My one-year-old startup raised $7.5 million from 3 top VCs. Here’s how we did it

Zarget founders. Photo credit: Zarget.

The life of an entrepreneur is dotted with challenges, funding being one of the many. Recently, at tech industry think tank iSPIRT’s workshop PNgrowth 2016, many entrepreneurs asked me how we (Zarget) got our funding right.

First, a quick summary of what Zarget does. We’re all-in-one cloud-based product that combines conversion rate optimization (which refers to increasing the chances of visitors becoming customers or taking the desired action) tools like A/B testing, heatmaps, funnel analysis, polls, and feedback. Zarget’s single dashboard makes it easy for a small business owner to optimize his website to improve the conversion rate, without having to rely on a tech team for coding.

The company was two months old when Accel Partners and Matrix Partners invested US$1.5 million in it. A few months later, Sequoia Capital joined them in a US$6 million series A round.

Zarget is just 20 months young now. Time has whizzed past. It has not been just smooth sailing, as it might have often been conveyed. We’ve had our fair share of struggles, and continue to try and tame the tide. But one thing that has worked for us is our strong board of investors: Accel, Matrix Partners, and Sequoia Capital.

We don’t know for sure if what we did was right, but I thought sharing our journey might benefit those eager to crack funding roadblocks.

What went right for us?

1. Market opportunity in conjunction with a proven business model

If you have something radical that’s bound to elevate the brand image of potential investors, go for it.

Like most startups, our team had multiple opinions on everything before finalizing our product. The one thing we all agreed upon was to choose the right domain. We asked ourselves if the market was big enough, do we really know what we are doing, and can we make a difference in this space. Only when we were convinced ourselves, did we decide on marketing automation as our domain.

We felt that investors were in for the big draw. Our endgame wasn’t to make yet another profitable business, which they see day in and day out, but to stand out and solve a pain point. It is best to start by analyzing market opportunities that have the potential to be the next big thing; following a proven business model is a safe way to go. But if you have something radical that’s bound to elevate the brand image of potential investors, go for it.

2. An all-star core team

The Zarget team. Photo credit; Zarget.

It’s always about the team! I have seen companies with awesome technical and product expertise failing because they didn’t have the business experience needed to run a company. Sometimes, it’s the other way round: you have a strong business team with not many product and engineering folks to build the envisioned product. The core of the company should have the right combination of expertise and experience.