Conseils des fondateurs

Comment la directrice générale de Rootine a trouvé sa place en tant que femme dans un secteur des technologies de la santé dominé par les hommes

Rachel Sanders a récemment levé des fonds d’amorçage, et entre les étapes de pré‑amorçage et d’amorçage, elle a apporté de nombreux ajustements au processus. Voici comment elle a surmonté les difficultés et utilisé les données pour lever un capital de départ.
Rachel Sanders, PDG et cofondatrice de Rootine

Rootine unlocks better health and daily performance for thousands of members with precision nutrition. Our technology leverages AI to ingest, analyze, and match individual DNA, blood, and lifestyle test results with thousands of clinical studies to empower members to improve across energy, stress, mood, mental clarity and more. We recently raised seed funding, and between our pre-seed and seed rounds, I made a lot of adjustments to the fundraising process. Bringing data to our fundraising strategy was a game-changer; it helped support my vision and empowered me to bring Rootine to fruition.

Pre-seed fundraising challenges

Raising a pre-seed round for Rootine was challenging. Although I’m a first-time, underrepresented founder, I have a solid network and was able to chat with lots of peers and mentors before that initial foray into fundraising and the VC world. We started with a strong deck, but as we had conversations it became clear that we needed to iterate and make updates. During our pre-seed raise, I would also continuously update numbers or figures to best reflect the state of the company once I had already sent out a deck. This left me stuck: do I send out the updated deck to all investors? How exactly should I be managing this living document? Questions like these made me hesitant about making changes that I knew would improve our pitch. It was time-intensive to keep track of which investors had seen which deck versions, and I wasn’t sure whether I even needed to be circulating updated decks.

In addition to these administrative and logistical challenges, we found that angel investors and institutional VCs required different types of follow-up information based on their areas of interest, expertise, and diligence process. During our pre-seed round, it was hard to tailor follow-up materials in a way that was easy to track. In short, we never felt fully on top of the version control of our deck and follow-up material.

Creating a seed-stage process and a diverse investor list

When it came time to raise our seed round, we made a concerted effort to run a well-defined process and prioritize administrative efficiency. We spent about a month preparing documents in advance: a pitch deck, financial model, cohort analysis, investor list and outreach plan, and answers to frequently asked questions. We also secured as many warm VC intros as possible and practiced pitch conversations with advisors and earlier investors.

When creating a list of potential investors, we targeted investors with expertise in our sector, personalized health, and tangential areas like consumer, digital health, and technology (because personalized health is an emerging area). We then prioritized investors in rank order to create a defined outreach process.

As a female led and male-female founded team, we are committed to democratizing health data for all. Building a diverse team, including investors, is an important part of realizing our mission. As such, we also focused on investor diversity when building our list. First, it was important that we include investors from underrepresented backgrounds and geographies. Second, we wanted to bring in investors with diverse types of expertise. Our goal here was to have different voices participate in our cap table in order to create a strong network effect of people who believed in our business.

Third, for angels, we dropped minimum investment amounts to very low levels, asI saw early on in the process that it would allow more diverse investors to get on the cap table. I certainly didn’t want to pass on anyone who could help our company grow but who might not have the institutional or financial background of traditional angel investors. In the end, we brought together a wide range of investors with expertise in tech, health, consumer products, data science, and more. And about 50% of our seed investors are underrepresented (women, BIPOC, and/or Latino). This is an incredible group of investors who all share our vision of a future where health decisions are data-driven and personalized.

Unanticipated hurdles

We learned a lot of lessons from the administrative headaches of our pre-seed round, and although we were much better prepared heading into our seed round, there are a few things we would have done differently. The first would have been to prepare more detailed documents, written in plain language, on the science behind our company, the product roadmap, and the growth plan as it related to how we were using testing and data.

Although we didn’t create these documents in advance, as we were talking to investors we prepared a Notion homepage for all diligence that offered people layers of information based on their interests. For our science primer, for example, VCs could read 2-3 sentences about each aspect of our business and the science behind it. They could then click further into our research documents or 30-page white paper if they wanted to know more. The Notion page allowed investors to have control over their learning experience. I’m grateful we have this set up now, but also wish we had prepared it prior to the seed round.

The second aspect of our raise that I’d do differently has to do with investor outreach. We were initially too broad in VC sector focus as our business does touch on a lot of areas across health, technology, and consumer. Having conversations with VCs with varying types of sector focus was a challenge, since Rootine didn’t always mesh 100% with their investment thesis. In today’s funding environment, you need to be having conversations with folks whose vision matches your own right from the beginning. Then, if you want to bring in other sorts of expertise that might be more tangential to your business, you can reach out to angels or other carefully-selected advisors.

Bringing data to our seed round

As a company, one of our core values is being evidence-based and data-driven. We believe in the power of informed decision-making and encourage everyone on our team to continuously measure tangible results and gain insights through data. Given this focus of ours, it was only natural that, as we formalized our seed round, we wanted to bring as much data as possible to the process.

