The Incredible Intercontinental Series A Round, or, how we raised $9m from top US investors

This post was written by Asi Sharabi, one of the early guys at Lost My Name

So you might have heard the news. Shit just got real. Yesterday we announced to the world our exciting series-A round, led by Google Ventures, with participation from Greycroft, The Chernin Group, Allen & Co and Cris Conde. We assembled a proper dream team of backers from London, NYC and LA that bring solid expertise and insight across technology, media and entertainment.

To have such an amazing group put their faith in us is both energising and humbling.

This has been in the oven for over 6 months now and we learned a lot. 589 emails, 32 meetings, one term sheet and many sleepless nights. Here are some notes and tips from the process.

(note: it's the first time we're raising on such scale, which in no way makes us experts. Proceed with caution).

Why we raised money?

To date, in just over 2 years, we have sold over 600,000 books in 136 countries. We were completely overwhelmed by the love and incredible feedback we got from parents and kids all over the world. It is also very strong evidence for a product-market fit. We learned, in a good way, that the market for beautifully and thoughtfully executed personalised products for children is infinite - there are very few markets that replenish themselves steadily like the one we operate in.

The scale that we reached in only two years, the first of which was in a pet-project mode, gave us the confidence and huge motivation to take this even further. We are going to build an amazing global business that combines the power of stories with the possibilities of technology to create magical experiences for children and families.

So why did we raise, you ask? Well, this round was predominantly strategic for us. We were incredibly fortunate to have proven profitability and scalability, and the best time to raise capital is when you don’t really need it. We raised because we realised that, while financially we can continue to happily bootstrap, to be able to deliver on these hugely ambitious goals we set ourself to achieve, we will need some extra capital and seriously strong partners to help us along the way. None of us in the building has ever done anything near the scale we aim for so we need to extend the team - internally and externally.

The goal is to grow the company to the next stage and investors, advisors and board members who have business leadership experience in your industry at later stage companies can help propel your business into that next phase.Admittedly, when you’re in a startup mindset, which we were in from day one, it’s quite seductive to play the game - to take some big bucks from top investors and go ‘all in’. Vanity? Perhaps. But we were also convinced that, with the right backers, we have a better chance of success. And so we set ourselves on a mission to find the best partners/investors to help us realise this dream of making millions of magical bedtimes.

Our strong starting point to the conversations with VCs enabled us to think carefully about who we wanted to bring on board and to optimise for the right things. We considered capital as a commodity and were carefully looking for value beyond capital.

Optimise for value, not valuation

That was our second rule. The first and most important thing for us to optimise for was chemistry. I’ve heard more horror stories about investor relations than marvelous ones, and we made ourselves a rule that the people we brought on board must be genuinely nice people, people that we actually want to spend time with and will enjoy working with. We wanted our investors to be hands on, to challenge us, and, above all, to hustle their ass off for us.

Like many things, the idea of optimising for value - not just for valuation - started merely as an intuitive mantra, and it took me a while (and some good few conversations) to focus and be able to articulate the challenges and risks we are going to deal with, where are the gaps, and what kind of investors can best help us on this journey.

Time you spend fundraising x finding the right partners x getting the minimum deal you are happy with.

Capital raising is some kind of a juggle, struggle and a compromise between these three parameters. You can spend a year on optimising for the perfect investors at the best valuation but when you have nailed that deal you probably don’t have a startup to go back to. Similarly you can jump on the first term-sheet and close in 2 months only to later find your investors are useless or worse, destroying value.

Take your time but don’t take your time.

