This month we spoke to the CEO and Founder of Publons, Andrew Preston, about funding a startup in New Zealand. Their mission is to speed up science by harnessing the power of peer review. Publons works with researchers, editors, and many of the top publishers in the world to turn peer review into a resource for the academic community and something that reviewers can put on their resume.
Last year fifty thousand reviewers added 1% of the world’s reviews to Publons. They’ve recently closed an investment round from a top strategic investor and are hiring in both their London and Wellington offices (developers, get in touch). We sat down with Andrew, to learn about their funding journey and any advice he could offer to startups looking for investment.
Andrew Preston – (CEO & founder of Publons)
Can you outline the different stages of your funding journey with Publons to date; how Lightning Lab played a part and what has happened since then in terms of your funding rounds?
Lighting Lab was our first source of external funding. It was an opportunity to spend three months focusing 100% on the business, speak to investors, start making connections and having the conversations that became the foundation of our funding journey.
In the 2+ years since then we’ve been through three funding rounds. The first was helped greatly by the connections we made through the lab with NZ investors. Since then we’ve built relationships in our specific industry. Those relationships drove our most recent and largest raise.
What was the most challenging aspect of securing funding at any point for Publons?
In many ways raising a funding round is very similar to selling your product. However, if you look at the statistics, it’s clear that investors need to say no almost all of the time. That can be hard work. It’s kind of obvious in retrospect but I’ve found selling to customers much more enjoyable. You’re there to solve a problem for them so it is more rewarding and the success rate is higher.
How much preparation goes into putting together funding applications?
It takes a lot of work and is a big distraction. In my experience preparing and taking meetings can be a full time job for some months — although you have to keep doing your other jobs. So I would recommend allowing more time than you think you would need and be prepared for investors to ask you for something you might not have thought about. You don’t want to be the one slowing the process down because you don’t have enough time to get investors what they are asking for to seal the deal.
Apart from that, it is really hard to give generalist advice – basically everything else is specific to the company and its stage. In an ideal world you are preparing not only for this funding round but the funding rounds after it. Think about the bigger picture – identify what you will achieve with this round of investment and how it will add value to the business.
What learnings have you gained around forming solid investor/founder relationships that you could share?
Work with your investors and get to know them. Use your networks and any other thing you can think of to find the people that have passion for and expertise in your market. Early on they’re investing in you and your vision, so you really want to have a relationship before they put money into the business. That relationship comes from seeking out constructive feedback early on, and maintaining open and regular communication channels. Don’t underestimate the value you will get from these relationships in the long run.
That said, remember that this is your company and your vision. You will get lots of advice and suggestions along the way. This is a good thing. Consider it and incorporate it, but hold true to what you believe.
What advice would you give a startup looking to successfully secure funding for their venture for the first time?
Obviously the easiest route is to build something that people are paying for – the key thing investors are looking for is traction within your market. Beyond that, having a vision that you can articulate clearly and concisely. I’ve found that investors who understand the problems in our industry and buy into our vision are far more likely to be interested and engaged, so seek out investors who are actively involved in your space.
This interview is part of Straight Up – Creative HQ’s monthly startup resource e-newsletter that focuses on a different topic startups struggle with each month. March’s edition is all about funding.