Have you ever wondered what it takes to successfully raise funds for a startup? In this thought-provoking episode of The Angel Next Door Podcast, host Marcia Dawood sits down with Colin Gardiner, an operator in residence at Techstars and a seasoned investor with a track record of raising over $200 million. Colin shares his journey into the world of angel investing, starting with his parents' entrepreneurial background and their experience raising capital for their business. Throughout the episode, he offers valuable insights and lessons learned from his own fundraising experiences, emphasizing the importance of storytelling, communication, and strategic forecasting for founders seeking investment. Colin highlights the importance of setting up a strong foundation for fundraising, from anchoring valuation to building relationships and consistently updating investors. Colin also emphasizes the value of storytelling and how it can make a significant impact on securing investment. Listeners will gain valuable insights on strategic forecasting, under-promising and overdelivering, and effectively communicating a company's progress to investors. Ultimately, this episode serves as a comprehensive guide for anyone interested in the intricacies of successful fundraising in the startup world.
Have you ever wondered what it takes to successfully raise funds for a startup? In this thought-provoking episode of The Angel Next Door Podcast, host Marcia Dawood sits down with Colin Gardiner, an operator in residence at Techstars and a seasoned investor with a track record of raising over $200 million. Colin shares his journey into the world of angel investing, starting with his parents' entrepreneurial background and their experience raising capital for their business. Throughout the episode, he offers valuable insights and lessons learned from his own fundraising experiences, emphasizing the importance of storytelling, communication, and strategic forecasting for founders seeking investment.
Colin highlights the importance of setting up a strong foundation for fundraising, from anchoring valuation to building relationships and consistently updating investors. Colin also emphasizes the value of storytelling and how it can make a significant impact on securing investment. Listeners will gain valuable insights on strategic forecasting, under-promising and overdelivering, and effectively communicating a company's progress to investors. Ultimately, this episode serves as a comprehensive guide for anyone interested in the intricacies of successful fundraising in the startup world.
To get the latest from Colin Gardiner, you can follow him below!
LinkedIn - https://www.linkedin.com/in/colingardiner/
Colin's podcast :Wannabe Angels" - https://wannabeangels.com/
Marcia's episode on Wannabe Angels - https://wannabeangels.com/p/importance-of-investing-in-diverse#details
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Marcia Dawood
Well, Colin, welcome to the show.
Colin Gardiner
Yeah, thanks for having me. I'm excited to be here.
Marcia Dawood
Yeah, I'm excited to hear all about your journey and how you are now an operator in residence at Techstars, all the things that you've done, raising over $200 million at various places. So why don't we get started. Colin, tell us how you even learned about what angel investing is.
Colin Gardiner
Yeah, it's a great question. I think a lot of people think the natural spot to start with the story know, working in tech and something along those lines. But as I was thinking about it, it really all started with my parents, who were entrepreneurs in and of themselves. They started a commercial fishing company, we're from Alaska, that was one of the first companies to focus on delivering fresh seafood to grocery stores, whether it was just like fresh raw salmon or smoked salmon, things like that. And it was always inculcated in me that they got the company together by raising money from friends and family and having those people as shareholders in the business. So for me, that was, like my first we didn't call it angel investing, but that was kind of my first experience with how companies get up and going with capital and then through my time in tech for the past 1015 years. I think my first experience with angel investors, I kind of knew of it and people that did it, but it was really like looking at my first cap table and being like, who are these random people on this cap table? These aren't fun names. And then getting explained to me there's angel investors. They were very early supporters of the company. And so that got me interested and piqued my interest. And then from that point on, I was seeking out, but also as I met founders, trying to do what I could to help them raise, but also investing where I could. And so for the last part of ten years, been doing angel investing with a lot more of it happening in the past year, a lot more density.
Marcia Dawood
And how much time was spent when you were raising or how much time span did when you were raising the 200 million. It was with various companies, and I.
Colin Gardiner
Think yeah, go ahead. So I was at Outdoorsy for about five years, which was a preponderance of that, that I got to help raise and then previous companies tripping.com. And so in all those cases, I got to be at the table with fundraising. My expertise is around data modeling and kind of storytelling when it comes to pitching. It's like, one of my strengths. And so I was always kind of critically involved in that, the diligence process. And yeah, so that was let's call it eight years somewhere. Five to eight years of time for that fundraising.
Marcia Dawood
Tell us about some of the lessons that you learned.
