Marketing Experts Reveal Top Strategies To

Arlen
Welcome to the e-commerce marketing podcast, everyone. My name is Arlen Robinson, and I am your host. And today we have a very special guest Asher Ismail who was named Emerging Entrepreneur of the Year in 2017. He’s led multiple startups and raised millions in capital from angels, VC, and crowdfunding. Prior to Uncapped, he was CEO at Midrive, General Manager at Moneysupermarket and part of the early team at Skype. Asher is also a Board Member of Tech London Advocates (TLA) and Founder of InterTech Diversity Forum, organizations dedicated to improving the strength and diversity of the UK tech sector. Welcome to the podcast Asher. 

Asher
Hey, thanks so much for having me really looking forward to the discussion. 

Arlen
Yes, I am. As well. You know, today we’re gonna be talking about how an e-commerce business can pursue fundraising. You know, it’s definitely a topic we’ve never covered before at a lot of focus, of course, on different marketing tactics, but there does reach a point in the life of many e-commerce businesses where they they’re gonna need to raise funds. You know, of course it’s not for every business, but there are definitely a lot of businesses these days where gonna reach a certain point where they say, okay, to meet our goals, we’re gonna need to raise funds. And so we’re gonna talk about a little bit about that and you’re gonna definitely enlighten us on that, but before we do get into all of that, why don’t you tell us a little bit more about your background and, you know, specifically how you got into what you’re doing today? 

Asher
Yeah, sure. So, you know, as you mentioned, I’m one of the, the co-founders on capped and what we’re really passionate about is that founders shouldn’t have to give away equity in order to fund their growth. So we provide, you know, fast, flexible funding to e-commerce businesses for marketing inventory or hiring without personal guarantees or dilution. My background is in startups. This is the third business that I’ve, you know, started over the years. And the biggest problem I always had was getting the funding I needed. So working with hundreds of e-commerce founders, you know, I’ve seen how they’ve struggled too. So for me, it’s a dream to get to work on a cap, cuz you know, every day I get to help other entrepreneurs get the funding they need. Our first customers were also my friends. So from the start, we really try to create a product that is really friendly. You know, it’s fast, fair, transparent, you know, it’s the part I wish always existed. We’re now in 22 countries, including the us, the UK Germany, Poland, Spain, our business has been growing exponentially. So deploying hundreds of millions of dollars and we actually now fund more businesses in a day than a typical VC will fund in a year. 

Arlen
Wow. That’s good stuff. Really good stuff. Yeah. One of the things that definitely kind of rang kind of a bell with me is I I’ve, I’ve talked to a lot of businesses in the e-commerce space, as you can imagine, over my 20 plus years in the business. And so I can remember early on the whole fundraising space was really daunting for a lot of businesses. And it seems like what you guys have created is just kind of more of a, a process where you can help guide these businesses through it, assist them with the fundraising, get them in line with the, you know, the VCs and really help them, you know, manage them through that whole process. Cuz I don’t think, you know, 20 plus years ago, I don’t think something like this existed. 

Asher
Yeah, absolutely. And I mean, you know, UN capped is really born out of the frustrations I faced when I was launching and running my first business. You know, I did my, my first business in 2003 and you know, I was young and I was just trying to raise a hundred K and I probably had a hundred meetings and got a hundred no’s. Wow. And you know, I did want to take financing from the banks because they all wanted personal guarantees sure. And venture capital, it wasn’t ideal either because you know, I didn’t have that track record or I didn’t have connections or that warm introduction. And so I just repeatedly missed out on growth opportunities. 

Arlen
Yeah. 

Asher
And you know, I came around to raising money for my second business and I thought I had it all figured out and I ended up raising millions in venture capital money. Okay. But then I also got terribly diluted. 

Arlen
Oh wow. 