If you’re in a good place - you’ve found your product-market fit and you are profitable and scalable - raising capital should be fairly easy. There’s tons of capital in the market and therefore healthy competition on ‘quality’ deals. Everyone who's been there rightly says that capital raising is a full time job, that everything else takes backseat. That’s mostly true. There’s a lot of frustratingly dead time between meetings and emails and DD but it’s less about time, it’s more about your headspace. Most of the time in the past 6 months, even after a term sheet was signed, (perhaps even more) I felt that even when I was at the office I was only at 50% capacity, as no matter how smooth is your process, and ours was as smooth as it gets, it occupies every minute of your waking and sometimes sleeping hours. It can really suck your energies. And there are consequences of being in reduced capacity for good few months - fundraising creates almost inevitable leadership and management debt.I now know that I’ve lost a full quarter of a year in some of the business areas I look after and I need to find ways to accelerate paying my debt. So optimise for whatever you need, take your time to do proper screening and due diligence on your investors but try to do it at the shortest time possible.Final tip: beware time wasters. We had quite a few people that for a while didn’t say no, but didn’t say yes either. A decent VC will get to you with clear next steps (no / we want to hear more / come meet other partners / send some docs) within days or a week maximum since you’d last been in touch. If they don’t, they probably just want to keep you semi-engaged (i.e. hopeful) while they procrastinate, busy with other deals or just waiting for others to blink - none of which are great signals for respect and transparency.

Optimising for value

Finding the best partners in the shortest amount of time can only be done if you can be super clear and focused on what you understand to be of added value to your business. Big VC brands could have an advantage, or not, but much more important is the person you end up working with. Some VCs are compulsive name-droppers. Do your diligence - talk mostly to founders from their portfolio, preferably both successful companies as well as failed ones. You will learn tons. As part of our own DD, we crossed referenced with portfolio companies founders and asked all potential investors to answer the following questions for us: * Where specifically do you think your fund add the most value as an investor ?

  • What do you think you bring to the table that is better / different than other traditional funds?

  • What outcome are you expecting from this investment?

  • What do you consider a success?

  • What kind of access we have to the wider fund team / network?

  • How do you connect your portfolio companies together so they can learn from each other?

  • What companies do you wish you could have invested in? Why? What value would you have added?

  • Which other VC's have you enjoyed / benefitted from co-investing with both in UK and US?

  • Do you offer any operational support to your portfolio, eg engineering, recruiting or legal?

  • What do you think are our weaknesses and how do we address them?

It took us a good few meetings to learn what VCs can and cannot do for you, and we ended up with the following wish-list:

USA focused USA has been our biggest market since the beginning of this year and we strongly felt that to properly crack this market we would need a strong USA base and network. So while it would have been much easier for us to raise in the UK, we decided that it was worth the time to make friends and optimise for USA investors. A quick piece of advice - it’s not easy (more so for non USA based startup) to get to a meeting with top VCs. An intro from a founder they backed goes a long way.

Passion for, and experience with, tech + media startups Our business is quite unique in many ways. We are not aware of another full stack, vertically integrated publisher with a content+commerce business models (with some inspiration from SAAS). But we operate in a world where new business models are popping up around the broader area of tech + media or tech + entertainment. So we looked for people who have interesting experience in founding, building and scaling global new media companies. Naturally, these investors are passionate about the power of the web to invent new exciting ways of directly creating value for people, and directly extracting value from people, in the areas of tech and media.

Diversity of skills and networks We wanted to have different investors with different backgrounds, with super strong networks. From London to LA via NYC, from Fortune 500 CEOs to outstanding exits to Disney, from powerful engineering cultures to Hollywood vibes, we assembled a proper team of incredibly smart people. In a world so biased towards men, we’re particularly proud of having two women on our board (Avid from GV and Dana Settle from Greycroft).

Final tip - put your ducks in a row, and don’t pitch to the people you think you want most in your round, first. You really do get better over time so keep the best ones to the end.