Colin Gardiner
Oh, man, I think I made every mistake and learned everything humanly possible, which is great because now I try to help people every day. And by people, I mean founders pitch better and visualize their businesses better. But I think the thing I learned a lot of interesting things about the fundraising process. One, it is very much about storytelling. The other parts of it that I think are really interesting are really around how you set things up. So, for example, I think a lot of founders tell the story, but they don't really think about how they even anchor valuation or something like that. And so I think a lot of the advice I give people is start forecasting your business and under promise and over deliver and set a track record of always beating your numbers right. And I think what that gives you over time is that if you can show that investor updates and over time is that you have a track record of beating your forecast, which means you can then be relied upon to give people a forecast of the future on your next fundraising round. Like, let's say you're raising an end of Q One in March and you want to get credit for the full year of the coming year and get that as your valuation set point. You can point back to your forecasting and be like, hey, look, I've always beat my numbers and I know how to accurately forecast the business. And then people will give you credit forward, hopefully, but a much more credible point of view for doing that. So I think there's a lot of things around that that are kind of the earlier you can architect some of these feelings and thoughts about the business such that other investors also talk about how you always beat your numbers or how you're reliable. Things like that can really be helpful. I think people mostly just get to fundraising and they're like, I need to get money now. And they haven't really thought through the process, they haven't built relationships with people. So those are the big things that I would say I've learned from all of it. There's lots of micro lessons in all of it too. One of the things that I find to be very true is that if people want to invest, they're pretty clear about investing, and that if they're kind of jerking you around in any way or not moving very quickly, they probably don't want to invest, right, or they don't want to invest at your terms. And so just to be very clear about that and be able to move on quickly, I think is like a key part for founders.
Marcia Dawood
And all of you know, Colin, you made such a good point there about just the communication, the storytelling, like keeping people up to date. I've seen founders where, as you know, they get all wrapped up in I need money, I need money. And then they go and try to raise money, but they haven't built the relationships. They haven't been keeping people up to date. One of the best examples I saw, and this company was a little bit farther along, so the CEO had some experience under his belt, but he would send an email every month. And I think what he did, I'm sure he had to do this in order to not be crazy by the end of the month. But literally, I think every day he would put just a little note to himself about what happened during the day or during the week. And then at the end of the month, he would send that update to not just the investors in the company, but he was sending it to potential investors, friends of the company. It wasn't detailed financials or anything like that, but it was milestones that they were hitting and the things that he planned to do in the next month. And I think people saw that as like, hey, this guy's really going somewhere, only because they were hearing about him more than necessarily somebody else who was also probably going somewhere, but they weren't hearing and getting all that communication. And I think that can be so valuable. And I like what you said about showing people kind of where you want to be and then getting there and making sure that you can accurately forecast what's going on with your business. It gives people so much more confidence.
Colin Gardiner
Yeah, I think the whole investor update piece of this is like another lesson I learned in all of this is that consistent investor updating. And I think it's less about how often you do it, like weekly, monthly, quarterly, yearly. As you get later stage quarterly makes a lot more sense. Earlier stage monthly makes sense too, but I think it's just about the consistency of it. And using that as a way to architect your story into fundraising is really important because they're living proof of where the business was. And I think on the flip side, if I'm doing diligence on a company, I always ask for the investor updates, at least the past three, six, whatever you can get to essentially be able to kind of look and see how the business was going in a more candid way. But overall, there's so many tools at your advantage as a founder to kind of lay the evidence of why your business is fundable. And I just don't think a lot of people leverage it really intelligently.
Marcia Dawood
Totally. Now, we were just talking about lessons for the founders, but what do you wish angel knew while you were in the process of this fundraise? What did you learn from that?
Colin Gardiner
Yeah, that's a good question. I think a lot of the angels I work with on a day to day basis are more like previous operators. So I feel like they have a lot of empathy in all this. But I do feel like that empathy wanes really quickly. And I have the luxury of getting to work with founders every day. That's what I do for my day jobs, I'm advising, consult Marketplaces on growth, monetization, analytics, strategy and fundraising. That's kind of my wheelhouse. And so I get to be on their side again almost daily and remember how hard it is, just fundamentally how hard building a business is. And I just see the other side of it of angel investors or even investors in general are like my DMs are exploding with really low quality things and there's like a few diamonds in the rough. And so when you kind of view it that way, you're always looking for the best things, right, and not really viewing it from the founder side where everything is always a work in progress and it's a struggle every day. And I think the really good angel investors and VCs in general never forget what it was like to build a business. And I think Ben Horowitz, he had the rule at Andreessen or has it probably where every minute you're late to a meeting, I think it's a dollar. And I think that is like a really good way of inculcating of how important founders time, right, and how little of it they have that resource. And so I just try to remind angels I work with that this person has everything on the line. And just because they may seem desperate or they really are trying to argue and be passionate for what they're doing, doesn't mean they're not a good investment or things like that. I think that's like a really important piece of it anyway. That is just long way winded of saying that. The longer you go without being on the other side of it, I think the easier it is to forget how hard it is and to lose empathy. And that empathy is really important to finding good deals and great founders because they don't all look exactly the same.
