{"id":7796,"date":"2021-09-03T15:31:50","date_gmt":"2021-09-03T14:31:50","guid":{"rendered":"https:\/\/www.sage.com\/en-ie\/blog\/?p=7796"},"modified":"2026-01-07T13:40:04","modified_gmt":"2026-01-07T13:40:04","slug":"sound-advice-how-to-fund-your-startup-sam-jones","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-ie\/blog\/sound-advice-how-to-fund-your-startup-sam-jones\/","title":{"rendered":"How to fund your startup and convince people to invest in it"},"content":{"rendered":"\n

Sam Jones\u2019 Dragons\u2019 Den UK startup pitch<\/a> is immortalised as the TV show\u2019s \u201cbest ever\u201d and Harry Redknapp describes him as having the work rate of a top footballer.<\/p>\n\n\n\n

Read on to discover how Sam convinced stars such as Tinie Tempah to invest in his tech startup, Gener8<\/a>, a new web browser that lets users earn from their online data, and took his idea from paper to pitch to product.<\/p>\n\n\n\n

Get straight to the advice here:<\/p>\n\n\n\n

Even if you\u2019re happy in employment, some opportunities might be too good to miss<\/a><\/p>\n\n\n\n

It\u2019s possible to win funding with an idea and no working product<\/a><\/p>\n\n\n\n

The first fundraise is both the easiest and hardest<\/a><\/p>\n\n\n\n

Using agencies to build your product may be helpful<\/a><\/p>\n\n\n\n

Startups are a roller coaster. Adjust your business where necessary<\/a><\/p>\n\n\n\n

If you\u2019re going to let people go, give them support<\/a><\/p>\n\n\n\n

Approach funders who can add genuine value to your business<\/a><\/p>\n\n\n\n

Play to your strengths and neutralise your weaknesses<\/a><\/p>\n\n\n\n

Understand where you have to work harder and longer than the competition<\/a><\/p>\n\n\n\n

Focus on what you can control, not the competition<\/a><\/p>\n\n\n\n

Understand where you have to apply the pressure<\/a><\/p>\n\n\n\n

Have a network of other business owners and founders to lean on<\/a><\/p>\n\n\n\n

Be focused, determined and have a sense of urgency<\/a><\/p>\n\n\n\n

Get involved in admin tasks at the beginning to learn as much as you can<\/a><\/p>\n\n\n\n

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Even if you\u2019re happy in employment, some opportunities might be too good to miss<\/h2>\n\n\n\n

Bex Burn-Callander:<\/h3>\n\n\n\n

I\u2019m going to go straight in and ask you about Gener8, the web browser.<\/p>\n\n\n\n

What made you decide to take an enormous leap into the unknown and do this, given that I know you were happy at your previous job and having a great time there.<\/p>\n\n\n\n

So why take the risk? Tell me everything.<\/p>\n\n\n\n

Sam Jones:<\/h3>\n\n\n\n

I used to work at Red Bull, the energy drink, as part of their global marketing team, most recently as global brand manager.<\/p>\n\n\n\n

I was working on and responsible for about one-third of their worldwide advertising, and it was incredible fun working with some of the best athletes in the world to tell their stories.<\/p>\n\n\n\n

I realised that when the likes of Facebook, Google or Snapchat pitched to us to tell us why we should advertise with them, they all threw up the same slide.<\/p>\n\n\n\n

It was a data slide that said, \u201cLook at everything that we know about our users.\u201d<\/p>\n\n\n\n

I would sit there as a user thinking about all of the data tracked I was unaware of. I believed that soon, more people would realise that something tracked them for everything they do online.<\/p>\n\n\n\n

With every question they search for, every website they go to, and every item they buy online, tens and sometimes hundreds of different companies collect this information, aggregating it and selling it.<\/p>\n\n\n\n

I believed that once a person realises this and recognises that their data\u2019s valuable, they\u2019ll want to do one of two things: either stop this from happening so they can have more control, or share in the rewards and earn from their data.<\/p>\n\n\n\n

Simply based on that basic idea, I left Red Bull and started Gener8 to build technology that would empower people to control or earn from their data.<\/p>\n\n\n\n

