I am Andrew McKenzie. I'm CEO and co-founder of Precision Livestock Technologies. 

We have a machine vision based AI enabled platform that is used by cattle feeders to optimize the feeding decision in their production facilities.

We founded the company in September of 2019. We raised our first outside capital in early March 2020, right before COVID.

Our initial fundraising was done through Princeton Alumni Angels. My co-founder and I are both alums. That was $250k as a SAFE note at a $4M cap. 

We then raised a $600k convertible note in 2021 from an ag-focused funding group called Harvest Returns. That was at a $6M pre-money cap conversion.

We then raised additional funding at that $6M valuation.

In 2022 we raised a $2M seed round at an $8.5M pre-money valuation.

We're a deep tech company. We've developed all of our own machine vision and machine learning algorithms for making feeding recommendations. 

We've also developed our own hardware platform for image acquisition, which is solar powered.

The vast majority of funds have gone to cloud computing, engineering, and R&D. About 20% has gone towards SG&A expenses.

We’ve raised money from primarily high net worth individuals and customers.

We’ve also raised funding from some institutions, but not in a traditional sense. 

We thought raising from these different sources were the people that made the most sense to reach out to.

We got in touch through introductions from people we knew.

My co-founder and I have done a lot of different things in our careers and have met many incredible people. We tapped into our own networks and found investors that way.

On the high net worth side, through introductions, the conversion rate is very high. 

These conversations were around check sizes between $50k and $200k. From those direct conversations the conversion rate was well over 70%.

We took a very disciplined approach. Long shots are long shots and there's only so many hours in the day. 

I can't imagine having a 20% conversion rate. We'd be out of business because I would have spent all my time having conversations with the wrong people.

We're trying to do something that is difficult from an engineering standpoint, but it’s also reasonably easy for the customers to understand how we're trying to create value for them. 

We're not coming into this industry at a crazy angle. We're coming into the opportunity in a way that is sensible to the customers.

That’s always been our main contention. We're trying to do something straightforward. It's challenging, but nobody else in the space is making any headway.

We've established a leadership position and there's a ton of room to grow. 

We've also emphasized developing our technology in production environments, rather than what’s in the lab or on the bench. 

This allowed us to build credibility in the industry, have early customers and understand what it takes to operate in the mud and in the rain. 

That's always been our focus. When you do those things good things will happen.

We did this within reason. Having a lack of salesmanship is a weakness on my part. Regardless, people are gonna do what they're gonna do. 

Something I’ve done related to angel investors is, when we’re raising between $50 to $100k, the opportunity to invest that amount at meaningful multiples is right now, rather than a later point in time.

That transparency could create FOMO, but it also has the benefit of also being true. 

For us it’s been how constant the process is. The hit rates have been high, but the rounds have been open longer.

It’s been a little more nerve-wracking approaching fundraising that way in terms of runway. That's the most stressful thing about doing it that way.

The advice is to talk to and spend time with people who intimately understand your industry.

The other things that need to line up include the age of the fund, the stage, size of investment, ARR requirement, or industry. 

It is very rare to meet all those requirements to find the right investor.

If you're on a VC website and they don't have anything that resembles what you do at all, they might take a meeting with you, but you’ll probably end up as a statistic.

They need to say that they talked to a certain number of companies and invested in a small subset of those.

The further you are from speaking to an equity partner in the firm, the further you are from getting a check written.

It gets back to how closely you align with the investor’s investment mandate.

The closer you align with their investment mandate, the more productive conversation you're going to have. 

Because they're going to have relationships with strategics and you're going to be in their zone of influence. 

They may actually be able to help you. It'll also be easier for them to get something through their investment committee.

I sometimes listen to Acquired. They have some good lessons in them. I love Freakonomics as well.

Venture capitalists are managing a portfolio. They have a different set of potential outcomes than you do. 

Your outcome is almost certainly binary. This is not the case for the venture capitalist. 

They would rather bend you into an unnatural shape to achieve their portfolio management goals than see you have a decent outcome. 

They are not interested in you having a decent outcome.

The more money you raise, the further away the goalposts get. 

People think once they’ve raised $10M that they’ve made it. What does it actually mean? Just multiply your post-money valuation by 10 or 20 - that’s now your exit valuation target.