When it comes to fundraising, Stephanie Leffler has heaps of experience. She shares lots of tips and information with us that any female entrepreneur, whether seeking investment or not, would find helpful. And on top of it all she seems to have navigated the investment waters with a bold and brazen attitude!
Where did your organizations funding come from? How did you obtain investors for your venture?
Our seed funding was supplied by me and my business partner. We sold our first startup and had funds available to invest into this new venture. That got us through the first few years. We then raised a Series A round from Highland Capital, a venture firm based in Boston and Silicon Valley. Finally, we raised a Series B round led by Lewis and Clark Ventures in St. Louis, along with participation from Highland Capital.
Seeking funding can be intimidating. Tell us how you felt about it. Was it a scary process for you? Or were you confident? Why?
When you outline an idea that you are passionate about, you feel exposed. There is always a risk that they won’t like it. The reality is that you might go and see ten potential investors and nine of them might not like your idea at all, but all you need is one. The key is to go in with complete confidence and stand behind your idea. Do not come at it with weakness or fear. Put your knowledge on display. Teach the investors something and you’ll gain an advantage. I believe that just about any idea can be sold with the right amount of confidence.
Teach the investors something and you’ll gain an advantage. I believe that just about any idea can be sold with the right amount of confidence.
What are some interesting or helpful things you learned about funding that you might not find in “Seeking Investment for Dummies?”
One of the best pieces of advice that I can give would be to hire a great, well-connected lawyer. You will need a lawyer to help you negotiate and manage the legal part of your round. Getting connected with the right lawyer can help create the network effect you need in order to get funding. It’s not a great position to be seeking funding. It’s much better for VC’s to hear about your company through the grapevine or from someone they trust, forcing them to reach out to you. If you start by hiring a well-connected lawyer, they can help you create buzz and generate interest. For me, that part of the process was relatively unexpected.
We know the importance of a pitch deck and a strong ask. What was your hook? How did you get investors to take the bait? Why was your pitch so compelling to them?
The most important hook is the size of the market and the value that can be created with your solution. Investors want to know that you can build a company big enough for them to get a return. Establishing that, not through gut instinct, but through actual data, is tremendously important. Investors see upwards of 50 pitches per month. Your pitch has to check all of their boxes: a solid market, a good go-to market strategy, and having an experienced team or a plan to bring on an experienced team. You have to be able to demonstrate that your technology works. Your pitch has to do all of these things, and above all else, it has to do so in the form of a story. People generally make decisions with emotion, and even though you’re dealing with very logical people in the investment world, if you’re not weaving together a clear and coherent story, it will fall flat.
Investors want to know that you can build a company big enough for them to get a return. Establishing that, not through gut instinct, but through actual data, is tremendously important. Investors see upwards of 50 pitches per month.
What went right when you were raising capital for your business? Did you get all that you asked for? What went wrong?
What went right:
Both of our funding rounds. We got what we asked for. The key to doing so is having multiple parties at the table. You need to have more than one firm who is interested in investing because you can’t aggressively ask for what you want unless you have more than one person interested.
What went wrong:
You have to hold a lot of meetings in order to get a handful of people interested. In some cases, you’ll go into a meeting and the person sitting on the other side of the table has zero interest in what you are saying and they may not even want to be there in the first place. You just have to pick yourself up, walk out of that room, and ask yourself if there is anything you can carry forward into the next meeting to improve upon and move on. I experienced that more than once in the fundraising processes but I didn’t let it slow me down.
What advice would you give to a female founder seeking investment capital?
Number one: don’t contemplate gender when you’re thinking about raising capital. I don’t think there is anything that is gender specific when it comes to raising capital. Number two: show up early, be prepared, make sure your technology works, shake hands firmly, look the investor in the eye, have your shoulders back, have the body language of a winner and of a leader, and make no apologies for your pitch. Investors will likely ask questions that you don’t have an answer for, and you can absolutely say, ‘let me get back to you’, or ‘that’s a great question, we need to think through that’, and then come back to them with an answer. You have to be able to take those questions and not get rattled. Above all, know your numbers and be prepared to speak to the basics (how many customers are you going to acquire in year one, what revenue are you projecting, if it’s a SaaS product, what kind of churn are you projecting). Even if you are pre-revenue, you need to be able to answer those questions so you aren’t caught off guard.
