In this episode of A Founder's Life, we will be talking to Nicole Denholder who is the Founder of Next Chapter. As an expert in startups and also the business world, Nicole will talk about what it takes to build a successful startup, to tips to build connections with investors and partners to even talking about the importance of mental health for startup founders.
It's my pleasure to speak with Nicole Denholder. Founder of Next Chapter, a company focused on education and connections for founders looking to grow their businesses. Nicole is a wonderful advocate for new business ventures and startup entrepreneurs. But aside from just being nurturing, she's also practical, encouraging startups to focus on growth and revenue. With her background in financial services, consulting with big four firms, Nicole has helped companies IPO across the world. And she's able to look at what it takes to be successful from a top level view. For founders looking to launch a startup and to scale. Stay tuned for this wonderful discussion.
Hi, everyone, thanks for tuning in to the next episode of A Founder’s Life. I'm really pleased to have Nicole Denholder on the show today. Nicole Denholder is a founder of Next Chapter Raise, a company focused on education and connections for founders looking to grow their business. And she's also co-founder of Sophia, a company that develops financial education for women. Nicole, thanks so much for coming on the show. I'd love to hear a little bit about your founding story. Could you tell us how it all got started?
Nicole Denholder 01:29
Great. Absolutely. You know, I used to work at PricewaterhouseCoopers for a very long time, which I enjoyed, um, I was in the US IPO space. And, you know, after my first child, I was looking for a change in all honesty, and I was really interested in the way that women access capital for their businesses, you know, having been in, you know, the IPO space meeting a lot of businesses, you know, just having a sense of, you know, what the statistics were around funding, I noticed that women were really, we're not receiving that much funding, right, it's about 3% of funding goes to all female teams, it's around 11 to 12% goes to teams with one female founder. And then if you look at the numbers, they're dramatically different in terms of the amounts that women raise, how quickly they raise how much money they start with, you know, women bootstrapped with more, they raise slower, they raise less. And so we're very interested in building a business that addresses that issue. So I think, in one way, I'm slightly different. I wasn't just trying to sell one thing, what I was trying to do is understand why this was happening, and how can I build a solution around that? And that's kind of what kind of kicked off the whole journey I've been on.
Great. I mean, funding is like such an important part of a business. It's the lifeblood of starting anything. And that's one of the biggest obstacles that people have when they start a new business venture. How are you? How did you get your fundraising started? How do you suggest other entrepreneurs get started with the fundraising journey?
Nicole Denholder 03:04
Well, I think it's really important to think about it from day one, because we have a tendency to bootstrap as long as possible. And it really is understanding that there's lots of capital options out there for you. So I think we all default to I need to get equity, you get an equity investor. But you know, there's great grants out there, there's rewards based crowdfunding, you know, there is revenue based financing. So there's, there's other options. And I think what we really talk about is, you know, early on, particularly on funding, and I can bring this to a broader discussion on your business, but you know, you really do want to think about, okay, what, you know, once you've got product market fit in place, once you've kind of got a product going, or a service, it's like, okay, well, what am I key goals? What are the drivers to get to those goals? And to achieve that financially? What do I need to have in place, and this is where bringing in the commercial mindset and understanding of your finances is so important, so early, and aligning that with what money I need to grow the business? And not just looking at what my revenue is going to be? But also what teams do I need to put in place to build that and value your own time because, you know, understanding what you're good at, but what could you bring in to have people do with you that could really push the business forward? I think that's what you need to think about, just in the early stage about funding are some of those early questions around the growth of the business.
And there's so many kinds of investors out there. I mean, you mentioned different funding types, and there's also different investor personalities. What should a new founder really look for when they're assessing the investors that they approach?