Getting the right deal

Finally, you want to be happy with the deal/valuation you get. As I mentioned earlier there’s a great competition on quality deals and coming to the table with solid revenues/profits. This gives you a lever to stick to what you believe is a good deal. And if you read tech press you know that in the current climate, valuations are much more of an (abstract) art than a science. Ask your angels or just someone with a lot of experience how would they go about arriving at a valuation of your company.I’ll say it again and again, (from my very short experience of capital-raising) optimising for valuation is mostly wrong. So the common practice of getting a term sheet and then shopping around was completely out of the question for us. We proudly ran an open, honest and transparent process. It paid off at the end. We got the best people we wanted at a valuation we are very happy with. A win-win.We managed to get through this daunting process and still enjoy it, most of the time. We could not have done it without the fantastic help of our friends and angels. For their time, effort and great advice I’m forever grateful.And now….back to work!

Comments

Join us!

If you’d like to come and work, play and hang out with us, here’s what we’re looking for. Though you could just send us something phenomenal, leaving us with no choice but to follow up, to:

careers@lostmy.name

Financial Controller

We’re looking for an experienced Financial Controller to oversee the global reporting and compliance functions, leading a team of two finance analysts to deliver continuous improvement in the financial operating model.

Reporting into the CFO, the successful candidate will demonstrate a high degree of commercial acumen and be comfortable working in a fast-paced and dynamic start-up setting where every week will present new opportunities and challenges to navigate.

With ample room to grow, this role is a great chance for the right candidate to work alongside the leadership team and deliver tangible improvements for the business allowing us to deliver on our 3 year strategic plan.

The key areas of focus are:

Reporting

  • Ownership of the financial month end close process for Lostmy.name Ltd and Lostmy.name Inc
  • Consolidation accounting for Lostmy.name Group (UK and US Entity)
  • Preparation of month end commentary packs and presentation of results to the senior leadership team together with key action points
  • Cash flow and working capital management

Compliance & Control

  • Overseeing global tax, regulatory and compliance agenda including Sales, Income and Payroll Taxes in the UK and US
  • Owning the year end external financial statement audit process
  • Laying down a robust control environment in order to deliver accurate financials with a high level of data integrity

Business Partnering

  • Leading cost saving initiatives to help the business to improve operating efficiency
  • Working closely with the BI team in order to streamline and automate the reporting process
  • Working closely with the engineering team on the R&D tax credit workflow

Requirements

  • Qualified accountant (minimum 2 years PQE in an industry position) - ACA, ACCA, CIMA
  • Experience managing a team and overseeing a financial month end close process for a group
  • Experience with US accounting/tax is a plus
  • Willingness to roll up sleeves and get stuck into the detail while simultaneously keeping an eye on the big picture
  • Self- starter, high degree of emotional intelligence and comfortable making decisions where there may be a high degree of uncertainty
  • Experience using cloud accounting software; we use Xero in combination with receipt bank. Experience of these packages is a plus but not a requirement
  • Experience in start-ups/tech/publishing/retail/consumer products is a plus but again not a hard requirement

Benefits

  • Competitive salary and a real stake in the business - you'll share our success
  • Be part of a fast growing company creating products that are really loved by customers all round the world
  • Manage your own work as part of a small, tightly knit team
  • Flexible office hours
  • Awesome BUPA healthcare for you and your whole family
  • Fantastic mobile phone scheme & childcare vouchers benefits
  • Training budget of £1000: we'll sponsor any conference you wish to attend or speak at
  • Delicious team lunches

Senior Copywriter

Words are brilliant. But there are millions of them, and without good writers, words just sit there in the wrong order saying the wrong things. Rotters.

We’re looking for a remarkably creative comms writer who can make words do exactly (exactly!) what they need them to: entertain, surprise, jump through hoops, play the cello — anything they command. Someone with the ability to be playful and hilarious, who isn’t afraid of a good pun, but who is also marvellously disciplined and hard-working. And they should be brilliant at ideas too.

Feeling confident?

You should have a lot of experience writing comms. You have the knack to be funny and clever without being self-indulgent. You have a light touch but can also land a message with real weight. You know how to edit yourself, how to think about messaging hierarchy, how to make people open emails, click buttons and buy products. And you should be able to create funny, sharable content that your mum might see and chuckle at before boasting to friends that you came up with it. You should also be self-motivated, pro-active, collaborative and self-sufficient. You should know how to write for email, social media or on the side of a banana.

