[MUSIC PLAYING]
Hi, my name is Ed Rex, and I founded Jukedeck.
At Jukedeck, we've built software
that writes original music at the touch of a button.
What that means is, you can use this
to create unique music for your videos.
And if you want to hear what it sounds like,
it's actually providing the music for this video right now.
We've raised a couple of rounds of investment.
And I'd just like to share with you a few tips we've picked up
along the way on how to raise money.
So I think there are four questions
you need to ask yourself when you're raising money--
when to raise; who to raise from; how to approach them;
and what they want to see.
So the first question to ask is when to raise money.
And I think it's different if you're at seed stage
or if you're a bit later in your journey.
At seed stage, you don't even want
to think about raising money until you've
proved your idea has legs.
And that's for two reasons.
Firstly, investors just aren't going
to listen to you until you do.
And secondly, and more importantly, you're
wasting your own time if you're raising money
for something you don't know works.
So for us, what that meant was we
spent quite a lot of time building software
before we actually went to investors in the first place.
By the time we went to them, we had a prototype that worked.
And we had something really good to show them.
And that really helped us raise money.
So it's a bit different if you're
raising money at a later stage.
What we've found is that you really
need to start raising money before you need it.
Because if you wait until you need it,
you're not going to get a good deal.
You're going to be desperate when you go and speak
to investors, and that's not a good position to be in.
The other thing we found is that you really have to start early.
It takes a surprising amount of time to raise investment.
It took us six to nine months.
And you really need to plan in advance
and start work on it in advance, because otherwise,
if you start three months before you run out of money,
you're going to be in lot of trouble.
The next question to ask is who you should raise money from.
You might be tempted to spread a lot of paint,
to get in touch with as many people as you can.
But actually, what you really need
is investors who are interested in what you're doing.
If you're a music company like us
and you go to someone who only invests in social media,
you're wasting everyone's time.
Now, we actually got very lucky in that one of the first people
we talked to, a lovely guy named Mike,
had worked on generative music-- which
is what we're doing-- before.
So he knew how hard what we're doing is.
And he gave our stuff a listen and said,
you're doing it quite well, actually.
So maybe we'll invest.
But you don't want them to be too interested.
If you go to an investor who's invested in something a bit
like you before, they either are going
to be put off because that thing didn't work,
or that thing will still be going,
and you'll essentially be its competition.
If you go to that kind of person,
again, you're wasting time.
So you need to find the balance.
You need to find someone who's interested in what you're
doing, but not so interested that they've
been through it before.
So once you figure out who to approach,
you need to think about how to approach them.
Now, I got this very wrong the first time around.
I sent out a lot of emails to a lot of people.
And not many of them got back to me,
presumably because-- I hope-- they
have much more important things to do
than replying to every email they get.
Instead, what I found is the best way to get
these people's attention is to cultivate relationships
with them.
You know, if these people are going
to be investing money in your startup,
they really want to know you.
They are going to want to invest in people they know,
in people they've talked to a lot, in people they like.
And what it comes down to ultimately
is, it's all about personal relationships.
You need to go to as many events as you can.
You need to talk to as many people as you can.
You need to put yourself out there, so that you meet,
eventually, the right people.
The first people you meet won't necessarily
be the people who invest.
But ultimately, if you get out there enough,
you'll find the people who are right for you.
Now, forging personal relationships
can be tricky, especially for the kind
of people who run startups.
I think one thing that really helps is personal intros.
If you get someone you know to intro you to an investor,
they're always going to listen much more than if you just
go up to them and chat to them at a conference.
Any sort of intro you can get from anyone
who knows them is a really, really valuable thing.
It's sort of annoying that you have to do this.
You want your idea to be judged purely on its merits.
But ultimately, that's not the way the world works.
And you have to get people to vouch for you.
And the fourth and final question
to ask yourself is what an investor is going
to want to see when you do go and chat to them.
There are a couple of things to think about here.
The first is quite an obvious point, which is traction.
Investors are really going to want
to see that people using your product.
Investors are going to want to see
that your product is being used.
Otherwise, they're not going to invest in it.
But what's interesting, I've found,
is that traction doesn't mean you
have to have thousands, millions of people using your product.
A great definition of traction that I
got from a good friend who worked at Index
is that traction is irrational usage.
Even if you only have five people using your product,
if you can show that they're coming back to it all the time
and they absolutely love it, you've
got something really exciting on your hands.
An investor doesn't need to see huge, huge metrics.
They just need to see retention, because then you
can go back to them and say, you see this.
We've made it work.
Now we need to scale it.
That's why we need your money.
The other thing we found really useful
is taking a prototype to investors.
If you turn up and all you have is an idea,
it can be really hard to convince them
of the benefits of what you're doing.
But if you have something to show them,
if you can put something in their hands
that they can play with, that's a really powerful way
of demonstrating exactly what you're doing.
And you're much more likely to really grab their attention.
So I remember, in our first investment meeting,
we took along our prototype.
And the real moment of excitement
came when we had it up on the big screen.
We pressed go, and it wrote an original piece of music
right there.
That was the moment in which are investors
said, OK, maybe there's something here.
So there you go-- four questions I think you should ask yourself
when you're trying to raise investment.
When should you raise?
Who should you raise it from?
How should you approach them?
And what do they want to see?