Please briefly introduce yourself and your startup.
My name is Mark Sumner and I am the founder and CEO of Infin8 Labs.
Infin8 Labs is a comprehensive environmental monitoring solution that includes high-resolution sensor networks, machine learning models, and an AI-enabled user interface.
Our mission is to prevent climate-related water disasters by replacing point-in-time water sampling methods with continuous monitoring and AI-supported analytics.
We recently raised a $250k pre-seed round at a $5.25M valuation. The process took about a week.
Fundraising Strategy
How did you determine when to raise, how much to raise, and at what valuation?
We hit the ground running with our sales process and secured high-value contracts fairly early in the company’s life; we needed the money to fulfill hardware needs and further software development.
We have given ourselves a 20-month runway to get into the heart of the contracts we have already sold.
We wanted to make sure we have more than enough capital when we reach that point.
What did you plan ahead of time to use the money for?
Our main funding needs are in the categories of hiring, capital expenditures, and R&D expenses.
Investor Strategy
How did you decide which investors would be a good fit?
We began with investors that we have worked with before. I have a metals and mining exploration background and have raised for many projects in that space in the past.
Some of the investors have been involved for 15 years. They are generalists and they trust me to execute.
When it comes to investors outside my network, the most important thing is fit.
I want to be secure knowing that they are in my cap table.
You work very closely with investors at this stage. If the personal fit is not good, it can create a lot of problems later in the company’s lifecycle.
I try to get a feel for them as a person through multiple meetings and calls. In-person meetings are best.
How did you get in touch with investors?
We have mostly been raising with investors that we have worked with before.
One piece of advice I can give to first time fundraisers is that they should not get caught up focusing only on American VCs.
In metals and mining exploration, there’s a low probability for success — along with a high payoff if it does work.
The risk appetite abroad is better than in the US, at least for our sector.
Fundraising Process
Roughly how many investors did you reach out to?
We have spoken to a few dozen investors and most of the people we pitched to wrote a check.
What did you emphasize in your pitch?
Our main pitch was showing some traction early on.
We had already sold contracts before we raised our first dollar, so the path to success was clear.
What did you do to drive urgency among investors and close the round?
The main thing we have been focusing on is showing our progress with the contracts we already have and filling that pipeline of demand.
We have built a huge backlog of projects that are essentially waiting for more capital and development to be released.
What was the biggest challenge that came up during fundraising?
Fundraising is challenging even in the best circumstances. There is a back and forth that arises during any fundraising process that can be challenging.
The business you are pitching is often not exactly what the investor is looking for.
The investor does not usually have the exact skillset or background you might prefer as a founder.
It can be difficult to look past those minor shortcomings and come to an agreement.
Reflection
What’s one piece of fundraising advice you’d give other founders?
Be ready to go through many tough questioning sessions.
When you are raising money from people, they want to see that you have thought this through, down to the most minor details.
They will ask you tough questions that you may have not thought about yet – it is just part of the process.
