 Jessica, it's great to have you here today. It's your ninth time at Slush. Yeah, ninth time at Slush, and still loving this conference. Amazing. We're going to talk today about raising a seed round. And as you've all heard, that's something that you're an expert on. And yeah, without further ado, let's get into it so we have time to cover all of the burning questions. Starting from maybe the first obvious question, when's the right time to start thinking about raising a seed round? Yes, I think the first question to think about is, should I raise a seed round? Is venture funding right for me? And if the answer is yes, I think there's a simple advice, and that is, if you can raise money, you should raise money. And I think starting from the beginning, if I generalize a little bit, normally a company that is ready to raise their seed round, you have achieved your MVP and you want to raise money for kind of getting your product market fit. And for a seed round, it's a lot about the team, the founder, the vision, more the thesis. So you have a problem, you know the solution, this is the market. But what we've seen in this market is that, that used to be enough. We see a little bit more now that it's also some kind of traction required. You want to be able to talk to the customers, you want to be able to get some product love. And then it's time to raise a seed round. And I think another advice is probably not to wait too long to raise, so go out before and then realize that it might take some time, especially in this market, kind of when you're ready to raise. How long would you say that it takes in the current economic environment? It was interesting because we've definitely seen a shift. It used to take, I would say, could take four to eight weeks and then you need to add on preparation for seed round. I think in this market, it's more three to six months. So I would advise you to at least count for six months of runway when you go out to raise. All right, let's get back to this topic later but now talk about how much to raise because that's perhaps the second question. So how should you, as a founder, think about the size of your seed round? Well, I would start by answering a couple of questions for your startup. The first one is how much capital is required to get to your next fundable milestone? So how much capital do you need to get to, you know, prove your milestones? The second question would be, you know, think about your dilution, how much equity are you willing to give away? What kind of dilution can a company take? I would also think back to the investors for the states you're in, for your sector, for your company, how much money do you think investors are willing to invest? And then the last question is also probably, how much time have you got? If you have more time, you can probably raise a little bit more. If you're getting close to the cash out date, a little bit less. I think when I looked at the data before I came here and at Nordzone, I think an average round now is probably around two to five million dollars or Euro, very similar. The median was three million. So that is a little bit on what we see today in terms of size. Do you find that founders usually have a good perception of what the right size is, or any tips to give to the founders in the audience? You know, a very simple advice is, it's easier to increase the size than to decrease their size. And you would be surprised by how many times we get as an investor where a founder come to us and say, you know, I want to raise a seven million seed round or a 10 million seed round or a 50 million seed round. Then it goes a couple of weeks and you get another call saying, ah, actually, you know, the market has changed and we rethought our strategy and we want to raise a five million or three million. I would say, you know, an easy tip is, start lower of your lower range and then scale up. It's a much stronger signal to go back to your investor and say, actually, I told you three million but we've had so strong investor demand. The round is getting over subscribed so we're actually going to extend it a little bit. I think that's a very good signal as an investor. All right, so start small and then scale up. Well, once you know when you're going to raise and how much, how should you prepare as a founder for starting to fund raise? Well, first of all, you know, I've raised funds from the entrepreneurial side and it can be brutal. I think as an investor, I have a lot of empathy for founders going out to raise. It is a little bit like when I was younger, I used to do door-to-door sales. You know, you walk around, you knock on doors and you try to convince people to buy your products. I think raising a round is very similar and you can prepare for that mentally. There is a lot of grit, resilience required. You will speak to so many investors. If you read in the media, it's easy to think that, you know, the round get over subscribed, I raised the round in two weeks, it was so easy. But if you talk to any founder that has raised a couple of rounds, you will hear that it's, you know, a lot more new on stories. I would say that prepare mentally for, you know, getting a lot of notes, talking to a lot of investors, it will take a long time, it will be more difficult than you expect and also kind of mentally being prepared to being away from your company or operations for such a long time. But when you feel like, I'm ready, I can do it, you know, it's often inevitable, especially if you're sitting here and you know, you're thinking about the venture route, then I would prepare a little bit on first, kind of thinking through your pitch. In Europe, if I compare and generalize a little bit, Europe versus US, and we have office in New York as well and in Europe, we see that it's a lot more focus on storytelling in the US. And I think European founders, you think more about the story of your company, what, why does it matter? And you need to make sure that the story resonates, then I would also prepare for your pipeline on how to get into the right investors, what makes sense, who's investing in your stage, your type of company, what kind of investors do you wanna work with? And then as I said before, allow enough time to get through that process. You don't wanna get to the end of your runway, you're getting a little bit desperate and people can feel it. So those are things to kind of prepare. If you have a team, I