Marcia Dawood
I completely agree with that. And it is really hard to grow these businesses and there's so many ups and downs and pivots and changes and all types of things that happen. So what led you to Techstars?
Colin Gardiner
Yeah, my most recent gig was as a full time employee was at Outdoorsy Warehouse for five years, chief Product officer originally and then chief Revenue officer for a number of years for our listeners, what Outdoorsy does. Yeah, so it's just like Airbnb but for RVs and it's done 2 billion plus in GMV. So ostensibly a huge success and a really cool business. It's just fun to put people on the road. Right? And so I left there in March of last year and I had some more time on my hands. And so I live in Austin, but we're relatively new in the sense that we've been here for five years and so one of my old coworkers suggested I start mentoring techstars. They do twelve companies per cohort. And I just loved it. It was just super fun. And so I had done three cohorts, I think just for pro bono, just helping companies out because it just got me going. And I think maybe I was doing a good enough job. That Amos, the guy that runs it, the MD here in Austin offered me a position as an OIR operator in residence. They have three of them every session, and kind of the rest is history. And so I get the fun job for part time of working with four of the twelve companies to help them, kind of help steward them through the program. And that's working on product market fit, building a model, fundraising narrative, storytelling, all of it, and all the squigglyness in between. And so it's super fun and rewarding. And the two other OIRS I get to work with, they also just love it. They get energy out of working with the companies and helping them. And so, yeah, it's super fun. I'm really enjoying it.
Marcia Dawood
So the operators in residence, there's three of you. You're kind of like the techstars employees, sort of. And then you have mentors that kind of help the cohort, but you're really the one who's shepherding them through the program. Is that right?
Colin Gardiner
Yeah. So I think the basic structure, kind of the easiest way to think about it is there's the MD and kind of investment management operations team that does all of the hard work of picking the companies, getting them to town, all of the pieces and curriculum, scheduling, all the pieces of the accelerator. Right. And then the OIRS are people with lots of experience building startups. And so what we do is we basically help those companies digest the material, put it into practice and answer questions, be a little bit of a therapist at times and help them go through the program well, right. Like be successful and fully leverage everything they're doing, but also be an extension of the actual team who's very focused on making sure all the trains run on time and kind of being their eyes and ears on the ground of how companies are doing what they're implementing and all of those things.
Marcia Dawood
So what led you to start Wannabe Angels podcast?
Colin Gardiner
Yeah, I think it's funny. Harry and I met online, basically. I think one of us reached out and said, hey, you seem cool. And Harry's the rideshare guy, that's his spiel. And so I've been in marketplaces for a long time. RVs were auto, essentially ride sharing. And so we just kind of had some kindred spirit around those things and started talking about angel investing. He sent me some deals, I sent him some, we co invested on a few. And just talking about it, we became friends. And in all of it we were like, man, we don't know anything about angel investing and how does anyone learn about all these things other than the two of us texting and just sharing our war stories? And that was really the impetus for all of it, was like, hey, what if we just interviewed people that knew what they were doing? Or at least that we thought they knew what they were doing and got to learn from them. So people like yourself, we get, I think, the luxury and opportunity of having a reason to talk to them. And so I think a lot of the guests that we end up talking to have been longtime angel investors, done massively well, invested across all kinds of things, have gone on to make their own funds. It's just been super fun just to talk to that swath of people and learn from them because I think everyone's got a different take. They all have similar but different lessons that they learned out of it. But overall, it's been great for us because I think we keep learning from it. And like I said, I think what is an angel investor? And everyone's along a spectrum on it, and there's really no centralized information around it. There are more and more, I think, communities, groups around teaching people how to angel invest, which is great, but up until, I'd say, the past year, there haven't really been that many. And so that's what we were reflecting is like, can we just create content for people about angel investing? Learning from some of the best out there, that was the gist.
