Strategies for Securing Your Startup's Series B Funding

On this week's episode, we dive into the wild world of fundraising with Kerry Murphy , Founder and CEO of The Fabricant , a ground-breaking decentralized digital fashion house.?I discover Kerry's insights on choosing the right investors, positioning yourself to stay ahead of the innovation curve, and the crucial role of vulnerability and transparency with investors.?

With The Fabricant redefining the wardrobe of the metaverse, find out the advice that Kerry would give to entrepreneurs who are looking to fundraise, the key steps to finding the balance between raising capital and maintaining control over your company's vision - and most importantly, what he would have done differently a second time around.?

Check out a snippet from our conversation below:

Many startups experience a rollercoaster ride when it comes to funding. Can you describe your experience from Pre-seed to now?

When we first started in 2017, nobody used the term digital fashion. A lot of people thought it was a really dumb idea, and then a year on people started to understand it more. People saw validity in it, saw the impact that it could have, and saw that it was pioneering. We sold the worlds first digital couture item on blockchain in 2019, we had Forbes and the BBC reporting, but their headlines all said, ‘why would anybody spend $10,000 on a garment that does not exist’. What seemed like bad press eventually turned into good press as we headed into the pandemic.

In March 2020, our pre-seed round had just been green lit by Adidas, but that was also the day that we went into lockdown. 6 months later, that conversation was non-existent. There was so much insecurity, especially when retail and the physical fashion brands were suffering.

At that same time, we were getting calls from fashion brands across the world who wanted to learn about digital fashion and how they could use it themselves. One of the biggest fashion brands in the world called us up 2 weeks before their show and decided they wanted to present everything digitally. With such a short deadline we couldn’t digitize any of them, and that’s when they lost interest. They realized it challenges all the notions of their typical working methods, their processes and their culture.

In that summer we worked with Virgil Abloh at Off White, to fully digitize his collection, bring him into the virtual space and find a business model connected to that. That led to us raising our seed round at the end of 2020 which gave us enough capital to move us towards the product. Our product which democratized digital fashion built a platform for everyone to become a digital fashion creator.

We built that throughout 2021 before the NFT/Metaverse/Crypto hype started which gave us a good spot to be in; we had already been in the space before NFTs were calls NFTs in 2019. We raised a $14M series A round in the middle of that. But then in 2022, the big crypto platforms fell as they got a bad reputation for scams. We were dragged into that scandal because they knew we were doing something with blockchain but didn’t fully understand. Going from this hype with amazing potential to something which is seen as a scam was tough. But then things picked up when NIKE purchased a digital sneakers company, sending a really good signal. It’s been a true rollercoaster ride, we’re between series A and our next round where we prove our worth but we're excited to see what's coming.

How did you balance the need to raise capital with the need to maintain control and direction over your company's vision and strategy?

It’s all about relationships, your investors are invested in you. They’re not necessarily investing just in your idea, but in you as an entrepreneur. They realise that for the company to be successful, the person running the company needs to be set up for success. Typically, investors want to support as much as possible. Choosing the right investors is important, we’ve been lucky to have worked with the right investors who are nothing but supportive. They challenge us because they have outsider perspective, but it’s all about working together with them and including them in the business. You need to have the ability to be vulnerable with them when things go wrong, and this is what they want, it sets more alarm bells to pretend everything is always running smoothly.

Asking for help is important, they are an asset to set us up for success. Being transparent with communications often and setting up that framework is really important. They are your cheerleaders, and they will jump into help whenever you need it. We have person-to-person conversations about how we feel, not just looking at the data and seeing what’s there.

?? Listen to the full episode here:?bit.ly/3HeMJPH