would also prepare the team that you as a founder or the C level, the kind of team you have, it will take time off of your business. You will be more stressed, you will have this emotional roller coaster, prepare the team that, you know, they will have to help you a little bit with this process and it is a lot of things that needs to be prepared as well in the funding round that you can get help from the team by. Yeah. What are then the biggest risks that might come up? What should you prepare for besides you coming to the end of your runway during the process? Well, I think it's a couple of things and I think at NorthSum we see them over and over again. You know, the first one we see is that a lot of founders go out and race before they are ready. So think through what are those milestones or those inflection points where you think you can race around and I think an easy, you know, thing to do is to actually ask some investors. You know, you build your relationship over time, you start well before you want to go out and race, but actually ask the investors. I get the question all the time. You know, for a company like mine, what would you want to see to race a seed round and A round? You can have that discussion. So I would say, don't go out before you're ready and assess that well in advance so you know that these are the milestones that I need to hit to be able to race around. Then I would say, don't ask for too much. As I said before, it's easy to, you know, you aim for seven, you anchor the number seven and then you go out and realize, shit, this was really difficult, market is tough. I'm only gonna be able to race three and that makes it harder, so kind of start low. And the second, or the third thing is actually evaluation. And here it's interesting because it's easy to, in the beginning evaluation, as you all know, it's hard to set evaluation, how do you do that? And it's easy to, you know, I would say aim too high and even if you can get that prize, it might kind of hurt you going forward that we've seen many, many companies that are able to race an incredible seed round and you aim for a high valuation, you get your valuation, you know, you're super happy and then you celebrate and then you get to the A round and you realize, oh, to race an A round, I need to grow into the valuation and I need to kind of grow over and you need to grow into the next valuation of the A round and kind of de-risk the company, so to say, from the investor's point of view and that can be very hard. So I think be realistic in the valuation and also kind of set it up for the long term. Seed round is one point in time, but there will most likely be more rounds and then you want to have a valuation that makes sense and I think we looked at the data internally. These are rough numbers, but I think what we see is, I told you there's seed round, what we see is between two, three million up to five. If you look at dilution for that, it's from 10%. If you can, you know, if you can get away with 10% dilution, well done. I think that's great. We see up to 25%, so 10 to 25%, I would not give away more than 25%. So these are some rough numbers that we see in the market now. I think market is more difficult now, so it's probably kind of at the higher end of that range, but at least you have some guidance there in terms of valuation. Yeah, so don't set the price too high and keep the dilution low. I sound like an investor now, you know, set the valuation low. But yes, I think it's so much easier to kind of scale it up versus the opposite. Yeah, then once you kind of figure this out, you have to go find the right investors for you, right? So how do you do that as a founder? Like what kind of investors should you look for and how do you make sure that you're reaching out to the right funds? Because I think that's something that probably many people in the audience might have struggled with. Yeah, and it's hard, right? I think this is a topic that often gets, you know, forgotten in the process, but for you are focusing so much on raising capital to your startup, but the reality is that these are people that you will work with for a very long time. So I would say, you know, turn the question back. Who do you want to work with? Who do you want to have on the other side of the table? When I joined Nordzone almost 10 years ago now, my partners told me that, you know, getting a divorce is easier than getting your investors out. I think that statement is a little sad, but it's also kind of a very, very long-term relationship and you need to have investors that, you know, believe in your company, believe in you, you align on the vision, but they're also able to help in the process. So I would urge everyone to kind of use the fundraising process as a due diligence process for yourself as well. How do you make sure that, you know, these are people you want to work with? I would talk to portfolio. Look at the portfolio companies that didn't succeed. These are the best references. How do investors deal with failure? Do they leave you kind of hanging in a very different, difficult process? Or are they there as a support throughout the journey? Talk to other founders. We talk a lot about, you know, how do you get tips and tricks and raise the seed round? But I think, you know, talk to other founders that have just raised the seed. You will get the best references. It spreads quickly in the market when investors are not kind of, you know, the people you want to work with. And also, brand is one thing. Another thing is kind of investor on your board. So look kind of at the fund, both kind of in terms of brand, but also look at the people you're working with who has the right sector experience, who has the kind of personality that you want to have on your board, who has someone where you feel like, you know, this is an investor that can help me get throughout the journey. And then, you know, it is also, I would say it helps if you do enough homework to also kind of know your audience. I see a lot of founders that are wasting the time. They are, you know, a B2B company pitching to consumer investor. It's a early stage company pitching to a series B investor. You know, do some homework to see, does this investor invest in my sector, in my type of company, in my stage? Otherwise you're wasting a lot of time. There's so many investors out there. So that's kind of what I would do as a first step. Yeah, lots of good tips there. Once you figure out, you know, you've done your background research and you figure out that Jessica Northstone, that's the perfect one for me. How does one get in touch with you or, you know, investors overall? Well, I always hear, you know, to get in front of an investor, you need to have this warm intro, you can never get in front. I think there's a little bit of arrogance in the industry. I think it's getting a warm intro is obviously easier as in any business, you know, you get an introduction, you have someone vouching for you, that's great. But if we start from the beginning, you don't have a warm intro. You're coming in, you're cold. Like it's not that difficult. I think the real reason is that most investors are drowning in cold emails. You just get too many. So I think if you write a really good, kind of crisp cold email, I would bet you that the conversion rate is actually pretty good. Try it and otherwise I would say it's hustling, you know, getting a lead for founders always hustling. You go to events like this, you grab people with investor tags and say, hey, you look at LinkedIn, who do you have in common? I think an easy, easy, I say, but a pretty good way is also to reach out to angels. They are used to kind of talk, taking the first meetings and getting in very, very early. Then you get your first couple of angels involved and you make them, the angels, go to the fans. At Norsen, for example, we invest a lot together with angels, but we also come in after angels and we have a lot of respect for them and we know kind of that they do a great job at the early stage. So that's also a tip on kind of getting in front of them. But I would say, you know, most of VCs, they reply on LinkedIn. They have their emails on the website. You look at someone where you think, you know, you can reach out or you just reach out coldly. Yeah. About the cold reach out. So what is a good cold email look like? What makes you stop when you're looking through your inbox and be like, this is someone that I need to talk to? Well, first of all, you know, it's funny because you will see so many emails that they are addressed to the wrong person, you know, a high alien in my inbox. So, you know, first get the basics right, but then actually don't copy the emails across to multiple investors. You know, take some time, do the research, send a couple of cold emails to the VCs that really matter for your company, and then just spend some time researching what kind of track record, what kind of portfolio, why would this company make sense for you? And if you've done your research right and you realize, you know, Nordson might be great fun for you or this investor here at Nordson, why is probably because they have some track record, they have similar companies and then use that in the email. So you can read the story, it resonates. I see the team seems very strong, love the vision, the idea, that's enough for a first meeting, I would say. Yeah. What happens at the first meeting? So someone gets a first meeting, first call with you. How do you prepare for that? What do you need to have ready at the seed stage? Well, I would say, I hated fundraising, as an entrepreneur, I thought it was horrible. I'm always so fascinated by people that love fundraising, they're really good at it, you know, well done. It's a lot of pressure, but I think what I realized is that you need to, first you need to prepare for a lot of notes and rejection is hard as everyone knows and it's also hard when you're coming in as an entrepreneur, time is your most valuable asset, you spend your time on building your company, you come to an office, it's normally this fancy marble office, when I raced it was a lot of guys in suits sitting on the other side asking tough questions, you show your baby and they do everything they can to kind of shoot it down, which is hard, but I think what you can do to prepare is also to first think through the pitch, why does this make sense for an investor, you know your audience, so you know you're actually pitching to the right person and then just prepare for that meeting and to be fair, rejection, you will get a lot of rejections, you will get a lot of no, I think the best fundraisers that I've seen both at HelloFresh but also you know, companies like Klarna, Personio, Spotify, iSettle that we've seen at a close kind of, closely fundraise, they are so good at taking this meeting and doing it as a brainstorming meeting, as using those kind of, the feedback you get back, the criticism, the questions, the tricky kind of interactions, I would say they take that back as feedback and they go back and they adjust the pitch, they adjust kind of, they take back some ideas for the company, they ask investors question to get back the macro view, what do you see in the market, what are the competitors doing, what do you see us from the outside that I can change with my business, they try not to make it so personal, it's not a personal rejection that they don't want me as a founder, but trying to use it as kind of constructive, the growth mindset of, how can I make this to become even better? Another thing I would propose founders to do is to construct a data room before you go out and raise, even at the seed stage, it's boring, it's tedious, but it's a great preparation, you get everything in order, it takes some time, but you're getting close to the numbers, the data, the documents, and you don't have to waste time while you're out pitching, then you can just make sure you have it there and you're kind of ready for the fundraise. And what should be in your data room? Well, I think depending on when you raise, beginning super basic data room, it's just kind of the everything, you have your legal documents, you have your financial documents, and then you have your pitch, kind of more of the commercial documents, but in the beginning they are super simple, but for you as a founder, normally you don't have the processes under control, everything is chaos, especially when you are growing fast, but just kind of take some time, get that in order, will save you a lot during the process. Right. As you mentioned, you'll be hit with a lot of a nose during the process. Do you have any learnings from your journey, either as a co-founder or an investor, common mistakes you see founders making, that you would want to tell the audience to avoid? Well, it is kind of handling the nose, I think it's the most