Before OneSpace, you founded MonsterCommerce. What lessons did you bring to OneSpace from MonsterCommerce that have helped you succeed? Have you been able to avoid mistakes you made before? Have you been able to grow faster?
I’ve brought forward so many lessons learned from MonsterCommerce that it’s hard to choose the most important. The biggest lesson learned is that recurring revenue is a very helpful monetization strategy to help grow a successful company. The biggest mistake that comes to mind was underpricing our product. We were looking at the market in terms of what customers would pay instead of what value the product would create. We probably left money on the table with the way that we priced our product at MonsterCommerce.
While OneSpace did not start out as a recurring revenue business, we had a vision from day one to launch a software as a service product (SaaS) and build that revenue model, and we have now successfully done so. At OneSpace, we think about pricing in a much more value oriented way: what is the value we are driving for the customer and how much value is our platform creating? I feel much more comfortable with where we are from a pricing perspective at OneSpace versus MonsterCommerce.
At OneSpace, we think about pricing in a much more value oriented way: what is the value we are driving for the customer and how much value is our platform creating?
Can you explain a little bit about how OneSpace helps its customers and how you use the OneSpace methodology and process within your own company?
OneSpace is a platform that allows companies to scale quickly with on demand talent. We use our own platform in many places in the company, one example is within our sales team. We research companies and people within those companies who might want to buy the OneSpace platform. To execute that research, you have to look at hundreds of companies a day, which would take our team a great deal of time to complete. To save our team time, we built a workflow on our platform that leverages freelancers to find all of the information we need to make better decisions about whether or not a customer is a potential target. That has been a major advantage for us.
As our name implies, we encourage women to be brazen and bold! Tell us about a moment you were brazen in your business. When did you do something bold? Were you excited or scared? What was the outcome?
I have done a lot of things that I feel are brazen or bold, and in almost every case, I have been a little bit nervous. There are two particularly “brazen” moments that I feel are applicable to any entrepreneur: the feeling you get when you are asking a customer to sign a big contract, and needing to let somebody go who has been important on your company’s journey.
I once heard a mentor of mine say, “If you don’t feel uncomfortable asking, your price is probably not high enough”. That is definitely one area where everyone should challenge themselves to step outside of their comfort zone.
Every once in a while there is somebody in the company that needs to move on, and you know it would be best for them and best for the company. There is never going to be a good time to do it, but the key point is you have to be brazen. You have to take some risk and go out on a limb that your gut instinct is correct. It is a scary thing, but you have to do what your gut tells you. I’ve never regretted doing so.
You can Follow Stephanie and OneSpace on Instagram and Twitter at @onespace_com, Facebook at OneSpace.com, and check out their website at onespace.com
Stephanie Leffler is the CEO of OneSpace, an all-in-one workflow automation platform that brings businesses in need of flexible, on-demand talent together with freelancers seeking assignments that match their skill sets. We’ve helped companies like Staples, Overstock, and Instacart rapidly scale their operations by giving them instant access to talent where and when they needed it most.
Prior to OneSpace, Stephanie Leffler founded MonsterCommerce, an ecommerce platform that grew to serve over 8,000 small businesses. MonsterCommerce processed more than $3 billion dollars in annual sales and posted annual revenue exceeding $20 million in the year prior to being acquired.
MonsterCommerce was voted an SIIA Codie Award finalist for Best E-Commerce Software, recognized as the Fastest Growing Private Company in St. Louis by St. Louis Business Journal and chosen as one of St. Louis’ Top 50 Businesses by STL Commerce Magazine.
Leffler has been recognized by Ernst & Young as an Entrepreneur Of The Year Finalist, by the Stevie Awards as a Best Young Entrepreneur Finalist, and by the St. Louis Business Journal as a “30 Under 30” and “40 Under 40” honoree.
Leffler mentors entrepreneurs through the Pipeline for Entrepreneurship organization and serves as a guest lecturer at Washington University’s Olin School of Business and at St. Louis University’s John Cook School of Management.