The Muse is a rapidly growing women-owned startup, which provides online job listings and career advice for today's millennials under 35. The Muse offers much more than your average job search; they help over 5 million users make more conclusive decisions on their career prospects by providing expert advice, job matching, and actionable content. The platform is a great resource for job seekers who want reassurance that the career they may have chosen is right for them.
I had a moment to sit down to speak with one of the co-founders of The Muse, Alex Cavoulacos, about her advice on raising capital to fund a high-growth concept. The growth of The Muse since their launch in 2011 has been amazing. They have raised almost $30 Million according to Venture Beat, with investors such as Aspect Ventures' Theresia Gouw and Jennifer Fonstad, Tyra Banks and Nancy Pfund of DBL Partners.
Raising capital is a committed and intensive process of pitching your business to several investors, while highlighting the value proposition of the concept. Alex provided three useful strategies that you need to consider before you dive into the world of venture capital to grow and expand your business.
Alex says, "there is dreaming big; then there is pitching big." This was a lesson that I had to learn the hard way earlier in my journey. Conservative and safe forecasts will lower the value of your concept, and are often overlooked by investors seeking a cash on cash return and clear exit strategy.
"Rather than speaking about what you are working on today, focus on how your business or concept is a world changing idea," says Cavoulacos. "If you are looking for an investor to put in a large sum of capital in your high growth start up, you need to speak about the huge revenue and growth potential."
Rejection Is Okay
Alex says, "You have to manage your own psychology as an entrepreneur and every founder encounters the word 'no' numerous times when raising capital. In the fund-raising process, you will hear the word 'no' more often than 'yes.'"
Do not let rejection stop you. The right investor is out there, be patient. "Use the rejection to assess what you are offering -- whether it is your pitch, the investors you are contacting, maybe your business needs to show more traction, etc.," Alex added.
Rejection is a huge, and often silenced, part of fund raising for business. Most successful entrepreneurs do not discuss how much rejection they faced before finding the one that made an offer. Be prepared for the rejection ahead; but remember, it only takes one decision maker to believe in what you offer.
Own Your Vision
Investors may advise you to change your ideas, but remember it is your vision. "You can take the feedback and make changes along the way, but own your vision. You should only make changes based on what you believe is useful," says Cavoulacos.
She recalls in the early part of raising capital, investors were confused about the concept of The Muse. "Either be a job board or a publication [they suggested]. But you need to decide." She stated, "We could have easily followed their advice and eliminated part of the concept, but we would have created a job board that was in a competitive space and different category, rather than a disruptive space."
Alex added that they were listening to the advice of their users and the concept had value. They knew that the feedback from some of the investors they pitched early would not work for their model. "Make sure you test your concept and own the vision."