When it comes to workplace productivity and communication apps, it can often feel like Slack, Trello and Asana have the market cornered.
But Aydin Mirzaee saw past the crowded space. In his previous work, Aydin often found himself wishing for a better feedback and productivity tool — and one that catered specifically to people managing a team. In 2017, he and his co-founders began working on Fellow, based in Ottawa.
“Account managers have Salesforce,” Aydin says. “We didn’t see the equivalent tool for managers of people, so we decided to build Fellow.”
The idea clearly resonated: in June, Fellow landed Shopify as one of its first customers and closed $6.5 million in seed funding. Aydin offered a lot of great tips for fundraising during our interview. Below, I’ve gathered four pieces of actionable feedback from this Canadian founder.
1. Dig the well before you’re thirsty
Before working on Fellow, Aydin had already started and sold his first software company, Fluidware. But there was one major difference between Aydin’s first startup and Fellow: Fluidware was entirely bootstrapped.
“Once we sold our first company, I knew that at some point there would be another one,” Aydin says. “So I had to build up my network from scratch, knowing that someday it was going to be useful.”
With the possibility of creating a venture-backed startup on the horizon, Aydin attended VC events and messaged venture firms, introducing himself and asking if they were open to meetings or if they were hosting any events in the near future.
It’s like that proverb: dig the well before you’re thirsty.
“Start now,” he says. “Go to VC-sponsored events, build up that network, and offer to advise companies in their portfolios.”
The key is to create those relationships and offer value long before you’re making any asks of them. Not only will VCs get to know you and value your expertise, but you’ll also get a sense of which partners you really enjoy spending time with — which is even more important in the long run.
2. Use the ‘caller ID test’
Inovia Capital led Fellow’s seed round. The company also got investments from Felicis Ventures, Garage Capital and several angels. How did Aydin choose his seed investors? He chose the partners who he aligned with best.
“It’s not the firm that matters,” Aydin says. “What really matters is who the partner is.”
And when it comes to picking a VC partner, Aydin recommends asking yourself a really simple question to figure out if you’re working with the right one: “Are you excited when your phone rings and you see that person’s name on the caller ID?”
If so, great. If you feel anxiety or dread, however, you may be better off with a different investor. For Aydin, choosing Inovia as a lead investor was a natural fit since he’d known Karamdeep Nijjar for nearly four years after they first met in the startup space (turns out there really is something to the ‘dig the well before you’re thirsty’ thing).
“I always had so much fun talking and working with Karam that it was just like, ‘Oh, this is just another excuse for me to talk to you all the time,’” Aydin says.
3. Zoom in on the details that matter most
One reason why fundraising is so challenging is because it can be hard to know where to put your focus.
“It’s very easy to get fixated on valuation,” Aydin says. “Uber’s first valuation on their first round was something like $4 million … that’s for a company that’s worth over $50 billion, trading today in the market. This stuff doesn’t really matter.” It’s far more important for a startup to focus on keeping its number of rounds down and negotiating its terms.
“My first approach to negotiating terms was, ‘Well, let me just go with what most people do,’” Aydin says. However, a friend and fellow investor quickly set him straight.
“He was like, ‘Are you kidding me? Negotiate on every single term,’” Aydin says. “Rather than going for the middle, I decided to shoot for the best on each and every term.”
For many first-time founders, it can be hard to know exactly what counts as the best outcome of a term negotiation. But that’s where connections come in handy.
“The best way to negotiate your terms is to talk to someone who has raised many rounds — especially those later rounds — and ask, ‘What is the best outcome for this particular term? Where could this land?’” Aydin says. “Then start from there, versus starting from the middle.”
4. Keep it human
Once you’ve landed on the best possible outcomes for your terms, the next step is getting those results in a negotiation. Generally, that process is left to lawyers in a boardroom, but Aydin recommends opening that conversation up.
“You can get stuck between lawyers, but the approach we took was to really talk with our partners,” Aydin says. “We would say, ‘I’m curious — your lawyers are talking about this. Could you explain why this is important, from your perspective? What is the main thing that you’re looking to protect against here?’”
By asking exploratory questions rather than assuming intent, founders can gain a deeper understanding of the true motivations behind certain terms.
“When you really deeply understand the ‘why’ of the term and their perspective, it gives you a whole different negotiating playbook,” Aydin says.
No matter what, throughout the entire fundraising process, remember that “there’s only one company in the world that is unique the way you are,” Aydin says, referencing an idea from Pitch Anything, a book he recommends.
He adds, “Obviously, you don’t want to be cocky, but recognize that what you have in your team and what you have built is super valuable and unique.”