We recently completed a funding round for Spaces by Cerulean Labs.
As a pre-revenue start-up, capital raising represents a vital form of validation while recognising the increased risk the investors at this point are taking.
The process took around six months, with the first three months putting feelers out into the marketplace and making initial introductions.
To keep the business operating, we opened the round to existing shareholders and a handful of new investors while landing the bigger fish.
While we raised the majority of funds from four New Zealand Angel Groups, the process was reasonably straightforward with Ian Frame for Launch Taranaki and then Graeme Thomson from Manawatu Investment Group taking the lead to manage the internal processes with the Angel Groups.
In the end, we managed to get everything over the line with only a handful of Zoom meetings – I’m based in Budapest and the Angels are all New Zealand based. However, outside of the meetings, the efforts were a lot more time-consuming, with extensive materials and several top quality QA sessions.
The last part of the process was essentially mechanical with all the documentation and was more an administration task.
Having completed the process, with the money now in the bank, we have the runway to support our upcoming commercial launch.
Capital raising is a process that start-ups need to focus on regularly and well in advance of when funds are required. That said, Iâ€™m looking forward to a slight pause from capital raising where I can focus on our business goals.
In August 2020 following six months of research, development and prototyping I founded Cerulean Labs with the aim of reinventing conceptual design for architects. This is a lofty goal and one that will take a number of years to see come to fruition.
However, today marks a major milestone in our early journey with the release of our first public beta.
As a team we are proud of what we have created to date but equally appreciate we are only just starting to scratch the surface what we plan to develop.
Spaces combines ideas from a huge range of people and investigations that have helped shape this first beta. Now we are excited to get a broader group of users signed up and using the software so they too can help shape this tool.
Spaces fills a void in the marketplace and we are focused on making it simple and easy to use.
As previously posts have highlighted creating a new venture is a rollercoaster of emotions and a constant juggling act. We could have taken a slightly ‘easier’ road and spent a few more months developing our first version before engaging with users but creating a tool that no-one uses is not our plan and we are excited to get our app into your hands and gather feedback, both positive and negative, and work hard to deliver regular updates and enhancements over the coming months.
The whole report is worth reviewing if you are in the B2B SaaS business. Some of the key things I was interested to review include:
Optimal Number of Plans
I’ve always had a gut feeling that 3 was the ideal number of plans. I’m not quite sure where it came from but maybe it was from browsing a number of payment pages when I first looked into offering Subscription.
Free Trials definitely appear the way to go with over 80% of companies offering some sort of free trail.
I was surprised however, that over 60% of free trials request card details up front. This is always an interesting debate as to whether asking for details up front presents another hurdle, however, in a sense it also most likely leads to higher conversion so there are different trade offs to measure.
That said, Freemium is used extensively to grow ARR in the $100m – $1B range [ nice range 😉 ]
The reference to this article regarding “Monetizing backwards” still reinforced my thinking though.
Annual vrs Monthly
This one was more surprising especially with regards to the over 40% who don’t offer annual plans. I’m a firm believer that having annual and monthly payment plans help create a natural balance of lowest cost of entry, versus longer term customers.
Though that said, my own experience when introducing ArchiCAD Subscription was that I felt monthly was sufficient. Mainly because the entire exercise was to reduce the barrier to entry, and an annual pan would have been still too costly for the part of the market I was targeting at that stage.
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