Advice for early-stage founders
Alex Rose, Director of Founder Acquisition & Partnerships at Connectd, shares insights into the challenges and opportunities facing founders
What do you like most about working with startups?
I love absolutely every aspect of working with startups but the drive, tenacity and sheer passion that most founders possess is inspiring and drives me to help them reach their goals. I studied business, finance and economics at university but it wasn't until I joined Connectd that I understood what sets founders apart from the rest of the business world and it’s definitely their unwavering determination.
Being involved with pioneering founders who are driving innovation gives me the opportunity to stay abreast of the ever-evolving market trends and developments. I have a front-row seat to see people creating cutting-edge businesses which is a huge privilege.
I also really enjoy the freedom and flexibility that exists in the startup space and love collaborating with people who share my growth mindset.
You speak with founders every day. What are the main pain points that startups are currently experiencing?
One of the most prevalent challenges founders face is having limited access to high-quality and experienced individuals to help them on their growth journey. This can lead to them missing out on valuable commercial opportunities and the skills and knowledge that experienced advisors can contribute.
Founders are frequently time poor, under-resourced, juggling multiple responsibilities and wearing 'all the hats'. This can be a real source of frustration and can result in a lack of progress. Accessing support from the right individuals can be critical, whether that's advice and input from mentors or serial founders, or strategic support from an experienced portfolio professional.
I'd be lying if I said the main pain point wasn't access to capital; the treadmill of securing grants, loans and investment can be a really daunting proposition. But rather than rushing to raise seven-figure pre-seed rounds without generating any revenue, I feel a more pragmatic and measured approach can yield better results. Remember, slow and steady wins the race, and a balanced approach is key.
What do you see happening in the early-stage space over the next 12 months?
The outlook for the early-stage space is pretty fascinating, and as we work with founders, investors and advisors, we get to look holistically at the ecosystem, whilst also seeing how each side of the triangle will be impacted individually. Here are my predictions for the year ahead:
Founders
AI will be increasingly leveraged to tackle everyday business challenges but will also see intensified competition, making it more challenging for founders to secure investments and establish their market presence.
I predict a substantial increase in early-stage investments, particularly in the pre-seed space, due to the recent changes in SEIS/EIS rules, which make early-stage investment more appealing.
I’ve also noticed an increasing number of VCs and institutional investors expressing interest in impact-based ventures, aligning with the growing appetite among Gen Z founders for ethical investors and ethical investment opportunities.
Investors
The potential for further rises in interest rates may lead to more small-ticket investors opting to keep their funds in the bank. However, the changes in SEIS/EIS investment regulations could prompt investors to explore slightly earlier stage opportunities. This shift may also drive an increase in investment through Angel Syndicates and Venture Capital Trusts (VCTs). What’s more, considering that venture capital funds operate in funding cycles, we are nearing the end of most current cycles. I’d expect to see a surge in investment activities focused on high-growth, low-burn companies throughout 2024, as funds strive to deploy capital before the cycle ends.
NEDs and Board Advisors
With the economic and employment outlook as uncertain as it is, I expect to see more individuals seeking part-time advisory or NED roles. Similarly, demand for these individuals is likely to grow, given their significant value and benefit to early-stage founders, especially in challenging times.
What advice would you give to a founder who is right at the start of their journey?
At the beginning of your entrepreneurial journey, there are several key pieces of advice that can guide you toward success.
First and foremost, it’s essential to adopt an experimental mindset. While your initial ideas may be innovative and ground-breaking, it is crucial to recognize that market demand ultimately determines the success of your products or services. Be open to testing multiple ideas, products, or service variations, and closely monitoring the response from the market. Don't be afraid to iterate, pivot, and even "burn" customers if necessary. It's through this iterative process that you can discover product-market fit (PMF) and tailor your offerings to meet the needs and desires of your target audience. Remember, the market should dictate the direction of your products, rather than relying solely on your personal preferences or assumptions.
Understanding the importance of data in driving your startup's growth is critical. Founders should establish a robust data infrastructure and continuously monitor key metrics such as customer acquisition cost (CAC), monthly recurring revenue (MRR), annual recurring revenue (ARR) and many more. These metrics provide insights into your startup's performance, growth trajectory, and customer behaviour. By closely tracking and analysing these metrics, you can make data-driven decisions that shape the future roadmap of your company.
Additionally, leverage analytical tools and technologies to gather and interpret data effectively, ensuring you have a comprehensive understanding of your market, customer base, and overall business landscape.
Adopting this approach from the outset sets a precedent for a data-informed and customer-centric mindset that will guide your journey as you scale and grow.
Early-stage founders are notoriously time poor. What advice do you have for them to keep all the plates spinning?
The journey of an early-stage founder is undeniably demanding, with numerous responsibilities to juggle simultaneously. Your business is your livelihood, your passion, and it deserves your dedication. However, finding a balance between work and personal life is crucial for sustainable success.
Recognising the limitations of being a one-person show is essential. As a founder, you have to maximize every available resource and opportunity at your disposal. Networking becomes a potent tool in your arsenal. Seek out free resources, tap into paid subscriptions that offer value, and consider outsourcing tasks that can be delegated effectively.
Leveraging the expertise of Non-Executive Directors (NEDs), Board Advisors, and Mentors can help alleviate the burden, reduce the load and allow you to focus on the strategic aspects of your business. These individuals bring valuable insights, experience, and guidance. Networking can prove to be a catalyst for your future success by connecting you with like-minded individuals who can offer support, advice, and potential partnerships.
Remember that self-care is essential to maintaining your well-being and productivity. If all else fails and you find yourself overwhelmed, don't hesitate to take a step back and recharge. By prioritising self-care, you can rejuvenate your energy, creativity, and enthusiasm, allowing you to approach your work with a refreshed mindset and greater resilience.
In the challenging journey of an early-stage founder, it is crucial to strike a balance between unwavering commitment to your business and taking care of your personal well-being. By leveraging networking opportunities, seeking external support, and prioritising self-care, you can manage your workload effectively and keep the plates spinning without succumbing to burnout.
If you'd iike to speak to Alex to discuss your startup's growth, you can book a call here:
