Getting Your Startup Funded: a Q&A with StringersHub founder Yakau Buta
StringersHub is a marketplace that connects stringers and news media buyers with real-time and viral video content from all around the world. Its founder, Yakau Buta, was a participant in the 2019 GIST Business Incubation program that brought innovators from around the world to work in small groups with U.S. incubators and accelerators.
This conversation between Yakau Buta and VentureWell communications manager, Genesis Lodise, was conducted May 31, 2021 and was edited for clarity.
GIST: Yakau! It’s great to see you again. StringersHub has had some really exciting developments recently. Why don’t we start with a brief overview of the need that StringersHub fulfills.
Yakau Buta: Sure! We help media companies like Reuters or Associated Press to receive video content created by professional videographers, who we call stringers or eyewitnesses. We have more than 27,000 creators and around 800 media companies consuming this content. StringersHub operates as a freelance marketplace and a stock video source at the same time.
GIST: StringersHub recently secured a substantial amount of capital. What has been the impact of that capital on your startup?
YB: Right now we are looking to grow but to do that we have to test many different ideas. For example, we started as just a freelance marketplace but then we heard from our users that they wanted to be able to post already filmed content independent of an assignment. That was how the stock video part was created. Then we had to launch mobile applications to support this new feature.
Capital investment is critical to that type of growth. That growth has allowed us to be in a position to sign agreements with Associated Press and become partners with Getty Images and Shutterstock.
We also used the money for advertising campaigns, to track the content of our users, and also on development.
"I met with dozens of potential investors. I wrote hundreds of emails and I participated in dozens of events."
GIST: As more people use your platform, the costs for maintaining it must also increase. Has the investment helped with that too? For example, how much has the cost of your website hosting gone up?
YB: That’s a good question. All these huge players like Amazon Web Services, Microsoft Azure, and Google Cloud, they all have special programs for startups which we have participated in. As a result, we have credits from all these companies that cover the costs of our hosting. They even provide tools from their partners so you can save money on those as well.
GIST: That's amazing to hear, because I know those can be such huge costs. When you were preparing to meet with investors, did you talk to many different investors or did you just talk to one? What was your team’s process?
YB: You mentioned “the team” and I should say that in startups at our stage it is usually on the founders to do all the fundraising. So it’s all on me. I met with dozens of potential investors. I wrote hundreds of emails and I participated in dozens of events--tech events, startup events. Something that is very important for seeking additional investment is to have those first commitments--your previous investors. We had early commitments of $200k from our first investor, Starta Ventures. It was very important when we were negotiating with new investors for us to be able to show them that our lead investor had already committed a large amount of capital. This showed the new investors that we had someone who already believed in us.
GIST: Did you have to provide things like profit and loss statements or your projected market share?
YB: Basically, at this stage, investors don't need a lot. Your P&L, your financial plan, a one-pager, and a pitch deck. Because, at this stage, investors usually invest based on the founder’s experience and the team that has been assembled around the product.
"Every meeting with investors should be very important for you. Avoid people who aren’t serious about investing in your company."
GIST: What kind of a relationship is an investor looking for when they invest in a startup? Do they check in on you? Do they become a partner in your success?
YB: It’s about what you need from the investors. If you just need money then you will be providing monthly reports and that’s probably enough. If you need smart money from investors with existing ties to your industry or field, you're going to involve them much more deeply in your business.
GIST: Could you explain what that term smart money means?
YB: Smart money investors usually are from the same industry or field as your startup is innovating in. They are going to be deeply knowledgeable in that field and likely well-connected to resources that can really help you. You can benefit from their existing network. They will also be able to provide strategic advice. They might even take a seat on your board. For some investors, their strategy is to invest into a few companies, maybe three to five to seven companies, and spend a lot of time with them.
Unfortunately none of our investors has experience in the media sphere, but they have been happy to help us in other areas such as marketing and development. Our main investor, Starta Ventures, is located in New York and they are happy to host us every time we are there.
GIST: It sounds like there is quite a range of roles that investors can take in your startup from just providing money to mentorship to providing a workspace or even sitting on the board. What advice do you have to early-stage startups who are at the beginning of this relationship?
YB: Every meeting with investors should be very important for you. Avoid people who aren’t serious about investing in your company. You have to do your research and learn more about what businesses these potential investors are looking for. Check out their hobbies and their idols to better understand them. I met with dozens of investors and the more information I had about the investor, the better the meeting went.
Second, be confident. Try to not look like someone whose last chance is sitting in front of them. If you are desperate, the investor might take advantage of that and set terms that are not great for you. Show them that you believe in your idea and your team and that your product is so good that it won't be a problem for you to close this round. Impress on them that it is very important for them to “get on this train.” Feel free to generate a bit of FOMO (fear of missing out).
GIST: Treat every meeting seriously, be confident, and put the fear of missing out into that investor. Great advice!