So, just how much are pizza-making robots worth?
Last November, Zume Pizza co-founder and CEO Julia Collins got a pretty good estimate when SoftBank invested $375 million from its Vision Fund in her Mountain View, California-based automated pizza delivery company, valuing it at $2.25 billion. Other backers of Zume Pizza include AME Cloud Ventures, the investment firm by the co-founder and former CEO of Yahoo Jerry Yang. All told, the company has lassoed $425 million in funding so far, according to Crunchbase.
The startup uses automated machines, like a sauce-spreading robot named Marta, to make pizzas via an assembly line, slicing the pizza making process down to just one human worker to spread toppings and do a quality control check. Zume Pizza says the speedy process cuts delivery times down to five to 20 minutes to customers in the Mountain View area.
At the recent Black Women Raise conference, a forum in New York City focusing on the specific challenges black women face in trying to raise capital for their businesses, Collins presented what she wishes she had known from day 1 about the subject and about business in general. Here are her top three tips for anyone looking to use outside capital to grow a business:
1. Describe the big picture for investors.
Less is more when giving your elevator pitch or talking about your business, Collins says.
"What worked was leading with the vision," she explained. "'I want to save the planet; I want to feed the world'-- that grabbed people's attention more than 'I want an automated platform to feed others.'" Investors want to invest in the next world-changing idea; bring them in with that. Save the details for when you seal the deal.
2. Befriend investors before asking for money.
What's easier, asking your friends or a complete stranger if you can borrow $20?
That's Collins's thinking when she suggested prioritizing relationships with investors over asking for capital. "Do soft circling," Collins advised. "Before you raise, you want to socialize your presence in the market. You want to go and have lunch and talk and get to know [investors] before you ask for any money."
Even if they don't invest in your company, having investors in your network can serve you. By association, you'll better understand their language, needs, and wants. You'll also feel more comfortable being in a meeting with them, Collins explained.
3. Pay yourself a reasonable salary.
Prior to Zume Pizza, Collins served as CFO of Mexican and barbecue fusion restaurant Mexicue. After not paying herself for two years, she felt burned out and had to step back. It was then that she learned an important lesson: It's OK to divert some funding toward paying yourself so you can make it to your next series.
"The journey of being a founder is very taxing," Collins said. "What I didn't know is that when you raise money in rounds, it's appropriate to take money from the table. You should negotiate a way to sell some of your equity in order to build yourself a cushion." When you're secure yourself, that tells investors you have a secure business to invest in.