this early on. Indeed, most companies are not suited to raising money from VCs. Raising funding will take a lot longer than you think and that time is probably better spent on developing your product and bringing on early users. Once you have a more defined product, and if you have real paying customers, you have some proof to take to investors and can show how their money will allow you to accelerate growth and ultimately give them the return on their investment they are after.

One thing is for sure: as the re-fit of part of Davis House gets under way, the growing community of Croydon Tech City will be keenly waiting to tap into the support and network that TLC is bringing to London’s fastest growing tech cluster, and I cannot wait to be a part of it.

Tommy Newman

Tommy Newman

Tommy has lived in Croydon for 7 years and is Co-Founder / Chief Technical Officer of, an online service helping people to find private mental health therapists. Tommy is working on a new mobile platform connecting individuals with professionals to improve their wellbeing and enabling them to thrive, email tommy [at] or visit if you are interested in trialling the service. He enjoys tapping into the growing business support infrastructure and community that Croydon has to offer.

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