As the age-old saying goes, 'When things are too good to be true, it often is' Below is how that happened to us, but maybe, in the long run, it was a good thing...
When I came up with Mattr, an associate of my sister (Chess) who was in the start-up world suggested reaching out to a contact of hers. We will call them Phantom VC.
We had one meeting with them, I remember it so clearly as it was one of the most shocked I've ever felt in my life.
I will add at this point we had NOTHING as a business, all we had to our name was a deck and the results of a research paper. I don't even think we were incorporated at this point, that's how early this was.
After a 40 min casual convo, we were asked 'what sum of money would it take to get this off the ground' I had no idea whatsoever so I replied 'what typically would you offer' and they replied ' Does £1,000,000 work for you?'
My sister and I looked at each other on the video call and said 'Sure that works...' we hung up the call and then immediately called each other.
Was this happening?
Now I've not raised money before, I didn't know if some ideas are just too good to let others snap up so I called in the help of Mitch (COO) who at this point was just giving me some top line advice.
He seemed to think it all checked out and we went on the journey.
We were told to get ready for the funds which would be coming around Jan 2022, our first meeting with them was October 2021. We made a list of all that we would need and Mitch came on in a more formal capacity to handle the negotiations and paperwork as this was alien to Chess and me. I paid his monthly retainer myself from my salary of course thinking I'd get it all back in the form of a director's loan when the money landed.
The firm in question had a speciality for investing in female founders and had experience within the dating space. They enrolled Chess into their female mentorship programme along with leading females in the tech space and did weekly 'lunch and learns'. We had signed MOUs (strong signal of intent) and had external Jersey-based firms checking us out to see if we were legit, ironic I know...
Next up was assembling a killer team, a marketing agency and even looking for office space. We reached out to recruiters, ran a pitch process and were looking at locations, again all based on 7 figures dropping in January.
At this point, I was working full-time in my role in a marketing agency and enjoying it. I of course was not going to quit before the funds landed so juggling all of this was more than a stress, along with the fact I was paying tonnes of bills in advisors, set up fees and having to do calls with people at unsociable hours due to working full time. But I kept saying 'It will all be over soon'.
January came, no funds, and there was a delay in 'drawing down.' We were told not to worry max 3 weeks and that it would be sorted. February came nothing again, but worryingly all the weekly checks in's Chess attended stopped.
At this point my anxiety was off the scale, I was worried more about my reputation for going our speaking to all these people based on this money coming, all the potential future suppliers, staff and my close network along with the fact I was up to around £14,000 in personal spend.
Chess said to me one day 'I don't think this is happening, maybe let's call it a day' She could see how stressed I was getting, how this was consuming my life and probably thought it would be better for my sanity to quit.
What makes this even worse is that there were 21 other female founders on this same path. It makes me sick that a fund that was started to support underrepresented founders was acting like this. They, along with us, deserved better..
I thought long and hard about it, should I quit with my tail between my legs or go to plan B?
Whilst we were negotiating with them I was out raising alongside through friends and family. I didn't want to win without taking those people with me, and their investments allowed me to have an escape route, to those early investors, I can't thank you enough. In the end, they dramatically increased their equity share so swings and roundabouts I guess.
Now came the hard bit, going back to all the suppliers and letting them know the funds didn't come and unfortunately, we had wasted their time. As someone that spent 12 years in sales, I've been there, verbal agreements everything going well for the horse to fall at the last hurdle. It stings and you never know if the reason why is legit. In my case it 100% was.
Mitch and I sat down and said 'We can do this' but it's going to be tough, we need to remodel everything, we need to cut all costs and bootstrap it.
I took an 80% pay cut in fact what I get paid now is less than my grad role and back then a pint wasn't £7.20 either! We brought on staff on part-time contracts and we all worked from home with our laptops.
But you know what, looking at where we are today maybe it was needed. Maybe when things don't work out it's for the best, 'everything happens for a reason' right?
We have an excellent team, they are top-notch people both personally and professionally.
At Mattr we recruit based on both these metrics, I've worked with those that look good on paper, but in sales, there is this stupid saying 'that if you are top biller no one cares what you do' Well let me tell you that plain wrong, I've worked with these people that think they are above you due to hitting targets and it's a sure-fire way to have a toxic culture, something we won't stand for.
Our MVP is fantastic and all of it is developed in-house, we are on the app store now completing our final tests before our big launch in the next few days.
But most importantly our team have developed a culture, of grafting, understanding and most importantly caring. We have done this the hard way all of us and ahead of our launch, we should be proud of that.
We are in the middle of a raise now and I think this journey shows investors what we can do with little funds, imagine this team with financial backing all at 100% capacity...
To this day we never really found out what happened with Phantom VC, we’ve had some communication from their leadership team about their funds not being received and court cases etc but our contact seems to have disappeared, with their fund no longer showing on Linkedin.
Maybe the lesson for them would be the importance of communication and how signing contracts with no money in the bank might not be such a wise move. You live and you learn…
Yes, it's been tough, but looking back on it maybe it was for the best.
Jamie x
PS If you want to read more on Phantom VC, Sifted did a better job than me… READ HERE