Bex Burn-Callander:<\/h3>\n\n\n\n

But was it a wrench?<\/p>\n\n\n\n

I\u2019m trying to imagine you having this great life, enjoying your job, and then thinking, you know what, I\u2019m going to leave my stable career. I\u2019ll go to plough every waking hour into a new tech business.<\/p>\n\n\n\n

Sam Jones:<\/h3>\n\n\n\n

Making the jump is the hardest thing, or at least it was for me because I was coming from a position like you\u2019re saying where I loved what I did.<\/p>\n\n\n\n

It wasn\u2019t that I was at a dead-end or was fed up and wanted to try something new. It was that I was coming from a position of strength where I loved my day-to-day.<\/p>\n\n\n\n

So it took a lot of thinking, pondering and conversations before I got the guts to leap.<\/p>\n\n\n\n

Eventually, my girlfriend at the time (my fiance now) said to me, \u201cSam, you either need to stop talking about this and just put it to bed, or you need to do something and crack on with it.\u201d<\/p>\n\n\n\n

So eventually, I started to have conversations with angel investors.<\/p>\n\n\n\n

Once I found the first couple of people who wanted to come on board, that gave me the confidence to say, let\u2019s go for this, and I handed in my resignation.<\/p>\n\n\n\n

It\u2019s possible to win funding with an idea and no working product<\/h2>\n\n\n\n

Bex Burn-Callander:<\/h3>\n\n\n\n

How on earth did you convince these angels when you didn\u2019t even have a product to show them?<\/p>\n\n\n\n

Sam Jones:<\/h3>\n\n\n\n

It\u2019s a good question. I was indeed fortunate.<\/p>\n\n\n\n

It\u2019s not the usual thing for a solo founder who can\u2019t code to raise money with an idea on a piece of paper.<\/p>\n\n\n\n

The odds are against you.<\/p>\n\n\n\n

But then again, the odds are against you with everything that you do when trying to build a business. The way I approached it is that ultimately you need to kiss a lot of frogs, have a lot of conversations, and speak to a lot of people.<\/p>\n\n\n\n

But if you can find people that believe in your idea, and you can tell them a compelling narrative, giving them proof points that allow them to get the confidence to take a leap of faith in you, it becomes a no brainer.<\/p>\n\n\n\n

So from my side with Gener8, even though it was an idea on a piece of paper, I was able to say, \u201cHey, this is who I am, and this is what I\u2019ve done. These are the reasons that I\u2019m credible and I believe I can pull this off.\u201d<\/p>\n\n\n\n

And then I could say if we look at the market and the legislative change that\u2019s coming, consumer sentiment and all of these data points, then we can believe and you can have faith that this vision that I have for the future may well come into fruition.<\/p>\n\n\n\n

Then the final piece of the puzzle is them having the belief that you can commercialise that.<\/p>\n\n\n\n

Ultimately, at any fundraising stage, it\u2019s those three things that you\u2019re trying to display and show.<\/p>\n\n\n\n

The only way or reason that funding gets slightly more straightforward as you go along is that you have more and more proof points to deliver on your narrative and story.<\/p>\n\n\n\n

The first fundraise is both the easiest and hardest<\/h2>\n\n\n\n

Bex Burn-Callander:<\/h3>\n\n\n\n

Can you tell me how much you managed to raise with just that paper idea?<\/p>\n\n\n\n

Sam Jones:<\/h3>\n\n\n\n

Yeah, that was the first \u00a3200,000. The first \u00a3150,000 in the UK that you raise is both the easiest and the hardest.<\/p>\n\n\n\n

It\u2019s the easiest because there are many tax incentives for high-net-worth individuals called SEIS (Seed Enterprise Investment Scheme<\/a>). That means that if the venture fails, they get a reasonably good safety net in tax relief.<\/p>\n\n\n\n

So at the first \u00a3150,000, I think if you\u2019ve got an excellent business and a good idea, lots of people want to come in at that stage so that they can benefit from that kind of protection.<\/p>\n\n\n\n

However, it\u2019s also the hardest to raise that first \u00a3150,000 because you\u2019ve got no one else by definition who believes in you at that stage and has put money in.<\/p>\n\n\n\n

It\u2019s a tricky spot to be in, but that\u2019s how everyone has to start.<\/p>\n\n\n\n

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Using agencies to build your product may be helpful<\/h2>\n\n\n\n

Bex Burn-Callander:<\/h3>\n\n\n\n

So, where on earth do you start? How do you find the tech skills to create something that can be a worthwhile competitor?<\/p>\n\n\n\n

Sam Jones:<\/h3>\n\n\n\n

Well, we didn\u2019t start with the vision of building a browser.<\/p>\n\n\n\n

We started with the idea of building technology that empowers people to control and earn from that data. So initially, a browser extension.<\/p>\n\n\n\n

In scope, we were a little bit smaller. But the same challenge was there: how do we get from this idea on a piece of paper to a product in the real world?<\/p>\n\n\n\n

And there are lots of ways you can go about that.<\/p>\n\n\n\n

The textbook way is to hire a great team, sit in a garage, and start coding and building.<\/p>\n\n\n\n

But in reality, although there\u2019s lots of tech talent around, it\u2019s not the easiest thing to find the first hires and the first people to come in and go on that journey with you.<\/p>\n\n\n\n

So what I did was use an agency to get version one or version 0.5 of Gener8 out in the world. That was an interesting process because we held an agency pitch where I spoke with four or five different agencies.<\/p>\n\n\n\n

And from that, I was able to learn the challenges they foresaw from a technical side, and ultimately any challenges result in increased budget and time.<\/p>\n\n\n\n

So in this initial process of holding a pitch, I was able to learn what the difficulties were going to be and how we could overcome them.<\/p>\n\n\n\n

Specifically to Gener8, there was a complex problem about what happens within the 600 milliseconds a webpage loads. A lot of different things are going on. And most of these agencies said we don\u2019t know what happens in that timeframe.<\/p>\n\n\n\n

That gave me the information to go out and start speaking with industry experts so that I could bring someone on board who could solve that challenge for the agency to execute.<\/p>\n\n\n\n

Bringing in these kinds of different people and players worked well.<\/p>\n\n\n\n

We then built version one with an agency, and the natural progression was to say, let\u2019s bring this in house.<\/p>\n\n\n\n

When it came to hiring and finding our CTO, we were able not just to show them an idea\u2014it\u2019s daunting, saying, \u201cHey, we want you to be the first hire to build this massive thing.\u201d<\/p>\n\n\n\n

Instead, we were able to share the product that worked, and we could say, \u201cLook, this is where we are today. We\u2019ve got X thousand users. Here\u2019s the vision for the future, and we want you to come to manage and grow this.\u201d<\/p>\n\n\n\n

It becomes a much easier job of hiring great talent if you\u2019ve got something that you in the world you can show.<\/p>\n\n\n\n

Startups are a roller coaster. Adjust your business where necessary<\/h2>\n\n\n\n

Bex Burn-Callander:<\/h3>\n\n\n\n

It\u2019s incredible how enormous and daunting these big and bold ideas are. When you break them down into these smaller steps, suddenly, anything is achievable.<\/p>\n\n\n\n

When you explain each step you took down this path, each one on its own is possible. But the whole thing seems way too big.<\/p>\n\n\n\n

Were there any difficulties along this path?<\/p>\n\n\n\n

Sam Jones:<\/h3>\n\n\n\n

Of course. It\u2019s a roller coaster ride as a startup.<\/p>\n\n\n\n

The biggest challenge that we faced in the last 24 months was in February and March last year. We had a round of about \u00a31.5m lined up in investment ready to go.<\/p>\n\n\n\n

Then in early March, coronavirus started to spread around the world, and consequently, affected our entire round.<\/p>\n\n\n\n

We went from this position of feeling confident, having loads of momentum and an excellent hiring plan in place, to all of a sudden, out of nowhere, money had just totally disappeared.<\/p>\n\n\n\n

We needed to figure out how we were going to respond and survive.<\/p>\n\n\n\n

I went back to existing investors and ultimately convinced them to put a little more money in to extend the runway and continue.<\/p>\n\n\n\n

I sat down with the virtual team because we were all broken up at this point and said we\u2019re going to need to do three things.<\/p>\n\n\n\n

We needed to respond, rebuild, and recover. We\u2019re had to cut costs. That meant we all had to take pay cuts. We had to use the UK furlough scheme for a few people, and unfortunately, let people go.<\/p>\n\n\n\n

It was a harsh cost-cutting exercise.<\/p>\n\n\n\n

And then step two, we needed to rebuild and had to do that by revisiting our fundamentals, understanding what\u2019s changed in the world, and adapting our business as necessary.<\/p>\n\n\n\n

Step three was how we wanted to recover by implementing new revenue streams and different approaches, ultimately thinking, \u201cHow can we maintain growth through this period?\u201d<\/p>\n\n\n\n

So that was a challenging phase, as it was for most of the world.<\/p>\n\n\n\n

I think, especially as a startup, you fall into one of two camps at that point.<\/p>\n\n\n\n

Either you had good capital in the bank, which meant you could make hay while the sun was shining because everyone was at home and using technology more.<\/p>\n\n\n\n

Or you fell into that second camp where we were, which was not a great position to be in, where funds were low, and we had to think creatively about how we get through this.<\/p>\n\n\n\n

If you\u2019re going to let people go, give them support<\/h2>\n\n\n\n

Bex Burn-Callander:<\/h3>\n\n\n\n

Is that the first time you\u2019d had to fire somebody, and how on earth do you prepare yourself to have that conversation?<\/p>\n\n\n\n

Sam Jones:<\/h3>\n\n\n\n

I wouldn\u2019t use the word fire.<\/p>\n\n\n\n

Letting someone go is never very nice, and ultimately it can happen for various reasons, but I think it\u2019s usually a reflection of the hiring manager or the company at fault.<\/p>\n\n\n\n

You should ideally have a process that can give you enough confidence that you\u2019re going to hire the right person, and then you should put them in a position to succeed within the first one or two months.<\/p>\n\n\n\n

Coming into coronavirus, of course, was a transparent reason we had to let people go\u2014which was cost-cutting.<\/p>\n\n\n\n

They\u2019re just not very nice conversations, but how you approach it is transparently and honestly.<\/p>\n\n\n\n

You\u2019re saying, \u201cThis is the position we\u2019re in and the reason we have to make this decision. Here are the things we\u2019re going to do to make the transition as easy as possible for you, starting with having the most glowing reference that you could ever receive.<\/p>\n\n\n\n

\u201cSecondly, we\u2019re going to put you in touch with these recruiters, and there are these job roles where I think you could be a good fit.<\/p>\n\n\n\n

\u201cAnd thirdly, if there\u2019s anyone in my network that you see hiring, let me know, and I\u2019ll put you straight in contact.\u201d<\/p>\n\n\n\n

Ultimately, I think that\u2019s all you can do. Try to support people and recognise that everyone\u2019s human, and it\u2019s not a very nice position for anyone to be in.<\/p>\n\n\n\n

Bex Burn-Callander:<\/h3>\n\n\n\n

What a lovely approach, though, to think about how you help them into their next role.<\/p>\n\n\n\n

Rather than focusing on, \u201cSorry, the world has changed,\u201d it\u2019s more on, \u201cAll right, how can we get you on to something else that will make you just as happy and fulfilled?\u201d<\/p>\n\n\n\n

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Approach funders who can add genuine value to your business<\/h2>\n\n\n\n

Bex Burn-Callander:<\/h3>\n\n\n\n

So how did you get these big-name investors on board? Was this after the round disappeared and you went back on the funding trail? Because you\u2019ve got some big celebs invested in the business.<\/p>\n\n\n\n

Sam Jones:<\/h3>\n\n\n\n

We came through coronavirus and had this incredible opportunity to invite me to Dragons\u2019 Den to pitch, which was filmed last September and only aired at the end of April this year.<\/p>\n\n\n\n

I was confident. I knew that it had gone quite well as an experience, and I knew the outcome.<\/p>\n\n\n\n

What happens in real life is that you\u2019re pitching for two hours to the Dragons, and then they cut this down to 10 to 15 minutes for TV. You don\u2019t know what\u2019s going to air.<\/p>\n\n\n\n

By the time it came round, I\u2019d convinced myself that it might not even be that good. We had no idea what was going to happen.<\/p>\n\n\n\n

But ultimately, off the back of airing on BBC1 in April, things went crazy.<\/p>\n\n\n\n