Most importantly, you can make people smile every time they read your words or ideas.

Lost My Name is one of Britain’s fastest-growing brands and this is an opportunity to help turn a successful start-up into a global name. We are a playful, kind brand. This opportunity will be ridiculously exciting to a smart, funny, eloquent, engaging, intelligent, autonomous, experienced, creative and all-round superb candidate.

The team you’ll be working in delivers creative output at a higher-frequency than any other team in the business. We literally ship handfuls of content every week and watch and learn from the public reaction. We get to directly shape and influence the brand by continuously exploring and publishing new concepts and ideas.

This role is the sole copywriter in the team, which gives you a central role in expressing the tone of the brand. You will report to a very experienced writer, who can help you sharpen your talent even more.

Key areas of focus

  • Writing emails and blog posts for our weekly Editorial content
  • Writing humourous, sharable content for Twitter & Facebook
  • Collaborating with our designers to devise and develop creative editorial concepts
  • Writing pithy, dad-joke-esque comments on our Instagram content
  • Writing emails for product promotions
  • Helping to firm up our tone of voice for Twitter and Pinterest channels
  • Helping to champion and promote the brand tone of voice across the business

Experience

  • 5+ years’ experience as a copywriter for well known and/or playful/entertaining consumer-facing brands
  • 3+ years of experience with SEO, email, web copy
  • Ability to produce both long-form and short-form writing
  • Extensive experience and understanding of all social channels, including behaviours and algorithms

Benefits

  • Competitive salary and a real stake in the business - you'll share our success
  • Be part of a fast growing company creating products that are really loved by customers all round the world
  • Manage your own work as part of a small, tightly knit team
  • Flexible office hours
  • Awesome BUPA healthcare for you and your whole family
  • Fantastic mobile phone scheme, childcare vouchers benefits
  • Training budget of £1000: we'll sponsor any conference you wish to attend or speak at. Travel the world and share your knowledge on us!
  • Delicious team lunches

Japanese Speaking Customer Service Angel

We're looking for someone to help us share the Lost My Name magic with our friends in Japan! We’re looking for a brilliant Customer Service Angel to help support our increasing presence in Japan. What kinds of things would you get up to in this fun, flexible role? We are so glad that you asked...

Customer Service, mostly...

People approach us with all kinds of queries. Sometimes they just want to know how much shipping is to Tokyo (it's FREE!). Other times, a book has gone on a different route in the mail system and we need to re-create it ASAP in time for a birthday party. Occasionally a customer would like to change a shipping address, or add a personal dedication.

We also get an incredible amount of feedback with ideas for improvement and future products, and just lots and lots of heartfelt thanks for such a wonderful book. These are just a handful of examples of the issues and topics we deal with on a daily basis. And we like to answer and solve ALL of these inquiries in the same way: super responsive, polite, empathic and delightful. We handle our customer support through a collaborative online platform where you can respond, solve, escalate, re-assign, tag and archive all queries in an efficient and transparent way. If you know how to use Facebook or Gmail, you’ll have no problems with our system.

What else should you know?

The role is a remote working opportunity, with some time flexibility to suit you - e.g. mornings, evenings and weekends. There’ll be an induction period with our marvellous training and co-ordinating team, along with a detailed explanation of how it all works.

So do you think that you can help us? If so, then click Apply Now.

  • You got a flair for friendly and positive digital communication - you know how to be nice, and genuinely lovely online
  • Fluency in Japanese and English language (written and spoken) essential
  • You’re looking for a genuinely exciting and meaningful new adventure, and the idea of making children more curious and kind sounds awesome
  • You must be available for at least 20 hours per week (flexible, including weekends)
  • You’re a super motivated, dedicated, smart and an energetic self-starter
  • Ability to work under pressure and adapt quickly to adverse situations

Lead Designer

You’ll have a real passion for design and communication, and a genuine desire to do brilliant work. As a Lead Graphic Designer you will be responsible for taking the lead on the creative development of design projects across multiple platforms. Driving the creative standards of the Design Team and developing junior designers’ creative abilities, making sure the creative brief is fully explored and delivered to the highest standards.