Between our pre-seed and seed raises, we learned that DocSend could help us do this. By adopting DocSend for our seed round, we could easily track the different versions of the deck and know which slides were getting the most attention from investors. Using these analytics helped us bring a lot more anticipation to the process, whereas our pre-seed round was much more of a black box.

DocSend Startup Index Note: Rachel was right to focus on the slides investors visited most and strategize accordingly. In 2020, we found that seed-stage companies that successfully raised their round saw the most attention from investors on their product and business model slides. These deck sections should be robust and foregrounded in a pitch deck.

We could also make real-time updates to the deck, even if we only had 30 minutes between investor calls. Being able to do this was invaluable since we could incorporate investor feedback almost immediately and feel confident about our next meeting.

Selling Rootine’s vision

Less than 3% of VC dollars go to female founders, with that number dropping during the pandemic. Research shows that, for some first-time, underrepresented founders a perceived confidence gap can emerge during conversations with investors. Whereas men might feel confident enough to assert that they’re taking over the world and have VCs believe them, women aren’t always having conversations in these terms. Making things worse, studies show 70% of the questions posed to male entrepreneurs during fundraising are promotion-oriented (or asking about the potential of the business), whereas 70% of questions posed to females are prevention-oriented (asking about potential losses).

I experienced this first-hand during early conversations for Rootine’s pre-seed raise. For instance, I would get questions focused around our plans to retain our members versus how we would acquire new members, and other questions digging deep into the competition versus how big our market could get in the future.

During the pre-seed round I also received great feedback from one investor on how to improve the pitch by displaying more confidence in our vision: lead with our great growth and financial metrics instead of the story. The investor said that most male founders he had spoken with recently had come out swinging with their financials–even if they weren’t good! Based on this, , I quickly pivoted my approach to ensure I was adequately selling our vision–leading with the financials and supporting it with the founding story and growth potential of Rootine.

Bridging the gap

There is some disparity between the questioning and advice given to male versus female founders. This first became apparent during our transition from pre-seed to seed. I did a lot of learning about a variety of topics: what it meant to be a first-time founder and an underrepresented founder, how someone like me would be perceived, and what traps founders like me often fall into. I internalized that every person I’d be talking to would have different preconceived notions about me and my business based on their own experiences. You can’t really control other people’s preconceptions, of course, but understanding that they existed was especially helpful.

I also took practical, process-related steps to determine how to sell our vision and adequately display the potential. I made sure to nail the exact story I wanted to tell about Rootine and practiced it with advisors and earlier investors. I also got the right documents in place before the raise even started. Most importantly, I knew the business inside and out and was able to answer 99% of all financial and operations-related questions. That said, I also became comfortable saying “Let me get back to you on that number” for that last 1% that I needed to confirm.

Bringing data to our fundraising process was also crucial in giving me insight into how to continuously improve the pitch and process. Tools like DocSend and data-driven content about fellow founders gave more clarity into my process in real-time and helped me understand what was “normal” within my stage, industry, and founder profile. We know that data empowers people to optimize their health, so it makes sense that it can also empower founders to run better processes and make better decisions when it comes to fundraising.

Get educated, learn from the process, and don’t forget your “health stack”

Other early-stage founders can take several key lessons from Rootine’s seed raise. First, make sure to educate yourself on everything: processes, trends, people, tools. There’s a lot of great fundraising content out there, so make sure to really digest it. Next, prep everything before you hit the fundraising trail…but also know that you may have to iterate and experiment as you go through the process.

Founders should also figure out how to enjoy and learn from the fundraising process. NFX put out a great list of 40 questions founders should ask during VC meetings in order to learn more about their own business and how different types of expertise can contribute to it. This learning process is rich, but it can also take up a lot of time: founders should block off time specifically for fundraising and make sure the rest of the team is aware. Alex Iskold, one of my mentors, a managing partner at 2048 Ventures, and a former managing director at Techstars NYC, often says that you can’t fundraise part-time. You’re either fundraising or you’re not, and if you are, it means that you don’t have as much time to devote yourself to other parts of the business. This means that your whole team needs to be on the same page to effectively operate while you are raising. In general, part-time fundraising does not lead to great results.

Lastly, founders should remember to take care of themselves. High-performing individuals need to focus on their health and well-being. Just as you carefully assemble a tech stack for your business, pay attention to your “health stack” across sleep, nutrition, exercise, and mental health and prioritize it. You can’t afford to miss days or weeks from low energy, sickness, mood challenges, or simple brain fog. We carefully analyze data and experiments in our work, so why shouldn’t we be as attentive to our health? Fundraising leaves no time for a “guess and see” mentality: founders should use available data to make personalized health decisions so they can put their best foot forward with investors.

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