Nicole Denholder 04:49
Well, you know, the worst thing a founder can say when they're looking for funding is they're looking for anyone, right? Because that is going to waste their time quite a lot. In truth they haven't really thought about, Okay, where am I taking this business strategically, and it also doesn't understand the investor mindset, which is really important for founders to try and put that hat on. Because, you know, you've got to think about investors in terms of what geography they're focused on, what industries they're focused on, and what ticket size they make. Because otherwise, it's very easy to talk to a lot of people that may not be the right person for you to be talking about and it does waste your time. But secondly, you then might be getting feedback on your business from people that aren't really relevant to you at that point. So it's really about being, you know, doing your research being quite focused around where you think those investors could be. You know, certainly in the early stages, when we talk about angels, there's angel networks around that you can leverage but individual angels, you know, it's around, obviously, connecting into your network to find them, but try to be very clear around what you're looking for, even when you're looking at, to talk to networks, around what type of investors if they're helping you source them.
Yeah, if you're a pre product, if you're just starting out on day one, what are the kinds of investors or people you should be talking to, compared to, you know, a company that has already a product in the market already has revenue? You know, what are the main differences in those different stages?
Nicole Denholder 06:21
Now, moving on to building businesses, you know, translating your own personal values and visions and expectations into a functioning business can take a lot of time and efforts, right? How important is a company's culture? And how do you establish that?
Nicole Denholder 08:04
it's very important, I think we've seen that in the tech community more and more over the past few years, there's been, you know, some stories and scandals that have come out that have been quite disappointing to hear. And, you know, if a business is growing quite fast, it's so important to get that culture down as early as possible, which is always early, easier to do if you have a smaller team, I think there's some, you know, once you get to that kind of 20 to 50 people, you start losing some of that connectivity, right. So if you can lay the groundwork early on with, you know, what are the values of your business and, and make sure people know that, that you talk about them in, in your team meetings, you know, they are clear about them when they're actually engaging with customers, or partners. And just bring that into the way that you expect them to interact, I think is really important. Because actually, you know, culturally, if you're not hiring, like for like, I don't mean like that. But if you're actually building that in from day one in the way you're hiring, and you show that in the way you reflect your interactions that then will play out as you hire more senior people, and they hire on. And that needs to be built strong, as I said, because as you start going into different locations with lots more people, you're dependent on others to be holding up that culture for you and bringing that to new employees.
Makes sense, makes sense. And especially as you bring in more people, it's just starts to become more difficult to manage them all. And in addition to managing people, you're also trying to grow the business, right? So you're growing people, you're growing the business, growing customers, you know, one question I have is, when you started your business for the first time, what were the strategies you used to get the word out to market your business?
Nicole Denholder 09:48
So really, when I started, I didn't have a lot of background in this, you know, I came from a corporate space. I was very, I mean, I launched with a crowdfunding platform which was very new in Asia. It was a very newconcept globally, you know, crowd funding has only been around since 2012. So I actually spent a lot of time at events personally talking to people, you know, really, I started that in trying to build connections. And this was even pre launch, I was out there talking to a lot of people about what I'm thinking of doing. And really building up that network around what the next chapter as a crowdfunding business would look like. So that when I was moving towards launch, I'd already kind of had these networks, I could tap into, ask them to promote for me, and ask them to support to really get the word out there. So from day one, we went to focus on saying no paid advertising and things like that, because there was still this education element around crowdfunding what it was, who would be good for. And really, we found that a lot of people were interested in coming to us as customers. But this is where it kind of has driven the whole journey of the next chapter, in terms of looking at other funding, because some of them were coming to us, but didn't understand what crowdfunding was, we'd explain what it was, and recognize it wasn't suited for them. So then they would be saying, well, I do need funding, what are my other options? And that's how the business has grown over time to be, you know, focused on programs around other different funding partnerships around other different types of funding. We, you know, are really trying to help them understand that, okay, if this one doesn't work, how do I go to the next one?
Make sense. And, you know, there's so much discussion nowadays about communities, and especially as it pertains to companies and startups, what is a community for the next chapter? And how do you build that among your potential customer base?
