The startup world of funding can be tricky to navigate, with angel investors, seed funding and venture capital all a huge part of the process. But, is funding without external capital possible? We speak to WOAW founder Joe, who has proven so.
WOAW is a London-based personal branding agency that has never taken a single dime in funding and is now achieving annual revenue of £1 million.
Founded four years ago by a then 21-year-old Joe Binder, the business has grown exponentially during the pandemic. It now has seventeen full-time employees, and plans to expand threefold within the next twelve months.
WOAW’s client list boasts some high profile names, including Dragons’ Den’s very own Sara Davies MBE and Vitabiotics CEO Tej Lalvani.
But how did the company become so successful without a single penny in external funding driving growth?
We spoke to Joe about WOAW’s incredible success story, and how it dispels the commonly held belief amongst the business community that external funding is the only way entrepreneurs can advance with their business.
See our guide to 10 Ways to Fund Your Business (Without a Bank Loan)
Interview with Joe Binder, founder of WOAW
What is personal branding, and how does it work at WOAW?
Personal branding is the process of scaling your personal reputation online. Our clients are at the helm of high-growth companies, and we help build their personal brands as assets, so they can in turn leverage that asset for the purpose of their business.
We’re not here to get anyone cheap likes on social media, we’re here to help good, innovative and inspiring business leaders effectively build and manage their online reputation on social media.
How is it that you’ve achieved £1million annual revenue, seven months ahead of schedule, without any external funding by angel investors or VCs? What is your secret (if there is one)?
I’m incredibly proud of the team and the fact we’ve hit this milestone – but I want to be totally transparent about the context.
I started WOAW with a very robust safety net. I had a degree, some good work experience and a home to live in without having to pay extortionate London rents. So, with my story in particular, there was a foundation from which I could start from – particularly with regards to not taking funding – that allowed me to do it this way in the first place. That’s often missed from the narrative, but it’s such an important point.
To answer how we achieved this several months ahead of schedule, there are a few points that stand out. Firstly, the team at WOAW. I’ve made a tonne of mistakes with how I give people feedback, how I operate generally and so on, and I’ve been fortunate enough to have people around who – rather than thinking ‘this guy’s inexperienced, I’m outta here’ – stuck with me, were patient with me as I learned and, most importantly, gave me very direct feedback as to how I could improve.
Secondly, I’ve been able to learn from our clients. The self-made ones who are now seen as Britain’s biggest success stories. The ones who are building the UK’s next unicorn. Having such close contact with these people allowed me to learn how they do things, see the energy they bring to our meetings, and see how they communicate. I’ve then had – in the space of hours – the opportunity to try to be more like them, and I’ve noticed that a lot of the time, trying to be a little more like them has been a very good thing.
Secondly, I’ve been able to learn from our clients. The self-made ones who are now seen as Britain’s biggest success stories. Having such close contact with these people allowed me to learn how they do things, see the energy they bring to our meetings, and see how they communicate. I’ve then had - in the space of hours - the opportunity to try to be more like them, and I’ve noticed that a lot of the time, trying to be a little more like them has been a very good thing.
The final point is on processes: something I used to worry about because I didn’t know what they meant or how to set them up. If you find yourself repeating the same feedback more than three times, it’s probably because you haven’t trained well enough. So, the process becomes adding training for that particular piece of feedback, and ensuring everyone completes it.
If it takes you an hour-long call to decide if a potential client is a good fit for you, you could create an ‘ideal’ client. So, the process becomes qualifying a potential client before arranging a call. This thinking, across the entire business, has allowed us to quickly learn, bring the team up to speed and improve how we do things.
Do you believe this kind of self-fuelled growth is achievable for all startups, and if so what advice would you give to help them on their journey?
This does depend a lot on an individual’s circumstances, but I’ll give this question my best shot. If you’re starting a business without external funding, you will be meticulous with finances – even if you don’t consider yourself to be good at maths. It will happen, because it will have to happen.
This reality has set me in good stead now when we do have more cash, generated by the company itself, to spend and invest. We spend money, but we don’t spend it wastefully.
We spend money, but we don’t spend it wastefully.
What helped you get here?
