How students can raise millions in capital – with no networks or experience

Image credit: GotCredit

Have you ever thought of starting a business? Have you ever heard of raising capital from investors?

This was a pretty scary idea for us back then, when we were still studying and, like a lot of students, we didn’t have any networks, money or corporate experience to start a business right off the bat. The particular business idea that we were looking to create and introduce to Australian university students was textbook rental.

This business model required money, however, and a lot of it at that. Here is a quick video on what a business model is, which is a pretty important concept if you are a budding entrepreneur. With a capital-intensive business model like textbook rental where we have costs like inventory, storage, shipping, rent, and so on … we needed money, and fast.

The start

The bank laughed at us when we asked them for a loan. Our friends and family offered us a small amount, but we really needed a lot more than this to give our business a real go. The only thing left was to pitch investors our business and hope that someone would believe in us, our team and our vision enough to back us with cash.

When we were creating our pitch deck using powerpoint slides, we became quite anxious as we realised how small we were in such a big world. We did not have any significant working experience or large, global networks that could give us the edge in business. All we had in fact, was ourselves.

The student advantage

We had to make do with this, and so we brainstormed ideas about what we had within us that could inspire and compel investors to believe in our vision and our ability to execute on our vision. We probably pitched 100 times in our first year, and I quickly realised that the only thing we had was actually the most important thing; not experience or networks.

Our team was comprised of four people – all university students at that time who had also personally experienced the pain of purchasing expensive textbooks semester after semester. If we distill this fact down into two principles, you can begin to understand why an investor would have confidence in us to execute our vision to become the largest educational platform in the Asia-Pacific.

Leveraging on these principles, in our first year we were able to raise US$1.5 million from venture capitalists, and have since raised over US$5 million in total – from Australia, Israel, Silicon Valley and more recently, from Singapore.

This has allowed us to generate tens of millions of dollars in revenue this year and also have a paying customer database of over 40,000 customers. I will now talk about these two principles which you can use going forward.

Two key principles

Firstly, the team were all students at university, which meant that we understood students. We were living, breathing students who understood what students liked, what they did not like, where they hung out, how they studied, and how they partied.

Our closeness to the target market meant that we could use our inside knowledge to create strong business tactics that we know would work much better on the student demographic. This is something that adults or non-students would have much more of a hard time coming to terms with. This was our first key strength.

Our next key strength was personally experiencing the problem that we were trying to solve. We knew from our first day at university that textbooks were heavy and expensive. There were no lockers to store them in and, being a student, I was not earning money – so spending over US$100 on a single textbook caused a lot of pain for me.

Next steps

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