Asher
And I just started to realize, you know, the options for me were really limited and it just seemed depressing. So depressing to think that you could work so hard and then own so little of my company. Yeah. So, you know, I thought it’s not just me. Right. Every growing business is often faced to, has to face this decision between raising either costly capital from equity or burdening themselves with traditional debt. And I thought there must be a better way. And you know, that’s where we started working on CA 

Arlen
Yeah, that’s good stuff. I’ve talked to so many different founders on the podcast and I’ve heard different stories where that whole must be a better way kind of mentality. It really goes into birthing really just a great offering, great products, great services. And it’s good to know that what you’ve created really came out of your need for it when you were on the other on kind of the other side of the fence as a startup business owner, trying to raise money in. So that’s where a lot of the great ideas and the successful businesses really come out of cuz it comes really out of a, a need that the founder has experienced or problem that the founder encountered, you know, in a previous life or so to speak. And so yeah, good to know that 

Asher
Agree. Yeah. I, I think the best way to build a business is that, you know, really understanding the customer and the problem. Yeah. And what a better way to do that than to, you know, go through the pain yourself. Yeah. And really do something that works for you. Right. So that ended being the case for us. And you know, then I ended up, you know, working with a lot of my friends who are, are co-founders and you know, really, really proud that, you know, a lot of them actually wanted to use us and it’s helped us grow because, you know, they’ve told more people and more people and that’s meant that we’ve really built our business really quickly. 

Arlen
Gotcha. Gotcha. Well, good stuff. Well, one of the, the first kind of directions I wanted go questions I wanted to ask is with fundraising as a business, I know there’s business has set, usually will have a set list of goals, things that they wanna achieve, the projections for revenues and profits that they wanna reach, you know, all these things they can forecast. But as far as fundraising itself, when does now e-commerce business know when is really the right time to raise funds, is there such a thing? 

Asher
So I think, you know, the, there’s probably two real RA reasons to go and raise money. The first is you have killer idea and it’s only partially validated and you need capital to get to product market fit. The second is you already have product market fit with real customers and real revenue, but you need capital grow and expand. And so it’s deciding which stage are you at. And if you’re, you know, if you’re at the earlier of that, you’re probably more in a seed stage. 

Arlen
Yeah. 

Asher
And that’s the kind of round that you’re raising. If you’re in a place where you have that product market fit and you’re actually seeing real revenues come in, maybe you’re more raising something like what we call a series a and where you’re, you’re expanding an existing business model with untapped. You know, I think also we’ve tried to think about it a little bit differently because you know, businesses don’t necessarily fit into, Hey, traditional model of I’m gonna raise this round and this round, you know, it’s instead, it’s actually thinking, Hey, we’re a great fit for you. If you’re doing at least 10 K of monthly sales. And the reason I’d say 10 K is because that’s the stage where you go from something that’s being side of desk, it’s actually something where you say, Hey, I can do this as a full time role. Cause you know, you’re making enough money that you can take off and actually start to pay yourself a salary. But if you’re doing that, you know, the other criterias we have is that you’re doing that for at least six months. And the rationale there being that now you have a history which is a little bit more predictable and it gives you that confidence that you’re in a space to actually take additional capital and really add that fuel to the fire and really grow that business. And that’s kind of the business that we are looking particularly to find is those ones that are at that moment, that they’re ready to scale.

Arlen
Okay. Gotcha. Now let’s say we’re dealing with a business that fits, you know, one of those categories, maybe they’re ready for this, the seed round, the funding, they’ve got a, an initial idea or product or service offering and it’s validated by the market. Then they need to kind of grow to really fully develop it. Or they’re the other way around. They have the product market fit, they’re selling it. They just need to take it really kind of to the next level. If they’re one of those categories then is there something that these businesses need to do prior to them looking to fundraise prior to them, to them let’s say approaching a company like untapped? 

Asher
Well, I think there’s a lot of things you can say about like how you can prepare generally for fundraising and like having your, your numbers in play, having the, you know, the key documents you need. And I think there’s, that’s really well documented. Sure. But I guess what I would say is the more important thing is having the right mindset because fundraising isn’t easy. In fact, it’s one of the most difficult and frustrating time draining activities, potentially that you as a founder are gonna undertake as part of your company’s growth. And I think early on, especially if you have a small team fundraising efforts can just consume way more time than you’d like them to. And I think if you wanna raise equity, especially, unfortunately there’s really no shortcut to that process. So I think one of the key things to do is, is to develop a fundraising mindset and it probably centers on a couple of different ideas. 

Asher
Like the first one is just about planning ahead because, you know, realizing that fundraising is a process and it takes time and it’s rarely quick or painless unless you’re, you know, those exceptional folks who can just go out and like raise around and are in, you know, lightening speed for most people. The earlier that they start the planning process and starting developing relationships, the better off they’re gonna be. And the more likely that they’re gonna avoid fundraising and desperation mode. The other thing I would say is that you gotta expect projection. So I think you have to really embrace rejection as part of the process and not take it personally because it happens okay. Sometimes for good reasons, for dumb reasons and many times for reasons that just forever remain a mystery. Yeah. So I, I think that, you know, those two things together really set you up much more for success. 

Arlen
Gotcha. Gotcha. Now you had mentioned the cases where a company is trying to raise funds, maybe kind of at a, at a desperation, so to speak or almost looking for almost kind of a lifeline. So to speak from an investor, that’s going to, you know, resuscitate them is doing something like that, a bad thing. Or have you seen examples of that actually working out where a business is, they’re really struggling. They’re not growing. And they feel that if, if they get an infusion of cash, it’s gonna give them a, a kind of a renew life is, do, do those types of situations often work. 

Asher
Well, I think for most investors, there’s usually two main drivers behind you in the early days about who they fund the first is FOMO, which is like fear of missing out. And then second it’s growth metrics. So when you’re fundraising and desperation mode, you’ve lost FOMO, right? Because you, you’re not gonna get that, that drive or that eagerness from investors, which is often critical to closing the first money. So now you’re in a mode where you’re depending on metrics, but if your metrics again are really challenged, that also is the hardest time to raise money. And that’s where probably you’re gonna end up being more diluted, cuz you’re gonna end up giving up a bigger chunk of your company because you’re not in the place where you have the leverage, you know, with that investor, you have multiple bets coming at play. So I think all that comes back to, you know, as well and your fundraising S really thinking ahead to understanding, you know, when is the time of year that you should be fundraising, what is your what’s your eCommerce, especially seasonality is like critically important, right? And so understanding where’s that moment in the year where you’re gonna be marks cash constrained. When are you gonna hit your biggest numbers? Probably in the golden quarter, right? Q4 is generally in eCommerce the, the hottest time. So probably shortly after that, you probably would be thinking, Hey, that that’s a good time to do around, but also making sure you’re doing that well ahead of the point where actually you are in desperation mode, right. So you’re raising from a place of, of confidence. 

Arlen
Gotcha. Gotcha. Now you had also mentioned like when you gave the example, when you were fundraising for the companies you were with prior to launching UNCA, where you may add like a hundred nos before you got that first yes. To prepare for something like that. Is there, like, I know that’s not uncommon of course, but is there ever a point where, and in your experience where a business has just received so many nos where you get to the point where it just, you, you kind of need them to say, all right, it doesn’t look like this is gonna work. You need to kind of pivot and think about doing something else. Does that all happen? Or do you always kind of keep hope alive so to speak, 

Asher
Well, you gotta learn from every no. Right. And you gotta read what the nos mean. So when someone says, says, no, are they, are they saying, no, it’s not the right opportunity for them or no, that there’s something that you can learn from, or is this actually one of those nos that says, this is just never gonna work. Right. And, and I would kind of say, every meeting is a form of practice that makes you better for the next meeting success or failure of one meeting. It’s never the end of your story. It’s just a step along the way. Yeah. So what you can do as a founder is learn from the past and you analyze what was said during those meetings. And you can learn quickly on how to improve your mistake. That’s the most crucial step for finding the right investor more quickly. 

Asher
And just like how you analyze your company’s metrics, you can keep track of how people connected with your pitch. You can write down all the questions you were asked, and it’s a really good way of ascertaining. Are there parts of that pitch that’s still ambiguous. And then you make sure you follow up on any information requests. And if you find you’re often asked the same question multiple times, Hey, that’s a good chance to consider. Should you incorporate that into your presentation earlier, really, really making sure that you are learning is, is the key. I think overall not only to fundraising, but is every day to actually being, building a better company. Right. 

Arlen
True, true. Yeah. Very true. Then that’s kind of what I’ve seen historically in a BI as a business owner and just in life in general, the best lessons are those are, that are learned from being rejected, you know, because that’s, yeah. When you have to really go back, rethink things and figure out, alright, how did I really fail here? What did I do wrong? How can I improve? And so, yeah, it makes, that makes total sense. You can’t really look at those rejections as a bad thing. So to speak, you have to look at ’em as, just as, as, as great feedback and yeah. If you’re willing to make the pivots and get that information and make changes in, and then don’t be take those things too personally then yeah. I think you definitely will be successful. 

Asher
Yeah. And, and, you know, I also just got super frustrated with all of that process, which is why, why we built on cap, right? We’re trying to pioneer this new approach to start up funding where you don’t need to go out and pitch where you don’t have to have a business plan or a presentation where, you know, we’re really connecting to the data that you use to run your company every day. So, you know, we connect to your Stripe account or your Shopify or your Google AdWords and off the back of that, we can make a decision in real time and it’s a data driven decision. So it removes so much of the bias that otherwise exists in the normal fundraising approach. Yeah. Makes, you know, if you’re, you’re one of those people who isn’t great at doing the pitch, maybe there’s also alternative ways to raise capital that weren’t existing, you know, back in my day. 

Arlen
Yeah. That’s definitely good to know. Now we’re talking about raising capital a business that’s on track to go over this particular route. How do they determine what is the valid amount to actually ask for and to try to try to raise 

Asher
Well, you know, I think that obviously depends on how are they gonna use the funds. Okay. So my general advice to founders is always to raise just what you need and you wanna raise the amount that links back to what what’s the use of that capital, because, you know, if you raise more than that, there’s a cost to it. I mean, it might be a cost of additional equity, which is kind of your golden goose. You know, the last thing you want to give away, or if you’re raising from, you know, a debt source, you’re gonna pay interest on that capital. So I think just being wise about, you know, how you think about your funding strategy is critical there, but I would say raise a little bit more than you think you need. Okay. Because, you know, as we know in life, there’s always the unexpected that occurs and, you know, cashes, can you always wanna have more funds in your account than be in a situation where you have less, because likely as an entrepreneur, that means you’re gonna miss out on an opportunity. 

Asher
And that opportunity is probably worth multiple of what that capital is, you know, for, for a cap, for example, you know, we charge a flat 6% fee on the capital that we fund. Okay. And most often the funds are used by companies who are saying, Hey, I have this big opportunity coming up where I have, you know, black Friday, for example, right. I’m gonna have more customers than I ever would have, but I need funding fast. Right. Because I need to order that inventory. I wanna spend on that marketing. And if I think about the relative cost of the fee versus the opportunity, it’s so obvious that that there’s a real possibility of missing out. Because say for example, a business has a three times return on ad spend, right? So for every dollar they put onto Facebook or Instagram, they’re getting 3 billion back. So for them paying a 6% fee, that still means they’re making 2.94. So you wouldn’t wanna, you wouldn’t wanna be in a situation where you didn’t have enough capital and you missed out on that peak opportunity. So it’s just thinking through what is the opportunity for you and for your business. And if so, making sure you have the resources to really capitalize on it. 

Arlen
Yeah. Yeah. Makes total sense. It’s just so it’s like, there’s no one size fits all as far as the amount, it really is gonna be individual per business, what their needs are, what are they looking to do for that CA with that cash? And yeah, it just has to be kind of right for them. So yeah. Thank you for that. You know, as we get ready to, to wrap things up, what I wanted to kind of pick your brain on is if you can enlighten us on some examples of some e-commerce businesses that you, you either dealt with and uncap, or that you’re generally unfamiliar with, that have raised funds and what were some of the lessons that they learned from that process? 

Asher
Yeah, absolutely. So I, I think, especially now, there’s really interesting examples of how people are using capital and thinking about it in slightly different ways. I mean, you know, we funded companies that are bootstrapped and taken limited investment. We’ve also, you know, seen our model work for like DC VA companies that just wanna raise in a more affordable way. But I think like one of my favorite examples is one of our first customers. They were a sustainable fashion brand called headwind and like so many eCommerce founders that work in fashion, they had to juggle cash between inventory and marketing. So basically they would have to wait till their current season with Sal so they can invest the returns in the next. And it just really limited their growth. And Alex and Anna are the founders of this company and they’re incredibly savvy founders cause they both came from finance backgrounds. And so they looked at like all the different options from like VC to venture debt, but they wanted something more affordable. And then we ended up giving them, you know, 50,000 pound advance at the, at the end of the year and they use the funds to increase their inventory. And with that new funding incredibly they saw in the first quarter, the revenues grew 11000% compared to the previous year. 

Arlen
Okay. Wow. 

Asher
And it’s incredible, right. To think that like, you know, when you have the right business model, the right founders and now you unlock the capital, if they need, they can actually just get so much more growth. And so like, those are the stories that like we love to fund. And I think we’re also seeing other examples now where, you know, businesses, especially in our current times, right where supply chain has never been more challenging. Right. And I think it’s only gonna be more challenging as we come to this next period, given where given where the global market is and potential increased costs of supply due to cost of oil. Right. Just rising massively at the moment. So I think founders are gonna have to be more thoughtful about actually have they managed that supply chain and some great examples I’ve seen is founders realizing about that right now and sort of take a look at that opportunity and turn that around actually into something that generates profit. So, you know, for example, one of our customers, they, you know, previously they suffered from the fact that they didn’t have enough inventory in the previous period due to all the supply chains that are happening. So what they did now is they went to their supplier and they negotiated getting, you know, doubling the amount of inventory they would normally have, but got a 10% discount. 

Arlen
Okay. 

Asher
Wow. And then, you know, they borrowed the capital from us at a 6% fee. So actually ended up taking something that was a drain on their business and made it into a net gain. 

Arlen
Gotcha. Gotcha. 

Asher
And so I think, you know, founders in eCommerce, I think can be really smart about how they use capital so that they can unlock opportunities like that. And you know, we’re really keen to support that. 

Arlen
Yeah. That’s good stuff. And yeah. Thank you for sharing those real world examples. So yeah, that last example definitely is a kind of Testament to the fact where there’s no kind of one size fits all, you know, they, they did something a little bit of creative, they raised funds, they got their supplier to reduce the costs and that worked for them. So yeah, this seems like there’s, there’s a lot of things that you can do with the cash. Not only raising cash help, but you do of course have to look at like O other things, like you said, suppliers, where can you cut costs on that? Things like that. And so, you know, the cash can definitely help, but you, there are a lot of other things in play that you have to consider, especially in our, in our ever-changing world right now that we’re in right now, we have to anticipate, you know, some changes on the horizon. 

Asher
Absolutely. Yeah. And, and being an e-commerce founder, it’s tough, right? Because you have challenging terms from your suppliers you’ve got seasonality to deal with, but on the positive side, if you have something that works, you can see at business scale incredibly fast, like, you know, we’ve worked with entrepreneurs who have, you know, reached millions of sales monthly with a five person team. And I think that’s the amazing and beautiful thing about e-commerce. Right. So if you can tap into the right opportunity and really go for it, you can, you know, get, create incredible results. 

Arlen
That’s awesome. Well, thank you Asher for sharing all that. I, I definitely learned a lot. We appreciate you coming on and telling us about fundraising. Cause like I said, it’s definitely a subject that hadn’t really dived into much on the podcast, but I know there’s a lot of business owners and listeners that are thinking about that route. And it’s good to know that there are other options available other than the traditional route of trying to finesse VCs independently on your own there’s companies like yourself, UNCA with uncap, that kind of make that process a little bit easier and have a little bit of a change of as far as what you guys are taking, which is just that flat 6% rather than taking equity in the company, which definitely makes a difference, especially for, for young starting companies that really aren’t in a position to give up any equity. 

Asher
Absolutely.

Arlen
All right. Last year. Well, I always like to kind of switch gears here. My last closing question, just so our audience can get to know you a little bit better. If you don’t mind sharing one closing fun fact about yourself that you think we’d be interested to know 

Asher
A fun fact. Well, I recently completed one of the longest commercial flights in history. So I just, I just got back yesterday from Australia. Okay. And I was flying from Darwin to London and the quickest way between Darwin and London is a straight line that goes over Russia. Okay. So as you can imagine, you know, the, the flight of course needs to be rerouted slightly, right? Usually enough they rerouted the flight over Iran. Okay. But basically hours before our flight was supposed to take off another war started or another situation start to break out in Iran. And so I was on, I was waiting in the airport and they started saying, well, actually, unfortunately we’re gonna have to reduce the weight of the plane because the plane’s not gonna be able to make it that far with this level of fuel. So, you know, they had to say 30 passengers were gonna be offboarded along with their luggage. So it was like a little bit like an episode of survivor where we were sitting in the airport and for calling out names, everyone hoping it’s not them. So I actually made it onto the flight, but you know, obviously taking a very unique route to get back to the UK. And so yeah, it actually ended up becoming one of the, the longest flights I think on record for a commercial direct. So yeah, that’s my, I dunno if that counts as a fun back, but definitely very recent recent experience 

Arlen
Def definitely a fun fact. Yeah. Long commercial flight. Well hopefully with that long flight, you had some good seats and good flight crew. Cause I know these days, you know, it’s, they’ve scaled back quite a bit on the airlines as far as the amenities, you know, unless you’re paying for the, the first class or business class, it, it can be a little tough. 

Asher
Oh God, no, I was in the cheap seats, but it was fine. Luckily enough though, that they had taken the 30 passengers off the plane, which had a roomier plane. So I actually got three seats to myself, but it all worked out in the end and, and I think they also hopefully made it, they got into another flight. So, you know, in the end it probably great for everybody in some sense, probably not the best of the airline, but yeah, we all, we all made it up. 

Arlen
Okay. Well that’s awesome. Well thank you for sharing that fun fact as sure. I appreciate that. But lastly, before we let you go, if you don’t mind letting our listeners know the best way for them to contact you, if they’re interested in fundraising or they want to, you know, pick your brain anymore. 

Asher
Yeah, sure. So, I mean, one way is you can follow me on LinkedIn. So every week I released like new content about helping founders think about building a company, but also fundraising in particular. So that’s one way, but I’d also, I had a little bit of a special offer for your listeners Ireland, basically, you know, if, if you run an e-commerce store and you’re listening and you’re doing at least 10 K per month in sales and either wanna, you know, scale your campaigns faster or purchase inventory, you know, we’d love to help it untapped. And last month we ran this super successful campaign where we funded hundreds of store owners and we gave them up to 50 K absolutely free. So no fee, normally we charge a 6% fee, but last month we did it for exactly zero. And you know, on our website, you won’t find mention of this anymore. It’s gone, but we thought, you know, for listers of your podcast, we’d be ready to make it happen again. So all you have to do is reach out to [email protected] with the subject line, secret 50 K and a bit about you and see if you qualify. Okay. So, you know, do it now, you know, don’t wait, it takes like three minutes and we’d love to hear about your store and potentially help you get some more funding to celebrate your growth. 

Arlen
All right. That’s awesome. Well, yeah. Thank you for, for offering that to our listeners. Definitely encourage them to reach out to you if they, they fit that criteria and cuz yeah, you, you can’t beat 50 K with no strings attached on that. I’m sure that can help many of the listeners of the podcast. So definitely encourage them to reach out and thank you for offering that again. 

Asher
All right. I hope so. Thanks so much Lin. It was really great to speak with you. 

Arlen
Awesome. No problem. Ash shared is awesome having you today on the e-commerce marketing podcast. 

Asher
All right.  

Speaker 1

Thank you for listening to the e-commerce marketing podcast. 

Podcast Guest Info

Asher Ismail
Co-founder of Uncapped