Nicole Denholder 11:43
I think a community is often driven by what's the glue, you know, you can get a lot of people together, but is that what creates that sense of community? And often, that's because there's some common factor that unites someone, right? And so in a sense for us, our community is really driven by two factors, one, women who are actively looking for some form of support for their business, primarily through some form of fundraising, but actually often even connection. So you know, that's built in. And then secondly, I think our community has also grown because of a recognition that women are underfunded, the statistics play out that way, they haven't changed much in a decade, unfortunately, globally, if you look at the numbers there. And so I think there's also an element of how we can contribute to the systematic change that needs to happen in the ecosystem to support more women getting funded. So I think we kind of have those two layers around that immediately by a funder, building out the community there, but also, people who are interested in contributing to change come into play as well.
And when it comes to starting a business, you know, there's so many different aspects, we talked about community marketing, finance. In your estimation, what are some of the skills and qualities of a good entrepreneur?
Nicole Denholder 13:05
Okay, so I think willingness to just have a go, it's the first one, you know, because you do have to pivot, I think there's flexibility around building a business, because you do start with an idea, you go out, do your research, you're creating solutions, some will work, some won't. So I think that ability to be honest with yourself and say, this isn't working, what else can I be doing, and continually tweaking that because as you get to know your customer better, you will also understand kind of how they interact with you in a way that you can enhance your product. So I think that continual iteration is really important, I think you're getting the right people around you. And certainly when you're a startup, you might need to depend on consultants, or, you know, people that you know, are part time, and it's really being very clear of what you want from them. That communication, I think, is quite key because A. you're spending money for service to support your business. So you need to really set some requirements, I think around what you expect of them. Now, you may not know a lot about marketing, that's okay. But so you need to drive them, and really around all of this as KPIs, you should be also always talking when you're talking to I think employees when you're not really sure, maybe you don't have the experience in that area. And that's why they coming on, set some KPIs or expectations around, you know, what you expect out of this relationship, because I think it makes it easier for you to manage, because if you've jointly set KPIs, that's something that you can touch upon, as you're working together to see if it's working. And if your business is really thriving with that relationship, I think that's certainly what I would do. And you know, talking to your customers as much as possible, you know, I know we're very much an online world at the moment, but you know, the more engagement you can have, certainly through surveys or trying to get feedback or picking up the phone or talking to one to one I think always is really important in, in how you kind of grow your business.
Yeah, the empathy, just understanding the needs of the customer is something I think people lack, you know, they just think, oh, I have an amazing idea for a product and you build it. But you know, it might just be in their head, right, they've never validated it, just to really understand the customer.
Nicole Denholder 15:19
And just to that point, I think there's sometimes confusion around problem solutions versus product-market fit. So then there might be a very obvious problem. And you might have a good sense of what the solution could be. But then drilling down into understanding what the actual product-market fit is really the next step. So I think that's where we, you know, see a lot of financial problems solutions. Well, how do we now need to go into understanding your customer and understanding how the solution would interact with them? Because, you know, yes, you've built a solution. But is it right? It still may not be right, even if you build a solution, you think it is a great solution, they don't think it's a great solution. And you may only be 10% off, but that 10% could be really important, and could be stopping you from scalability. So I think that's where you've got to move from just a problem solution to Yes, I have a solution. Now, how do I get that fit? And you know, and continually testing that early on with your customers. And that takes time, you're not going to get that overnight.
Yeah. I mean, how do you find product-market fit? I know, it's a big question. But I guess related to that is how would you know when you have it?