Team. Team. Team. This has become such a cliche in business, but it’s a cliche because it’s true. Here are some specifics to break it down. As WOAW started to grow, I had to become less involved in communicating with clients. In creating content. In creating and re-creating client strategies. So it stopped being about how good I was at those things, and became how good the team were at those things. This is a really exciting part – finding people much better than me to take on these roles.
How do you want people to feel when they read this interview?
I remember so many occasions in the early days where I’d read articles like this about other young entrepreneurs. I often felt pretty low after reading them. I was on the introduction of my journey and they were on Chapter 7 of theirs.
The one thing I don’t want people to take from this interview is a feeling of self doubt or any ‘he’s making progress and I’m not' sentiment. Instead, see it through the lens of where you’re at now. If you're in Chapter 1 of your journey, or even the introduction, come away from reading this article thinking ‘Chapter 4 looks exciting, I can’t wait to get to that part’. That’s what I do when I hear stories about entrepreneurs in Chapter 15.
The one thing I don’t want people to take from this interview is a feeling of self doubt or any he’s making progress and I’m not sentiment. Instead, see it through the lens of where you’re at now. If you're in Chapter 1 of your journey, or even the introduction, come away from reading this article thinking ‘Chapter 4 looks exciting, I can’t wait to get to that part’. That’s what I do when I hear stories about entrepreneurs in Chapter 15.
What can we expect to see from WOAW over the next five years?
People who started in junior roles will be leading departments, and they’ll do such a brilliant job. We’ll still laugh uncontrollably in the office, we’ll still deliver exceptional services to our clients and the team will still rip me for my poor fashion sense. To summarise, we’ll be the best personal branding agency in the world and we’ll have a lot of fun along the way.
Top tips for entrepreneurs?
- Imagine watching your loved one run the marathon and they’re running out of energy – all you want to do is spur them on and encourage them. Over the past four years, there have been very high points but also some lows. I’ve learned that the whole thing becomes easier – and feels nicer – when you give that level of energy and encouragement to yourself.
- Find positive influences and invest in those relationships. I used to hear this advice all the time but I never truly understood what it meant. It’s not about replacing the people close to you with people you think are more ‘like you'. It’s about finding people that share your values, your ambition, people that you feel good around. If you leave a conversation with someone feeling positive, try to spend more time with that person and try to be that person to others.
- Keep perspective. It’s going to be awful at times. The more challenges you have, the better you’ll get at dealing with them. So, keep in mind when you’re going through a tough phase: it’s a tough phase and not permanent. Treat it like a bad hangover – there’s nothing you can do that can stop you from feeling bad, you’ve just got to wait it out with the knowledge that you’ll wake up tomorrow feeling better.
How else can you fund your business?
Not all startups are in a position to be fuelled by high client retention rates like personal branding agency WOAW.
Many businesses like yours may need more than just bootstrapping to get off the ground, so where does that leave you and your business and what are your funding options?
At Startups, we’ve put together an insightful feature gathering 10 ways you can fund your business (without a bank loan). To summarise, these are our top ten:
- Savings/family loans
- Bank overdrafts
- Business grants
- Invoice finance
- Community schemes (CDFIs)
- Crowdfunding
- Business cash advance
- Asset finance
- Peer-to-peer (P2P) lending
- Organic growth
The funding journey: what have other startups experienced?
WOAW founder Joe’s experience of raising capital without external funding is hugely encouraging to business owners everywhere.
But what about other startups that went the external route? What did they discover when trying to raise funds for their business venture through angel investors, venture capital investment, and Series A funding rounds?
We spoke to a number of businesses across different industries to gain insight into external funding.
“In a word: terrible. VCs demanded board seats, stocks and liquidation preferences, and insisted on special rights dividends regarding shares. One even had the audacity to tell me the business would never take off while he tucked into a lobster dish at a fancy restaurant.
Despite the pressures of founding a startup, we decided early on we’d never agree to any VC demand. When we did raise in 2018 via crowdfunding, many VCs were interested in getting involved but we told them that, if they wanted to be a part of 3S Money, they would be treated like everyone else in the community who wanted to back us. Three of them joined the round.
The start-up and venture markets have evolved. Crowdfunding platforms mean you no longer need ‘industry experts’ to invest in your company to be successful. Start-ups can now thrive because they have a community that cares about the social impact of their investments.
Ditching VCs has not hindered our growth or expansion efforts. In under 3 years, we have become profitable, grown 400% year-on-year, and now help businesses send, collect and exchange money in 190 countries.
VCs need to change their behaviour and adapt to keep up with the market, or they risk falling into insignificance.”
“The investors you choose early on show what you stand for and tend to stay with you for a long time so it was crucial for us to find investors that shared our values and vision for the business. We (Vaayu) chose female-led CapitalT to lead our pre-seed investment round not only because they could plug a key skills gap and provide useful guidance, but also because they understood the very specific challenges facing female founders so we quickly aligned on a shared set of personal values too.
The fundraising experience was stressful in as much as it’s not an agreement to enter into lightly, not least of all while running and growing the business day-to-day. Therefore, my advice for founders is to be frank with investors. Be specific about what you’re looking for, be honest about how you want the business to grow and be prepared to walk away until you find the right investment partner. CapitalT has respected our expertise and supported our decision-making while providing advice along the way and that mutual understanding has enabled us to stay on track, expand our product offering, make key hires and scale up our client portfolio.”
“Fundraising is tough. But it makes you more resilient, which helps you build a better business in the long run.
For me with VenueScanner, the fundraising challenge differed at each stage, In the early days, the biggest challenge was knowing who to pitch to. I didn’t know any angel networks and had no contacts so there was a lot of cold calling and outreach on LinkedIn which was followed by a lot of rejection. It can be hard to take but I knew we had a great product, a great business model and a great team, I just needed to find the right fit for us. So don’t give up. Identify who you think will be a good fit for your business and then don’t stop until you get in front of them!
In every pitch you go to, you’ll be asked difficult questions. About your business model, your revenue, your people, your leadership style, and everything else in between. By tackling these questions, you will learn, improve, and become stronger as a result. So even if you experience a difficult pitch that comes to nothing in terms of investment, it’s always worthwhile because you will become a better leader.
The UK entrepreneur community is a strong and vibrant one. Don’t be afraid to seek advice from other founders about the best type of investor for the stage your company is at. I joined the International Conclave of Entrepreneurs (ICE) which is a network for tech entrepreneurs in Europe and it has given me access to a wide range of incredible people who I learn from every day.”
“Series A funded a major change in the way we (Seldon) generated revenue. Previously, most of our income came from paid support relationships with enterprises using our open-source tools, but we were determined to instead move towards an ‘open core’ model, which would see a paid product sit alongside our open-source software.
Making this a reality meant substantially building out our team of world-class talent. We had to continue hiring exceptional data scientists, ML engineers and developers, while also ramping up our sales and marketing function. We’re operating in a rapidly growing and competitive market, so to maintain category leadership we had to scale our operations quickly, which required a change in mindset around the Series A to help us deploy capital as quickly as possible.
Lockdowns posed some challenges with travel restrictions forcing a switch to a virtual fundraising process, and our whole team is delighted by the outcome and the new partners we have onboard. We built a huge amount of trust with our lead investors who gave us the confidence to lean in and not lower our funding objectives.
By the middle of 2021, our product revenue had grown to about 90% of our income. In addition, not only did we triple our headcount last year, we also built a dedicated US team from scratch, and are on track to significantly increase our product revenue yet again this financial year.”
“The funding experience is tricky to navigate. Throughout my career, I’ve seen a recurring, unwarranted expectation that regardless of the business proposition, founders feel they deserve investment. They’re sometimes surprised that people don’t just hand over large chunks of money for their idea.
However, when they’re over this hurdle, then of course comes the hard slog of refining the pitch and product, coming up with a sound business plan, raising enough to build something, getting traction, only to repeat the process again.
Evidently, pitching to investors is hard and we have data to prove it. In our recent research, we found almost half of founders found finding the right investor the hardest part of fundraising and founders continue to struggle to get investors to commit in the traditional pitching process.
At SeedLegals, we’ve worked with 30,000 companies who have previously found the same problem regardless of stage of investment. That’s why we have products in place such as SeedLegals Pitch that provides a platform for a business to concisely showcase their company and fundraising goals to potential investors in one place, and Series A+ which allows for founders to complete their larger rounds seamlessly.”
via https://www.AiUpNow.com
January 17, 2022 at 12:11PM by Ross Darragh, Khareem Sudlow
