This article summarizes key insights from a panel of experienced investors, Andy Budd (Seedcamp), Joseph Aziz (True Global), and Andy Ayim MBE (Angel Investing School), on navigating the fundraising journey. The discussion covers strategies for targeting the right investors, achieving product-market fit, and leveraging alternative funding sources, including corporate venture capital (CVC). Founders are advised to focus on why their team and timing are right, build strategic partnerships, and understand geographical and cultural differences in risk appetite. The panel emphasizes practical, actionable advice for founders to secure funding and build resilient businesses.

The recent investor panel, hosted by Hattie Willis, and featuring Andy Budd (venture partner at Seedcamp), Joseph Aziz (from True Global), and Andy Ayim MBE (founder of the Angel Investing School), offered a wealth of practical advice during a recent Cyber Runway: Scale session provided by the Department for Science, Innovation & Technology and managed by Plexal, where I attended on behalf of Cyber Tzar, the Enterprise Supply Chain Risk Management platform.

Covering topics from pre-seed to Series A, differences across geographies, and corporate venture capital (CVC) dynamics, the discussion provided valuable insights for founders aiming to secure investment.

Contents

Investor Panel with Hattie Willis, Andy Budd, Joseph Aziz, and Andy Ayim MBE

This video is publicly available on the Plexal YouTube playlist for the Cyber Runway programme.

Key Insights and Recommendations

1. Fundraising Strategies

Target the Right Investors

• Develop an Ideal Investor Profile (IIP) tailored to your business stage and sector. Consider not only the fund but the individuals within it. Research who has championed similar startups and has a genuine interest in your market.
• Andy Budd highlighted how investors within a fund may have specific interests and expertise. Finding the right “champion” can be critical to getting traction within the investment committee.

Timing and Geography

• While the US market often offers higher valuations, Andy Ayim warned that the bar for traction is significantly higher. To succeed, founders must establish a local presence, navigate complex state-specific regulations, and show a credible business case for scaling in the US.
• Andy Budd suggested starting locally where valuations are more realistic, achieving product-market fit first before expanding to larger, more competitive markets like the US.

Risk Appetite and Economic Context

• Andy Ayim emphasized how rising interest rates and economic conditions have heightened expectations for early traction and revenue. Investors, particularly in the US, are now more risk-averse, even at early stages.

2. Product-Market Fit

Recognizing Product-Market Fit

• Andy Budd likened product-market fit to “knowing if you’re in love” — founders often “feel it” when the product resonates strongly with users. Indicators include consistent growth, high retention, increasing engagement, and virality.
• Joseph Aziz added that understanding the severity of the problem you’re solving is critical. Ask yourself: How painful is this problem for my customers? Would they miss your product if it were gone?

Why Now and Why You

• Investors evaluate not just the product but also the timing and the founding team’s ability to execute. Founders must clearly articulate why their team is uniquely positioned to solve this problem at this moment in time.

3. Alternative Approaches to Capital

Revenue Over Equity

• Andy Ayim recommended focusing on building relationships with “super connectors” who can introduce high-value customers or clients. A £250k annual client contract can often be more valuable than raising £250k and giving away equity.

Leverage Strategic Partnerships

• Look for partnerships that generate early revenue and market validation. This not only reduces reliance on external funding but also strengthens your position when negotiating with investors.

4. Corporate Venture Capital (CVC)

Opportunities

CVCs can offer invaluable industry insights, access to networks, and faster market validation. For example, Joseph Aziz shared how True Global’s corporate partnerships provide startups with direct access to retail giants like Marks & Spencer and Walmart.

Challenges

• CVCs are not always aligned with procurement teams, which can limit their ability to deliver on commercial opportunities. Andy Budd stressed the importance of understanding the CVC’s reputation and track record. A poorly regarded CVC can deter other investors and limit your exit opportunities.
• Founders should also evaluate whether a CVC’s involvement might limit strategic flexibility or deter other corporate buyers.

Due Diligence on CVCs

• Examine the CVC’s history of follow-on investments and their alignment with the parent organisation’s strategic goals. Avoid CVCs that act as vanity projects rather than delivering meaningful support.

5. Cultural and Geographical Differences

Failure as a Badge of Honour

• In the US, failure is viewed as part of the entrepreneurial journey, while in the UK, it often carries stigma. Andy Ayim encouraged UK founders to adopt a US-style resilience, treating setbacks as learning experiences rather than obstacles to fundraising.

Valuation Dynamics

• Andy Budd noted that inflated US valuations can be a double-edged sword. While higher valuations offer more capital, they also set tougher expectations for future rounds. Founders must be prepared to meet these challenges or risk stalling.

Practical Tips for Founders

Pitching Advice

• Focus your pitch on why now and why you. Investors often see the same ideas repeatedly. What sets your team apart? What makes this the right moment for your product? These questions are just as critical as demonstrating traction.
• Andy Budd’s advice: “If you’re asking whether you’ve reached product-market fit, you probably haven’t.” Retention, growth, and user enthusiasm are the best indicators.

Soft Launching in New Markets

• Joseph Aziz shared a case where a UK startup successfully raised funding in the US by first soft-launching their product and building relationships with local investors and clients. Founders should validate their product’s fit in new geographies before committing to full expansion.

Building Relationships

• Angel investors can act as a “board you can’t afford,” providing strategic advice, introductions, and support. Andy Ayim emphasized the value of nurturing relationships with angels who can fill gaps in your team and open doors to transformative opportunities.

Conclusion

This panel offered founders a wealth of actionable strategies for navigating the fundraising process. From crafting targeted investor profiles to leveraging alternative capital sources, the insights shared can help startups build stronger, more resilient businesses.

By understanding the nuances of different markets, focusing on product-market fit, and thoughtfully engaging with investors, founders can better position themselves for success in competitive fundraising landscapes.