Find your investment thesis mate
The fifth episode of “Fund your way” delves into the story of Ivan Maryasin (Co-Founder and CEO of Monite) and his experience of raising a $5m Seed round for Monite. Monite lets B2B brands embed Invoicing, AP Automation, Expense Management into their existing interface.
Monite is the first startup that Ivan founded. Before that, he successfully worked as a growth specialist 📈 in many startups in the US and EU, including a C-Level position at Penta — a digital business bank account provider from Germany. Ivan always had a curious mind with a strong interest in getting to know new people and building networks.
“I am an interconnected loner, I prefer carefully building up my own network of people rather than being a part of existing ones,” says Ivan.
Ivan loves watching TV shows with bigger picture scripts about the CIA or conspiracies which helps him detach from reality for a bit.
Ivan adds that “you can see that there are more complex problems than your everyday work-related stuff, so you should just focus on your issues and solve them.”
Ivan is an efficiency enthusiast and wishes he could slightly tweak as many trigger points in society as possible, so the relationships and processes will be improved.
The initial idea for Monite came from Ivan’s time at Penta, where he thought of and tried implementing additional features to the product offering to help the growth. He deeply analyzed the industry and saw a gap between global best practices and what was the product of the company he worked for back then. However, given the differences in customers’ behavior across the markets, it soon became clear that it was not possible to build a product that Ivan visualized on the basis of only one bank. Instead, he started building his own open-banking solution for SMEs as an additional tool that should have been added to the tech stack of customers.
The first interactions with clients and their feedback though showed the downside of such direct approach to solving the issue. There were already a lot of software tools SMEs used to administer and manage finance, many of which had well-established brands and large customer bases. And even though the product Ivan and the team at Monite were building was complementary to the offerings, it was complicated and costly to get to a lot of customers through the D2C approach. Therefore, Ivan decided to pivot and move into the provision of embeddable solutions and partner with existing market players by providing them with a unique additional highly focused and specialized product.
Ivan started fundraising with approximately 6 months of runway, however the preparation began much earlier. Ivan is always in contact with VCs even when not fundraising, has a separate CRM for maintaining the communication as he believes that
“VCs are a good source of information and they are always keen on speaking with founders to get some insights on the market as well. You can also understand what they are excited about.”
The communication and connection with Point72 Ventures (the lead investor) hit the bull’s eye 🎯. Monite’s product vision was exactly in line with the investment thesis that Point72 Ventures wrote 2 years ago and actually were searching for startups that work following such principles.
“We started talking with potential and existing investors months before the actual fundraise to probe the ground. We briefly explained our updated approach and asked them what they would look deeper at, what focus on.”
As a result, when the actual fundraising began, Ivan and the team at Monite had the comprehensive FAQ with more than 40 answers to all the topics and concerns that potential investors raised during those preliminary talks.
“It really showed them that we did our homework and came prepared. VCs want to test you and knock over by asking questions to see the reaction.”
Ivan did not want to go all-in with fundraising nor state loudly that they accept commitments within one week only, which leaves VCs no space for thorough due diligence.
”The more time you give investors, the less likely they are going to invest. However, we still believe that there should be some process in place, as not all investors are playing this bullish game.”
Ivan was never afraid of cold messaging investors as he believes that there is not much difference between this and a warm introduction.
“You just need to tell them who you are, introduce yourself in one line. Know how to sell yourself. If they agree on the call — great, if they want to bombard you with questions — don’t reply too quickly. Be smart and show them that you are not in desperate need.”
Speaking of lessons learned, Ivan mentions that
“It would have been nice to do more test runs of pitches with the current investors, get more feedback.”
Looking at the following rounds, Ivan states that
“We want to be on top of the investors’ minds when they think or search for our field of the industry. We will develop and implement strategies for achieving that.”
The main criteria for choosing the investment partner for Ivan is the actual person from the VC that he is going to work with, his/her expertise and values as a human being.
“There is a minimum benchmark of people and VCs that I want to and feel comfortable working with.
Don’t easily settle for your second option, rather fight hard for the first one.”
🗣 I wish Ivan and the whole team at Monite the very best in their journey. They have shown resilience during changing the focus and adapting product-market fit. This is definitely not the latest challenge that they will face. The way you, as a founder, react to them really defines and sets you aside.