Key Responsibilities

  • Responsible for the design and production of graphic design across multiple platforms.
  • Responsible for working with internal clients to deliver requirements on time and in line with the brand style.
  • Responsible for applying and co-ordinating the design across the brand.
  • Use a good awareness of design processes to question and challenge design briefs and solve design problems.
  • Be aware of current design trends and attitudes to help inspire the team
  • Understanding peripheral processes, i.e. print, interactive and mobile platforms.
  • Manage and develop junior designers.
  • Work closely with the studio manager to manage and prioritise the workload on a project.

About You

  • Ability to deliver against tight and complex timelines.
  • Knowledge of and sensitivity to trends influencing design in general.
  • Ability to manage multiple and competing work priorities, demands.
  • Strong written and oral communication skills, including ability to make persuasive presentations to internal audiences.
  • Driven and passionate.
  • Stress resistant and confident.

Qualifications and Experience:

  • Recognised design degree.
  • Significant industry experience.
  • Versatile and open mined.
  • Meticulous crafting and attention to detail.

Skills:

  • Excellent communication and presentation skills.
  • Dedicated, passionate and challenging.
  • Ability to lead, manage and inspire.
  • Strong ideas with a portfolio to match.
  • Self motivated and a team player.
  • Loves discipline of identity and branding.
  • Excellent working knowledge of Adobe Suite: Photoshop, Illustrator, InDesign, Acrobat

Senior Brand Manager - Books

We’re looking for an exceptional product / brand manager to join our team and look after the ongoing growth of our book portfolio across territories, formats and licensing opportunities. This important role includes taking stewardship of the growth roadmap for our flagship title Lost My Name.

This role is similar to a licensing manager position within a publishing firm but with two vital differences.

The first difference is that you’ll be working within a very agile, vertically integrated business that currently does all it’s own retail, marketing, manufacturing and product design with a sales footprint in every major market in the world.

This means that if you have a plan to achieve growth through change to any of these functions you can make that change happen within days or weeks, not the usual timescales of months or years.

The second difference is that all the brands and products you will manage use personalisation and technology in creative ways to tell their stories. This means that you can have a one to one relationship with customers through the products you market to them - but it also means you face interesting challenges in doing traditional licensing deals.

If these opportunities and challenges excite you, and if you have a track record in building entertainment brands, particularly in the kids and families space, we’d love to hear from you.

Key responsibilities and targets

  • Drive incremental revenue growth in our book range
  • Key stakeholder in setting and driving overall unit targets across territories
  • Own the internationalisation roadmap for all our books
  • Own the format roadmap for all our books
  • Own the individual brand roadmaps for our most successful books, including developing new upsell and retention products via in house design or licensing
  • Line manage several junior delivery colleagues within the product team

Expected experience and skills

  • Business focused and experienced - You have a demonstrable track record growing revenue on entertainment oriented properties. We’d like to meet people who’ve managed and grown products and brands turning over more than £10M a year.
  • Analytical and data driven - you can show us through examples of how you’ve used quantitative and qualitative data to make the right decisions for the business.
  • Creatively sympathetic - you can also show us examples of how you’ve reasoned out plans and projects from a creative position and protected and enhanced creative value in the properties you’ve managed.
  • Strong communicator and leader - you know how to make change happen in a fast moving company and you’ve got experience of directly line managing more junior colleagues.
  • Gets stuff done - above all, we want someone who is going to roll up their sleeves and get stuck into the fantastic challenge of bringing the values of our books to as many people as possible across the world. Lost My Name is a young company that is just getting started on it's journey - You’ll be super excited to join in and start shipping from day one.
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