An interview with Alicia Navarro

As any seasoned entrepreneur can confirm, finding an investor for the first time for your startup can be a daunting prospect and is definitely a time-consuming process.

Despite how tempting it can be to take money from anyone that will give it to you, choosing the right investor for you and your company is essential. This is a long-term commitment. You and your investor are going to be together for a while so making sure it’s a good mutual fit is key.

As investors, we can give you all sorts of tips on what we look for when we invest in a company, but we thought it would be more insightful, and ultimately more useful, for you to hear from a fellow founder on the subject and find out what they did when faced with the mammoth task of finding the right VC for them.

So we asked Alicia Navarro, Breega’s Entrepreneur-in-residence and founder of Skimlinks,  the leading commerce content monetization platform, to give us the low down on her fund-raising experiences with some key insights and advice just for you.

Hi Alicia,

Can you tell us what are the main differences between Angel investors and early-stage VCs?

There is firstly the obvious – Angels are individuals and VCs are companies investing funds on behalf of other parties, called “LPs” which means Limited Partners. However, the main difference is in their investment strategies. Angels invest with a goal of making a direct return some day, VCs invest with a goal that they deliver a certain financial return to their LPs within 10 years, or that you raise money within a 1-3 years at a higher valuation so they can themselves demonstrate growth when they seek to raise money for their next fund.

These are the raw mechanics of VC funds, and startups need to understand this so they know whether and when to pitch to a VC.

As a founder how do I know when to start looking around for Investors outside of friends and family?

The right time to pitch to Angels is when you need to raise more than you can from friends and family, and you have a solid proposition with demonstrable market potential.

The right time to pitch to VCs is when you are confident you can begin a journey that could end in a sizable exit. This means you are ready to grow at a pace that will require raising additional funds every few years, and that you have sufficient evidence that this is likely. This evidence comes in the form of healthy revenue and/or engagement metrics, that are not only of a sufficient scale size-wise, but are growing consistently and at no less than a linear rate.

What is “sufficient”? It is generally arbitrary, as it gives the VC some flexibility if they find a founder they believe in and want to back even if it is comparatively early for them.

As a first time founder,  it would be useful if my investor could give me some tips and advice – they’ve dealt with all types of companies! So what kind of investor am I better off choosing, angel or VC?

The right VC will also offer advice and support, it is what they do to add value and maximise the chances of your success (and their return). This is certainly what Breega offers, and why I am such a big fan and believer in their model and team.

Angels can also be helpful mentors, but it depends on how much they are investing, and their personal interest in you and/or your mission. Generally, if they only invest a small amount, it isn’t worthwhile for them to spend more unpaid time helping you; Angels that invest significant amounts will also want to maximise your success so are more likely to want to be your mentor.

It is also not unusual to pay for an advisor or mentor at this stage, either through shares or on a retainer basis.

If I decide to go with a VC, where do I start? Is there a specific process and timing that should be respected?

The most important thing to understand about fundraising is that it needs to be a deliberate, orchestrated, full-time process in order for it to have a chance of being successful. If you do it haphazardly, without focus, or without a plan, it is almost certainly not going to be fruitful.

Start by identifying a long list of potential VCs, and research what they look for, and who the optimal person would be within the VC. You want to find VCs that invest in companies at your stage, in your sector, and in your geography.

Next, you want to have your data room and metrics in order. You want to be ready to respond quickly to any question a VC may have, as momentum is your friend in this process.

You will want to have rehearsed your pitch and refined your deck, maybe using friendly VCs or other entrepreneurs for feedback. Leverage your advisors, existing investors, and other contacts for intros. Send them a short summary of your company so they can forward it onto their contacts.

Then it is all about timing and momentum. Inertia kills deals.

This is the painful and challenging part for you. You need to keep the conversations happening at approximately the same pace, you want to be sharing information equally, and you want to move everyone to the point where they get to term sheet phase around the same time.

This is challenging and even the most gifted and experienced founders find this painful, so don’t be hard on yourself. Every time I’ve raised money I’ve thought it would be easier this time, and every time it was harder than the time before, for different reasons each time!

How do I approach a VC if I don’t have a point of entry, ie: a formal intro? Do VCs really read the decks they receive on their websites?

Yes, some VCs do read the decks they receive. At Breega, we certainly do, because we know what it was like to be a founder and trying to get that first big break. However, for the most part, it is just more likely a VC will meet you if you are introduced to them from a respected mutual acquaintance.

Most VCs will have representatives at various startup and industry events, and getting a chance to speak directly to a VC at a social or networking event is a great way to convey not only your business’ strengths but your own energy and passion as a founder.

If you really want to approach a particular VC and have no other way in, I’d reach out to various people at the VC through LinkedIn or other social channels they use, and quickly get your point across, focusing on the achievements you’ve had to date.