difficult part of the journey, it's not maybe in dating, but otherwise where do you get so much rejection, so many noses, it's tough. You have to be a very thick skin, you have to, you get a no, you get a lot of reason why it won't work, you have to brush it off, you have to take some of that constructive criticism, develop your business, but then you have to get back into passion, show enthusiasm, and then you go pitch it again, and it's interesting, right, because you will get hundreds of noses, and at the end of it you will get one yes, but let me tell you in the beginning, it's always the first term sheet that is the most difficult thing, the second term sheet will be easier, it is a lot of herd mentality, so if you can see this more as, you need to keep up the momentum, you need to make sure that the investors feel like they're not alone looking at this, like why would you want to be the only one looking at this company, but you also don't want to feel like, wow, this company is being shopped around, everyone has looked, no one wants to invest, so you need to kind of balance that tricky dynamic of building strong relationships, but making people sure that, get some FOMO in the process that things are moving and you need to get to a decision now, I would say that and handling the rejections, getting to the growth mindset again of showing that I'll use this pitch as a two-way meeting, I want to make sure that you are the right investor for me, so I'm going to ask you a couple of good questions, but I also want to use it to get some good feedback back from you, if you can manage to do that, I'm sure you will do very fun in the fundraising process. In the current economic situation, many founders will get even more notes, so do you have any specific tips for founders looking to raise like within the next four to six months? Well, if you don't have to raise, don't raise now, I would say, wait a little bit, the market is tougher now, we see that rounds are still being done, especially the earlier, if you get up to growth, it takes a little bit longer, fewer rounds, you saw the latest data, it's definitely down, I would say not as much as seed rounds and A rounds, but if you can wait a little, if you're going out now, just think about that, with the market circumstances, you probably need to speak to more investors, you probably need to broaden your funnel a little bit, you probably need to get that kind of momentum that I talked about, and it's not, it is the kind of hustling game again where you will have to be a little bit creative in the beginning, so I would say, allow enough time to do it, talk to more investors at top funnel, and then I would say, talk in the entrepreneurial communities quite a lot, there is so much good feedback there, where people have been out, which funds are active, which funds are not active, there are a lot of funds that are trying to fundraise themselves now, that are taking time from them to kind of invest, they are at the end of the fund cycles, don't pitch them now, it's not kind of, focus your time on funds that are actually active, and then I would say, allow enough time to get through it, a lot of investors are a little bit more cautious now, but most investors that I speak to are still investing, we are still very active, we're still investing seed in series A, and most other early stage investors are, so I think it probably takes a little bit longer at the later stages, but in the beginning, there's still activity, and hopefully next year will be even better. Yeah, so stay persistent and hang in there. We have a few minutes left, so let's kind of talk about what happens after you manage to raise. So, when you as a founder have raised your seed around, you've closed it, what tips would you give to a founder at that stage? How do you use your money? Any common mistakes you see, I think especially first time founders, speaking. Don't spend it too quickly, I would say the simple advice, but it's also a fun thing is that every time you raise a round, you have an announcement in the media, it's interesting to see that you have the first knock on your door, and then the whole team starts asking for a pay rise, because that's normally what happens, you raise your first seed round, and now all of a sudden the company's rich, you can pay a lot higher salaries, and that starts. So you need to kind of keep this mentality of, we are a startup, we don't waste money, we protect our runways, I would say when you raise funding, celebrate, then pause, take some time, map out, what do you need to prove with this funding? What is the next milestone you need to get to to raise a series A? What is the inflection point? Is it growth, is it revenue, is it something with the customer love, or you can show in terms of adoption? But then when you need to, when you know where you need to go, then you also should test that in the environment, it's easy to set on your company, you think that these are the right milestones, and then you start testing the waters in the market, and you realize, oh shit, what's the wrong milestones, I'm not gonna be able to raise on that. So I would say you put up your hypothesis, raise it with a couple of investors that you developed a good relationship with, and then you start kind of execute on that. I think now there's a lot more focus on extending the runway, used to be 12 to 18 months until you raise the next round. I see most founders now aim for two years, so you have kind of runway to execute in two years. If you can raise earlier, great, but at least kind of make sure that you figure out what is needed in terms of team, in terms of cost to get to the next fundable milestones, that I would do after, and not kind of get carried away and say, great, you know, it was so easy for the seed round, let's push for the A round, but kind of leave some space to do that properly. Yeah, that's great advice for everyone in the audience. Before we wrap up one final question, so if you could just leave the audience with one thing to take away from this talk, what would that be? I would say fundraising is tough, and it might take a long time, especially in this market, so kind of leave yourself enough time and runway to get it done. That would be it. That's great. Thank you so much, Jessica, for being here today. Thanks for talking to you, and I hope everyone in the audience will learn something new. Thank you so much, Elin. Thank you.