FundingHero are creating a founder’s fundraising voices series with the aim to give a spotlight to founders who are raising early-stage funds or have done so in the past. The idea is to learn from other’s experiences, share challenges and grow together.
In the feature, we catch up with Thomas Panton, founder and CEO of UK Start-up called Canopey - a sustainable shopping platform. He has raised his pre-seed round, is ready to launch the platform and has some useful advice for other founders seeking their early-stage investment.
Hello Thomas, we’re FundingHero - A platform to help early-stage tech founders learn and navigate the tricky fundraising process.
Here is your chance to tell our readers all about you! Tell us a little more about your start-up:
Thomas: "Canopey is on a mission to make sustainable shopping mainstream. By focusing on 3 pillars - Accessibility, Trust/Transparency, and Brand - we aim to break out of the eco-conscious echo chamber and bring sustainable shopping to a wider audience.
We are a central platform with a marketplace for sustainable products from ethical companies which we have vetted and done deep research on to make sure they fulfil the criteria to sell on the platform. We also have an impact calculator which shows the carbon emissions, water waste, and plastic waste saved per product compared to mainstream alternatives."
"We've just raised a pre-seed round and are gearing up for launch."
Thomas: I spent 5 years working for the world's largest independent environmental organisation, Greenpeace, and then followed that on with my first startup dealing with consumer product waste. I then returned to academia and studied a part-time MSc in Climate Change working alongside leading climate scientists. I am a Norfolk Business Climate Leader, LinkedIn Top Green Voice, and student mentor at the UEA for climate-focused entrepreneurs. Now I'm working on tackling the impact of consumerism.
How did you come up with the idea of your start-up?
Thomas: "Canopey was literally founded in a field.
"After engaging with 10s of 1000s of people to bring them into the climate movement at Greenpeace, I set up my first company to deal with consumer product waste. After talking with both customers and businesses one thing that was clear was people wanted to buy better but they didn't know how. I’m taking everything I learnt talking to consumers and people in the industry and bringing that to the fight for better buying."
"There is a deep set need to decarbonise and minimise the impact of the consumer industry but the sector is fragmented and consumers are confused. Using data science and brand strategy we designed a product which lets consumers shop the way they want but in a way with less impact, but also track their impact, be rewarded for better purchasing decisions, and give businesses power to back up their claims."
How have you funded your business to date and what are your thoughts in general on bootstrapping, versus getting funding?
Thomas: We spent a year bootstrapping then raised a small FFF round in December 2021 of £70k to build the platform. We've just closed a pre-seed round of £270k with 2 funds, angels, and a crowdfunder to take us to launch.
Bootstrapping is great if you can do it but I've found that there's an expectation that founders either come from money, have family money, or have the ability to rely on not needing money.
When you come from a family whose businesses and capital were decimated by the 2008 crash, and you've had to help them pay rent rather than save money, I find it infuriating and extremely discriminatory when people tell me to "bootstrap".
Again, I think bootstrapping is the best way to build a business to revenue and further if possible but there needs to be more acceptance and understanding that not everyone can do that."
How did you get onto the fundraising trail and learn about the process?
Thomas: "Had a startup before, subscribed to and learnt from lots of newsletters about starting a business, have had grants and debt financing, and knew that equity fundraising was right for our company at each step we did it."
What's been your biggest fundraising challenge?
Thomas: "Being pre-revenue, pre-launch. Understandably!"
How did you tackle the notorious pitch deck, how much time and resource did you dedicate to this and what version number do you think you're on now?
Thomas: "Lucky to have a cofounder who is great at branding and design. But fundamentally it took time to get the pitch deck right, we listened to a lot of advice, and we also got support having been part of the Virgin Startup Collective Impact accelerator."
How did you tackle the financials? It's usually a tricky part to get right - did you seek any advice for this part?
Thomas: "We used lots of templates and resources online and from local authorities, but ultimately started by understanding the market, and all the various metrics that would be built into the financials before starting to build the projections themselves.
If we had a deep understanding of CAC, retention, churn rate, revenue growth, marketing costs, etc independently then we would be in a strong position to build those into our targets.
How important was it for you to find the right kind of investor?
Thomas: Important for us to find investors who aligned with and understood our ethics and vision.
Obviously capital was important, but the value-add from investors as individuals was probably more important for us.
How did you find investors who would be suited to your type of business?
Thomas: To find investors, we looked at:
- Angel lists
- Angel groups
- University contacts
- LinkedIn network
- Introductions from partners and network
- Good old google!
- Communities that we're part of
What do you think swayed investors to invest in your business?
Thomas: "Us as founders; our founder-market fit, our experience and vision, and our passion and drive.
The scale of the market and the problem that needs to be solved - lots of people trying to do it, not many with our experience in the sector, so giving us strength is talking about solving it but also our product makes more sense.
How do you find trying to talk the same language as investors or has this not been an issue?
"I think this varies. Investors are idiosyncratic, as we all are.
I tend to take the path of finding common ground first, building a relationship, and then talking about money.
Never start with money.
However, for a fund, this is obviously different, but still, relationships are everything."
Have you made any mistakes in the fundraising process to date in retrospect? Or would you have done anything differently?
Thomas: Yes, and I think everyone does. I would have planned more, and I would build more flows, to begin with. We only started doing this halfway through and it had a huge impact. If we'd done this earlier, I'm sure we would have raised more, more quickly. I also think using your leads (network) is more important than people say, get support and ask for intros.
Any exciting plans for the next 6-12 months you're looking forward to?
Thomas: "The exciting plan is to launch! Innovate UK decision in January. Big campaigns with Surfers Against Sewage and some other awesome organisations. Another funding round. Building the next product feature based on the feedback we get in beta."
Finally, what's your top tip for fundraising?
Thomas: "Get advice early on start-up fundraising and plan effectively/efficiently early on."