Marcia Dawood
And that is so needed because we really just to your point, angel investing can be so many things. It doesn't have a one size fits all for people. And I'm super passionate about wanting to tell people about it, have them learn about it, and imagine a world where everybody was doing some kind of angel investing, kind of like the way that some people give to charity. So I think it could be there's so much more that we could do if more people knew about it and didn't think it was super scary and only for rich people.
Colin Gardiner
Yeah, I think that was a key insight that I had over the years, was I started with much larger check sizes than I write on average today. And part of that was culture change. I think angel list maybe was around, but it was more of the job website than it was the syndicate website when I first started. And now that that's become really prevalent and you can write $1,000 check, I think it just really opens up the window. I think the overton window, it's really around policy, but the overton window for angel investing is kind of now, right? Technology acceptance. I think on our podcast, we talked a little bit about kind of the legislative side, what's happening there. There's a lot happening right now that is kind of this perfect storm and opportunity for opening it up to the broader market crowdfunding, whatever it may be. So, yeah, no, it's exciting. I'm excited for it. And my little part of that has been doing my own syndicate, Yonder Ventures. Go to Yonder BC to see, you know, kind of getting to invest in marketplaces that I get to work with and really care about and really bring in more investors to the cap table. And so one of the things it's been nice is that I have a large network of marketplace founders that I know operators, and they're not all extremely wealthy, but they all really care deeply about those businesses and want to help and be invested in them. And so being able to invest as little as $1,000 really opens up opportunity both for the companies to get access to great people, but also for these people to put money into things that they know well and believe in. So I don't know, that's my little part of it. And I get so excited every time an LP puts any money into a business, and I get to tell a founder that we're helping them build their vision. That gets me out of bed every morning.
Marcia Dawood
Isn't that the best? I know sometimes people ask me, what do you tell people at cocktail parties that you do? I tell them I make founders dreams come true.
Colin Gardiner
Yeah. I think one of our first guests on One of the Angels was Jack Greco, and he's very prolific investor, also in marketplace aficionado. But I think he said something that really struck me was if you can put 100K into a company, you can basically have the money to hire someone for them to change their business. And I don't know, for whatever reason, I always have that in the back of my head, right. That this money allows this company to get some resource that can be an inflection point for that business. And so, I don't know, I just love that. And I think about that often as I go to market to help people fundraise. Like, how do we do that? How do we get you, your people that ten X your business.
Marcia Dawood
Exactly. So before we go, tell us about you don't have to pick your favorite because you can never pick a favorite, right. But tell us about maybe a recent company that you've invested in and what they do.
Colin Gardiner
There's quite a few. I do love them all. I think maybe I can tell you more about, as I've been investing more, what good looks like, what's a really compelling investment, and then I'll tell you about one. I like a lot of companies, you talk about traction and what that means. And so there's been a few companies I've invested in where it just hit me over the head what good traction is. It took them a while to get going, but once that kind of product market fit hit, they were growing just crazy multiples, like 500% in a month kind of thing. And so, as I've started to do more investing, in particular in marketplaces, it's really come back to me on how important distribution is in all of this and how these businesses won't grow if they don't have really good distribution methods or really unique ways of going to market. And so one of the ones I really enjoy what they've done is a company called Autopilot, and they're essentially a marketplace for copy trading bots. And realistically, longer term, what they're trying to do is be like a marketplace for custom ETFs that are self custody in your brokerage account. So for now, I can copy trade nancy Pelosi or Michael Burry or Citadel. And what they do is they follow all their public trades, whatever they're tweeting about, and they make essentially a portfolio that they trade for you in your Robinhood account. And one of the things I thought was just impressive about what they did is that their marketing strategy was building these essentially Twitter accounts around copy trading, right around Nancy Pelosi, Michael Burry. And so some of these accounts have hundreds of thousands, if not million followers. And there's these great marketing assets for them. And what I think is really important takeaway from some of these businesses is that however you can come up with this unique go to market strategy for distribution is really vitally important. And I've been looking more and more for businesses that have some kind of earned insight or unique way of doing that because I think those are the ones that are going to stand out in the long run.
Marcia Dawood
Yeah, that's super interesting. I didn't know people did that.
Colin Gardiner
Oh, man, you should check them out. Super cool business. I use the product myself and I met the founders over it's just it's one of those fun stories.
Marcia Dawood
That is a fun story. Well, Colin, thank you so much for being on the show and sharing your journey with us. And we will definitely put links to all of this in the show notes, including how they can listen to wannabe Angels.
Colin Gardiner
I appreciate it. I loved being on.
Marcia Dawood
All right, thanks.