Shieldpay’s Founder and CEO, Peter Janes, discusses his fundraising experiences and offers valuable insights into the fundamentals of completing a round, with Shieldcast host Geoff Dunnett.
In this very special inaugural episode of Shieldcast, Geoff Dunnett, Professional Services Director at Shieldpay, discusses fundraising for businesses with Peter Janes.
Peter discusses the processes adopted for capital fundraising, the types of investors businesses now have access to, and his source of greatest learning.
Fundraising is nothing new to Shieldpay’s Founder and CEO, Peter Janes. Now with eight funding rounds and three startups to his name including an exit with The Post Network and some lessons learnt with Shopa, Peter talks through his own experiences and offers some valuable insights into the fundamentals of successfully fundraising for a business.
Geoff: On our show today is Peter Janes, Peter is the founder and CEO of Shieldpay so rightfully the first guest on the Shieldcast.
Peter: Thanks for having me Geoff.
Geoff: Before building Shieldpay and entering the highly regulated world with payments and FinTech. You built a highly successful career as a sports agent before becoming a serial entrepreneur, founding the Post Network, a series of media platforms that you sold with a number of others to AOL in 2010 at the age of 27. Wow. That's a long time ago. And then founding Shopa, it was awarded the title of a European start-up of the year.
But sadly, as we all know, it didn't make the course, but you've got many funding rounds under your belt. Including some with me involved. I'm looking forward to this conversation and drawing out some of your knowledge to hopefully some engaged and interested listeners. So a number of funding rounds, how many Pete?
Peter: Well as you said, you've been involved in a few of these. But this current one is number eight. Thinking about some of the other ones… putting more grey hairs on my heads, just even thinking about it.
Geoff: So tell us a bit about these, very different businesses. Each of them, the The Post Network, Shopa and Shieldpay. If you could maybe tell us a little bit more about those different journeys and the types of investors that you had, and I guess the support network that you had around those.
Peter: I was sort of thinking about it. Maybe, I think my approach to some of the early ones would have changed. Obviously, in hindsight of what I know now, I think in the earlier days it was much more about just keeping things going and keeping them alive rather than sort of finding or sourcing the right type of investors at that point in time. So I think the earliest stage company, in 2008 to 2010.
We did three relatively quick funding rounds and then the acquisition happened. It didn't go beyond the growth stage really, it was acquired relatively quickly. In those stages we were never really engaged in a classic VC type rounds because the company was at that stage too young. But beyond that it's when you're dealing with larger sums of money, the classics of angel networks or angel investor, it goes beyond that into the realms of institutional VCs, strategic VCs with deeper pockets.
Over those sessions the type of approach that you make to those different sizes of entities changes massively, but conceptually they sort of follow certain parameters. There is a process to follow for each of them but they all are very different.
Geoff: Yeah, I can imagine. What kind of support have you had around those funding rounds? Because obviously the first one, you had no idea what you were doing or did you?
Peter: Yeah, pretty much. I think at those stages it's still important that you get the paperwork right, and obviously what's been agreed, locked down into formal documentation. I've never done a funding round without lawyers involved, but from an advisory point of view, as you can imagine advisors or legal teams don't have a ton of time to be dealing with angel rounds and all the things that go up and down during the course of that stage.
Getting them involved earlier on in the process only really happens when it gets to series A and beyond, because the numbers mean that you should very much take advice as you are negotiating. Whereas angel rounds, you normally agree a price, you set things forward, then you engage a law firm because you don't have enough money to have them involved throughout the journey of the negotiation period, for example.
Some of the funding rounds, we made a few mistakes. I wouldn't do a tranche based funding round ever again, for example, it's really problematic. You’d probably accept terms that should you have someone with you throughout the journey of the whole funding cycle [they] would advise you to stay well clear of.
I think it's a difficult balance. You don't want to engage law firms too early on because it can get quite expensive, but at the same time, it's not as expensive as essentially signing on the wrong terms. It's a difficult balance.
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