Shopline’s Tony Shares How He Raised US$1.2M
1. How did Shopline fund itself at first?
When we first started the company, all founders chipped in some money to get it going, the total amount we put together was about US$10,000. The money was mainly used on rent at a co-working space, servers and digital marketing spending.
2. Let’s talk about the outside investment. Why did you decide to raise money?
We weren’t actively looking for outside investment at the beginning as we were just casually attending and pitching in events to get more feedback towards our product and business. Later, we realized that in order to develop the product and acquire customers at a faster rate, we needed money to expand our team and spend more on marketing. That was when we decided that we need to raise money to boost the company’s growth.
3. First investment. Where did this investor(s) came from?
Our first investment came from 500 Startups. We got an introduction to Rui Ma, partner of Greater China at 500 Startups, and we scored a meeting with her at a cafe back then. We initially went to her to ask her for advice, she liked our idea and gave some feedback to improve our product and business model. We kept in touch and after a few improvements, we started getting paying customers, for which she then recommended us to apply for the 500 Startups accelerator program in San Francisco. After a few rounds of interview, we got accepted and we had to fly to San Francisco within two weeks notice. The program was a very important step and growing stage for our team and came together with our very first investment towards our company.
4. Can you share what the fundraising experience was like? And were you nervous at your pitch?
It was hard at the beginning because many investors didn’t understand our product directly and we had to explain our positioning over and over again. We had to modify the story and angle a few times until we were able to communicate the message in a simpler way.
I wouldn’t say we were nervous to pitch but rather we were eagerly looking to get more feedback to keep improving our pitch. Every pitch was a great time to showcase ourselves and also a chance to look for more areas to improve. We believe in having an open-minded mentality and to always keep learning. This also proved to be one of our core values within the team even till today.
5. What was your elevator pitch?
Shopline is a self-served eCommerce platform localised for merchants in Asia. We help our customers launch and manage their own online shop. No technical or design knowledge are required, all the merchants need to do is to focus on their product and brand. The platform is fully localised for businesses in Asia, including native language, payments, logistics and customer support.
Shopline has signed up 60,000 merchants mainly from Hong Kong and Taiwan and has made strong local partnerships to serve its merchants. Shopline raised a US$1.2M seed round from Ardent Capital, 500 Startups and others in January 2015 and has exceeded its seed stage milestones. In April 2016, it raised a financing round from Alibaba Entrepreneurs Fund to fuel its next stage of growth.
6. What did you learn in this fund raising experience?
Aside from learning how to pitch to investors, I had a deeper understanding of the whole fundraising process and how much it takes to close a round. You may think you would know the whole process from listening to sharings and fundraising talks but it is actually very complicated. There are a lot of terms and documents involved that I have never heard or touched before. Also, the whole process involves a lot of back and forth negotiations and meeting with the right people; those who may share similar operational/ management experiences in the past, those who could give you real business advices, etc. They are the ones who could actually be helping you in the long run or connect you with the right people for your fundraising. On the other hand, you will have to prepare to communicate effectively what problem your product/service is solving and demonstrate that you can solve it. Again, this is all in your pitch and how you choose to communicate and what evidence you have to back up your message. Overall, it was a great learning experience.
7. One advice for entrepreneur who aim to raise his/her first outside money.
Never give up. Always be hustling and learning. Fundraising is a daunting task and it is often that you will face doubts and rejections during your pitch and talks with potential investors. They might not believe in your idea, so you need to develop a strong mentality to accept and absorb the feedback and rejection to keep moving forward and stay positive. Entrepreneurship is a long journey with many setbacks, more than you can ever imagine. But every time is an experience for you to learn and improve your pitch and better prepare yourself for next time.
Lastly, you should also stay focus on your product and customers. If you can fund your company with your customers as “investors”, that is the best thing that can happen to you.
This interview with Tony Wong was conducted and condensed by Selena Li of EntrepreneurHK.