Nobody needs to raise $10M at pre-seed anymore

Yeah, thank you for having me. Very excited to join and to to have this discussion.

Yeah, so I come from more than 15 years of working in startups and scale-ups in the US, the UK, throughout Europe, but I've also been responsible for up to 12 different territories at a time. I've seen startups from being employee number two, employee number 20, all the way through working in companies that have hundreds, if not thousands, of employees. So I've seen all of the different ranges of different sizes, different verticals. different functional areas being built. And so after all of that time, I said, you know what, I've got a good amount of experience and expertise across different business models, different sectors. different nations, different cultures, why don't I put that into practice on the advisory side? And so I decided to form my own company, which is Doyle Blackfires. As you mentioned, I was living and working in London at the time. And so I created it a bit as a side project to begin with. And then it I ended up getting enough clients that it made sense to start to really build out the business, hire other people, expand to a second location. And so yeah, so far it's been the most challenging thing that I've done in my work history because you're not just building a company, you have to operate it. you have to handle all of your staff. You have to handle everything from the admin to working on everything for client delivery. Plus you always have to be getting in new clients every day. So the balancing act of being The operator, the delivery person, and the main salesperson is a huge challenge, but one that has been an uphill battle, but still very rewarding.

Yeah, so we focus on a few different areas for startups. We predominantly work with tech native, so SaaS Enterprise Tech, or we do have a lot of foundational AI companies that we're working with. and so we really do live in that tech and deep tech sector. And we work with them on helping them to understand what are the product needs in this fast changing environment today. I've seen some of our clients have completely changed their entire product offering within six months due to the changing nature of AI. And so we work with them a lot, not just on product and product development, but also go-to-market, internationalization, and also fundraising. And so fundraising today also has changed dramatically in the last five, 10 years. Again, we see evaluations going towards certain kinds of companies versus others. And so we really found our niche in working in this tech and deep tech sector on topics that are specific to them. and knowing that there isn't is not a huge saturation in the market of products and services that are labeled as AI, but truly are not. And so we really help to differentiate our clients in the market and help them to get funded so that they can continue to build and to grow.

Yeah, typically they assume that a product launch with some minimal marketing is what a launch actually is, but it's not. And so this is also what I saw working in-house. You need to have your engineering and dev ready, you need to have the product ready, you need to be market ready. So is it price, package, position, sales is understanding exactly what it is, what it does. the you understand the market timing and market factors, and then you also have a marketing campaign. So there's a lot of things that go into what is go to market. And that's specifically for something like a product release or feature release. Then you also have go-to-market, which can be an entire company launch, or you can have go-to-market, which can encompass new markets and new market growth, or you can be entering into a new vertical. So you produce technology for one specific functional area, one specific use case, and now you're going to stretch horizontally. into a new use case? All of these things need to match and live under the broader hood of the company. So does it fit the company ethos mission? Does it fit the brand? Do the storylines match? Is the sales team prepared for this? Do you need to hire new or specific people? How internally are you organizing all of this? What are the performance metrics that you need to capture? How do you roll it back up into revenue? And then how does it fit within the strategic planning of the entire company? All of these factors go into go to market. And so most people think it's just we release a product and then we put a quick marketing campaign behind it. And really, you know, that's way too simplistic these days.

Yeah, so we need to tie it back to the company strategy and largely to the revenue goals. You don't throw out a new product into market assuming that you're going to lose money off of it or not make any money. And so we need to understand what exactly the company is focused on, where and how they think that this particular launch is or is not going to impact revenue. And then we need to see at what magnitude. So is it a huge launch that's really going to 3X the company? Is it a small feature launch that is going to augment a client or user experience? And so we really try and gauge how this fits into the broader company strategy and what we call revenue or commercial planning. And then we think about all right, what are all of the needs internally that we need to have to be aligned? And so remember what I mentioned, kind of these four stages. Is engineering and dev ready to release? Is product ready to release? Is market and commercial ready to go? And is marketing ready to go? Are all four of these? they're generally separated teams. Are all of these teams aligned on key dates, key performance targets, what they expect users to do, what they expect users not to do, fail-safe plans, for example, if we have product breaks, if we have significant positive or negative customer feedback, all of these things need to be tightly controlled and kind of overseen. And it's not really a project management role, it's very much being that glue horizontally between these functional teams, but then also vertically to the executive team and to the revenue and commercial planning team. So that's what I would look at. And it's a bit of a T structure. And so even if you have one person in each one of these roles or somebody who's managing two of these roles at the same time, depending on how big your startup team may or may not be, or the team that's actually working on this, you know, you still need to make sure that everything is horizontally aligned and then vertically aligned under it.

Yeah, so the statistic comes from of the companies who request funding or pitch for funding, less than two percent globally will actually receive a full funding round. And there's two things that I think modern day founders need to have a real thought about. And the first is what I see dominantly in my practice is that full funding rounds are no longer the status quo it used to be. But now we have this idea where you can get a couple of angel tickets or small investment, where you don't need to do a full round at full valuation and at priced equity only. What you need to do, and the point of fundraising, is that you get money to enable you to do something. And so whether that be to finish building your product, whether that be launching product market, whether that be hiring. Or whether that be other operational things, for example, growing the team, getting an office, buying laptops, all of that, there has to be a purpose for the money that you're requesting. And founders really need to sit down and have a good think to themselves, how much money do we actually need to operate over the next 18 to 24 months? And if we're able to generate our own revenue and we just need a little bit of money to augment to help us get there. That's all you need. You really don't need to be doing these large rounds, even at pre-seeds, saying, I need to raise five, seven, 10 million. Those days are gone. And part of that has to do with AI and AI now decoupling the need for large teams. When you run a business, your highest expense is your staff, it's your employees. You pay not just their salaries, but you also pay overhead, you pay tax benefits, things like that. And so now you have fewer employees, fewer staff-related costs due to AI. Therefore, the amount of money that you need to raise traditionally is lower. Second is that the goalposts have shifted. 10 years ago, you know, we are in 2016, Brexit has just happened. we're now fully out of the 2011-2012 recession. And SAS is the big one, but SAS has an acquisition model that's what we used to call hockey stick. So it goes the trajectory is quite high upwards. And so in order to be able to acquire, retain, and have these people be economically viable for a company, meaning that they pay their subscriptions again and again, or their membership fees or however it's priced. You need to have a lot of staff to create a lot of product, a lot of customer service, and a good amount of marketing to acquire all of this. plus, you have to build the product. And so it's not cheap to build product back then. Now it's cheap to build product, but back then no. And so you needed to have all of these fundraises to be able to get all of this money in to be able to do what you're going to do to give the return on investment to the investors. And so. Today it is cheap to build product. You don't need to hire as many people. Your most expensive salaries are now gone or significantly lower. Your most expensive salaries are typically your software developers and your engineers who are now, again, due to AI, largely being replaced. Look at what Microsoft is doing. They announced, I think, yesterday or this morning, 30,000 jobs cut. And so, you know, the the goalposts have just completely shifted. The last bit is What we used to see in pre-seed and seed fundraising has now moved to seed and series A. You it's no longer an idea that's being funded. You need to show here's your product, here's your traction, here's what you anticipate for the next several months so that you can continually show traction. It's not just proof of concept anymore, unless if you're in very specific industries. And again, because building tech has become so democratized. especially in the last few years, look at lovable, open AI, all of this are enabling us to do this. So now things in the fundraising world have largely changed. And investors are also very wary because everybody can build product, but do they know how to run a business? And so right now there's a lot of movement and shifting in the investment world. And so, you know, we're gonna see either an AI bubble, we're gonna see a lot of really good companies that go unfunded. we're going to see, you know, something happening in the top and the bottom, but the middle area is still a big question mark. What's gonna happen in the next three to five years.

Right. We're going to see a lot of depth in SAS. I sorry to interrupt. I think we're going to see a lot of depth in SAS. and we're going to need to really focus on AI skilling and upskilling because I still see that the majority of people don't use it properly and don't understand its full capabilities. and then what we're also going to need founders to understand is that even if you have a smaller team. It's still a matter of brain space. And so if one person using AI can theoretically do the job of four to five people, that's still one person steering four to five cars simultaneously. And so the way that we think about utilizing AI, the way that we think about training people with AI, we haven't caught up yet. And I don't see it coming in university lessons either. and granted, it is all quite new, and I don't expect professors to be experts either. But we're in this very interesting changeover phase where we're gonna see a lot of unfortunate death and turn in companies and employment. And as I said, three to five years, we're gonna need to ride it out and see what happens.

Yeah, I would say, look, at the beginning of my career, there was no such thing as digital. It wasn't a word. People didn't understand it. Everything was still offline. The internet was obviously around, but people still had desktop computers with the giant towers. And so when I started my career, companies were questioning should we even have a website? If so, why? Are people going to read about us online? Are people going to buy from us online? Those were the big questions at the start of my career. And I said, you know what, I see all these people. Who are actively moving into the online space? And I need to understand how it works in order for me to be able to do my job really well. And so I learned how does the internet actually work? How does Google work or search engine at the time? Because Google wasn't the most popular at the time. how is a CRM system built? Why do we use CRM systems? How are websites built? What is code? And so I learned all of these things. That helped me to stay ahead of the curve. Granted, I have been working in tech companies for the better part of 20 years by now. And so things like LLMs and NLP I was working on in the early 2010s. So this is not new to me. And so what I encourage people to do is to understand how this stuff works. So then you understand what it's capable of doing for you and also for your company. How can you upskill yourself in order to understand? Something as simple as a chat interface is not the best usage of AI, although that's how many people are currently using it. You know, what is agentic work? What is headless work? Why are central brains really important? Or company brains as they're also called. And so when you understand how everything practically works, you don't have to be a developer, you don't have to be an engineer, you don't need to learn data science. What you need to understand is how the stuff functionally works. And then you can go into your own company, into your own role and do it better, faster, and more agily. And then you continuously learn and continuously upskill and continuously improve your own performance. That's what I would encourage the most people to do. And second is also for founders, because I see so many founders who think that they have the world's greatest idea. And that's wonderful. That's the point of being a founder. You are the ideas person, you are that new genius bringing something to the world. but really you need to understand product. And so I see a lot of people who say, I can just vibe code this. But the answer is not just you've built a web page or you've built a platform or an app. There's so many other things. You know, what about OAuth? What about safety and security? Are you in do you have a properly hooked up CRM payment system? Do you have privacy policies, data protection notices. You know, there's loads of details in things. Do you have a DPO in a company? Do you know what a DPO is? Anybody can vibe code, but you don't understand how product works, you're not going to have a company and you're not going to have a market solution. So really what I would love to see is people a learning how these tools work so that you can use them for your best benefit, but also learning product and learning product inside out.

Reach out to me. well, LinkedIn, very obviously. I'm quite active on LinkedIn, as is Doyle Blackfriars. certainly you can follow me, message me, reach out to the company. on our website, we also have everything about what we do and you know, there's general contact information there as well. But yeah, LinkedIn is always the first point of contact.

Well, thank you so much for having me. Have a good afternoon.