The Story Behind SGNL Raising $22M in Venture Capital
As some of you know, I recently got to talk with Scott Kriz, founder and CEO of SGNL about his $10M round closed back in 2023 on my podcast Funded.
For those of you who don't know... Scott's an impressive dude. Not only has he closed $22M in Funding for SGNL in the past 2 years, this is also his second time running a venture-backed company. His previous venture being Bitium, a cloud based identity platform acquired by Google back in 2017 (which he successfully raised $15M for).
As you'd assume, we had a great conversation. If you're not going to give it a listen, the least I can do is give you some of my takeaways...
Calm Confidence Never Hurts
“There were other investors too, that we wanted to bring in from the past. Some of them we were at too high of a valuation without having anything, but I still called the ones that were early in value add for us and just let them know, "Hey, I know this might be out of your range, but I just wanted to make you aware that there's room for you if you're interested.”
There are a lot of comments I have from this part of the conversation but I wanted to make sure I double-clicked on the quote from Scott above.
A common question that I get from a lot of founders is if it's worth it to reach out to previously interested investors. The next most common question I get is: "How do I do that without sounding desperate?" I think Scott does a great job of explaining it.
Even if you think they won't be interested or won't be able to invest, just send the message. Make it feel zero pressure. Your goal is to make them aware of your process and that you think they're great. That's it.
Even if they aren't interested or it's out of their range, it's always a win when you push yourself back in to an investor’s mind.
Backwards Tracking Mindset
"You do the backward looking and say, if you need to get to a certain milestone, how do you get to it and does it require capital to get there? And for us in the industry that we're in and the competitors that we have, which are some of the largest companies on the planet, we felt that one of the things that we needed to have in order to achieve our goals was to get the right team. And to have the right people is not cheap."
I put out a tweet recently sharing that I think every founder should be raising to get to one of these two things:
1) Breakeven/profitability
2) A version of the company that can raise more money (aka hitting an important milestone)
The thought process behind raising as an early-stage founder should never be "I have this great idea that I think could be huge! I need to raise money in order to make it happen."
Practice doing what Scott did - backtrack. Where are you trying to get to next as a company? How do you get to it? Do you need extra funding to get there? If so, how much? If you can answer all of those questions, you will be able to create a KILLER narrative for your raise instead of having vague answers that end up crushing investor interest. VCs need to know that you know where you want to go, and what you need to do in order to get there.
Running a Venture-Backed Company is a Long Journey
"The reason you fill the gas tank is because you have a long journey in front of you. And so that's where I tend to focus. What does that journey look like?"
I love this analogy. Let it be a reminder that running a venture-backed startup is not for founders looking to get to a quick outcome. Investors are looking to find companies that they think will be absolutely gigantic with massive returns 10+ years from now.
So - if you are going to commit to this, really commit to it. Investors will recognize that as well.
Alright! That's a wrap. This is a tiny pinch of all the knowledge Scott shared in this podcast episode. Make sure to give it a listen to hear:
- How Scott raised $22M in under 2 years for SGNL
- Insights from running 2 venture-backed startups
- Why he chose to raise a $12M seed round
and more! I'll leave the links below:
Listen here:
Scott Kriz
SGNL
Funded
Sponsor
Be chased,
Jason