For a VC to be interested in a company they have not met or been introduced to, they either have to be particularly interested in your specific sector or problem space, or you have to show levels of growth and traction with customers that gets them excited immediately.

I’ve heard that some VCs can be really difficult to deal with. Are there any “red flag” signs or behaviour that I should look out for?

It isn’t necessarily that VCs are difficult to deal with (although, absolutely, there are some dicks out there), but that being a VC means you are constantly being pitched to all day every day, and it is hard to remain open and positive when you have to say “No” many many more times than you say “Yes”. It is easy to become a bit cynical or closed sometimes.

So, as a founder, you’ve got to remember this. You’ve got to work out what is going to interest the VC, and tweak your pitch to work for them. Ask them questions, understand what knowledge or investments they already have in your space, and be sharp and focused in your pitch. Nothing is worse to a VC than a founder that rambles on with no point or clarity.

I’ve also heard that some VCs ask for a lot in equity or returns.  How do I know what is a FAIR ask and what isn’t?

The key thing I have learned is that valuation doesn’t matter quite as much as many founders think, the terms matter more, and the fit with the right VC matters the most. What you want to see is that the VC is ensuring there is enough “skin in the game” for the founders and team to be motivated for this round and future rounds. If you are too diluted, this may not be a VC that understands the long-term importance of a motivated founding and executive team.

However, VCs are entitled to protect their investment, so it is usual to have terms around liquidation preferences, founder vesting, founder warrants, and actions that require investor or Board approval. A good lawyer here is essential and they can help you negotiate a fair set of terms.

I’ve received a couple of offers. On which basis should I decide which VC is the right one for me?

The most important factor is chemistry and trust. Who do you want to be on the other end of the phone when you face inevitable challenges along the way? With whom do you want to be negotiating future compensation plans? With whom do you want to be having weekly conversations about your strategic plans?

Beyond chemistry, you want terms that are fair and do not make it difficult to raise or hire later. You want a VC with some value-add beyond just the cash they invest, e.g. can they help you with business leads, with management advice, with introductions to potential acquirers.

Only then, if all other things are equal, do you look at valuation. It is important, of course, and you should negotiate this if you can. It just isn’t the most important thing when choosing a VC.

Do I have to give them a seat on my company’s board? What are the advantages/disadvantages of doing so?

If a VC is investing a significant amount of money in your business, i.e. they will hold more than 10% of your equity, they will expect and deserve a Board seat. Board meetings are not only where you discuss strategic matters, but where matters around governance and shareholdings are decided. You will want a trusted and experienced investor on your Board.

However, you will want to manage your Board composition, as if it is only made up of investors, your Board meetings will end up being more about metrics and governance than about strategy and business planning. Ensure you do a Board review at every fundraise to be sure you have a good balance of investors and non-investors.

What if I make a mistake and choose the wrong investor, one that I don’t get on with, am I stuck with them?

In short, yes. You’ve just got to learn to make the best of it. Consider it a personal learning challenge, because not always in life will you get to work with people you like. Accept responsibility for your decisions, and make it work. Everyone is (usually) a professional, so you can get there, even if it is sometimes more painful than it could have been.

Any last piece of advice?

…I wish someone had told me, long ago, that learning how to fund raise, and how to keep yourself and your company sane throughout the process, is as essential a skill for an entrepreneur as designing a product or hiring an exec team. I learnt it eventually, of course, but if I can save you the pain of learning this the hard way, I’ll be happy!

Approach fund-raising like you approach all new important skills in your life: with positivity, an eagerness to learn, and an acceptance you’ll make some errors along the way, but that is all part of the joy and excitement of being an entrepreneur.

Make sure your team understand how exciting a milestone this is, and carve out time to celebrate once it completes. Then once the hangover subsides, dive into the challenging but rewarding journey of turning that money into impact and substance.

Don’t forget why you started this journey, *that* is what it is all about. Enjoy!


About Alicia

After dedicating more than 10 years to growing Skimlinks from a startup into a multi million business, Alicia left Skimlinks last year and now helps to start and build other early-stage companies, mainly in an advisory role. If you would like to know more about Alicia Navarro and her entrepreneurial background, you can visit her blog:


About Skimlinks

Founded in 2007, Skimlinks is the leading commerce content monetization platform. Its technology automatically monetizes product links in commerce-related content to earn publishers a share of sales they drive. Its platform is a one stop solution providing the technology and the data to start and scale content commerce strategies across desktop and mobile.  Skimlinks connects 60,000 publishers to 48,500 merchants around the world, generating $2.5m of sales every day. To date, Skimlinks has 80 employees and has raised a total of £25m in venture funding with key investors such as Greycroft, Local Globe, Silicon Valley Bank or Frog Capital. Skimlinks generates an annual revenue of over £50m.

For more information on Skimlinks: