How Spoon University Navigated the Tricky Process of Raising Money as an Early Stage Startup
Diverging slightly from the popular startup narrative, Mackenzie Barth and her co-founder Sarah Adler aren't college dropouts. Instead, they managed to start Spoon University, a food blog featuring student contributions, while at Northwestern University and still graduate. The business began when the pair asked each other, half kiddingly, what it would take to start a magazine. The rest is history.
Since then, Spoon University has grown from an idea to a movement spawning 100 college campuses. Today, it has a network of 3,000 contributors who provide articles, images, gifs and videos focused on food.
Goofy, informative, serious funny and smart Spoon University is building a different kind of food network -- for millennials, by millennials.
Read the interview below with Spoon University’s chief executive Mackenzie Barth to learn about the company’s journey from dorm room idea to VC-backed business.
1. What is Spoon University, in 140 characters?
Spoon University is a food media company for the next generation, powered by a network of chapters on college campuses across the country.
2. Who gave you your very first check? What was that experience like?
Our parents gave us our very first check when we did our initial family and friends round. It was empowering because it was the first time we felt truly validated -- they suddenly weren’t just giving us verbal encouragement and support anymore, they were actually risking their money on us. It was also a good kick in the ass because we really, really didn’t want to lose their money, so we buckled down and thought about how we were going to make this a sustainable business.
3. What was your recent round of fundraising, how much did you raise and who were your investors?
We recently raised a $2 million seed round. SoftTech Ventures led the round and we also took investment from Lerer Hippeau Ventures, Box Group, Joanne Wilson, BBG Ventures, VaynerRSE and some others.
4. How did you go about getting investor introductions?
We tried raising money last fall and met a lot of investors by leveraging our existing relationships and asking for intros, and more intros and so on. Even though they chose not to invest back then, we followed up with them on the recent round and when they were intrigued, they were eager to introduce us to their investor friends. Techstars was also hugely helpful with intros for this round. It’s important to only get intros from people that are excited about your business and can vouch for you.
5. What was the hardest and the most unexpected part about fundraising?
The hardest part was trying to navigate the timeline. I wanted to move quickly to build momentum, but also needed to patient to give people time to do due diligence and talk to each other and build buzz over time. I was anxious to finish fundraising so I could get back to the real work, so it was hard for me to slow down.
6. What was the dynamic of the round like? What was the difference between early and late commits?
It was slow getting yes’s in the beginning, and that can be pretty discouraging. But once we got a couple yes’s and I felt more confident in meetings, the next few conversations went well and we started to get more people to commit. Because our lead investor came in pretty late, we had to downsize some earlier commitment’ investments to make room, which was really tough from a relationship standpoint. People weren’t happy about it, so I had to be careful in how I explained everything to maintain good relationships but also do the best for the company. In the end, there wasn’t enough room to take everyone’s investment, which I know is a good problem to have, but it didn’t feel good to have to say no to people.
7. What mistakes have you made in retrospect? What would you do differently?
We luckily didn’t make any big mistakes. The process, although stressful, went pretty smoothly, so I’m not sure what I would do differently. I was lucky to have a bunch of great mentors to ask questions and help guide me along the way. That was huge.
8. What is your advice to founders like yourself who are trying to raise financing?
I’d advise founders to be patient, remain confident and surround yourself with people who have raised money before, so they can help you navigate this crazy process.
9. What are your top 3 do’s and top 3 dont’s on fundraising?
Do have a one pager that you can send around to prep people for your meetings.
Do build momentum.
Do what feels right to you – you’ll get a lot of conflicting advice so it’s important to go through the process in a way that feels genuine and true to yourself.
Don’t send your pitch deck to everyone before you meet them – you want to be in control of the deck.
Don’t pitch investors too early – make sure your company is in the right place and you've practiced your pitch plenty of times.
Don't look desperate -- even if you really need the money, desperation is not a good look. Stay calm and collected, even if things aren't going so well.
Alex Iskold is the managing director of Techstars in New York City. Previously Iskold was founder/CEO of GetGlue (acquired by i.tv), founder/CEO of Information Laboratory (acquired by IBM) and chief architect at DataSynapse (acquired by TIBCO). An engineer by training, Iskold has deep passion and appreciation for startups, digital products and elegant code. He likes running, yoga, complex systems, Murakami books and red wine -- not necessarily in that order and not necessarily all together. He actively blogs about startups and venture capital at http://alexiskold.net.