Nicole Denholder 16:27
Yeah, I’ve been doing some research on this recently, and there's actually, there's a, there's something called the Sean Ellis Test or something called the 40% test. And so what you can do, and I think this is important, once you've launched as well, this test actually, I think is more important, once you've launched a new kind of reviewing and really checking how your customers engage with you. But if 40% of your customers ask them “How disappointed would you be if we stopped our service or product?” and if 40% said, “we would be very disappointed”, you know, you have product-market fit. So that's a general line, it's called the Sean Ellis test. So if anyone's listening, you can go have a look at that. A number of companies have used and shared their own results. And you include that in a broader survey. But it's those types of questions of understanding. If you close down today, how disappointed will people be? If you've if you're not there any longer and the impact that you would have? I mean, that's a big number, I think for some businesses, but it's just giving you an idea. That's the type of thing you should be thinking about is how engaged your customers are, how often are they coming back to you? How sticky are you? You know, are they buying more every time they come? Are they doing word of mouth referrals? You know, do you find that the press is coming to you? You know, these things, if you're getting good press, you're getting referrals, there's growth. You know, it doesn't have to be up that typical hockey stick. But if it's trending upwards, that's a great sign.
If people are buying your product and ideally, flying off the shelves, then that you're there, right? Yeah. I mean, it's so stressful. Being an entrepreneur, just to get to that point, takes a lot of effort, takes a lot of time, takes a lot of different experiments. And mental health is something that all founders, you know, ended up having to deal with. Because it can be lonely, it can be tiring. It's also one of the biggest problems that we have in our world today that's so heavily unaddressed. How important is mental health to you as a founder? And how are you taking care of your mental health as you're growing these companies?
Nicole Denholder 18:40
I think it's hugely important, I mean, burnout within the startup community as well acknowledged. And also not just burn out a few. But the impact on your personal relationships. I mean, we don't talk enough about that, that if you are wholly consumed by your business, which is easy to do. I mean, that impacts the time that you spend with partners, family, friends, you know, other activities you're doing right can fall by the wayside quite quickly. So we might make two recommendations, and particularly if you're a sole founder, which, you know, a large number of women are sole founders, so you don't have someone to bounce ideas off. So I think that if you can find a mentor or an advisor or someone that you can chat with to help you bounce ideas, it is very useful. If you don't have a co-founder, if you have a co-founder, I think you are really trying to understand the relationship between you. You can be honest with each other and communicate regularly. So that together you don't, you know, you know, put pressure on yourselves in a way that's unhealthy rides. I think that's really important is having an outlet to talk about the business, and feel that you can keep moving forward with it. Someone you can trust to talk to. The second thing is time management. And I really schedule your time. The problem is as a business owner, there are 1000 things to be doing all the time and some of it can just be a long list of stuff right? And I think it's really trying to understand where are you spending, actually allocating time to spend on strategy, or business planning? Versus just working through a list all the time and really setting each week? What are the three top things I need to achieve daily? What are the three top things I need to achieve? You know, this, this concept of eating the frog? What's the hardest thing you need to do first? I'm bringing some of those things in, because I think that helps you feel like you're on top of things. Otherwise, it's easy to feel overwhelmed.
Yeah, it really is, especially for you know, if you have a remote team as well, you know, how does managing the stress for your teams? You know, how do you do that, especially in our remote work world nowadays?
Nicole Denholder 20:46
Yeah, yeah. And actually, our team at the moment is probably in five locations. So I mean, I'm a big fan, I'm a big fan of tools like Asana, where you can move, work and tasks into, you know, it's, you know, it's a, it's a tool that, actually, therefore, you're not sending emails and emails and emails, you're actually putting your commentary in there, you know, you're linking you having contained tasks with contained responses. It's searchable. You can link it to Google Drive or other work you do. So I think it's finding apps and tools that can streamline communication, and streamline the way that you all work together. And that you're not pinging each other, you know, all the time with back and forth messages, maybe in a messaging tool that also can, you know, you can get lost in right. So, to me, streamlining the communication, setting regular meeting times, having clear agendas, and having tools that you're documenting is really helpful. And setting deadlines. You know, it's easy in a sort of world just to go, go go go, we'll actually set some time frames around stuff as well.
Yeah, we've focused a lot on working asynchronously, you know, everyone being able to look back at each other's work at the time that they have, and it doesn't have to be at the same time. One final question. I have a couple final questions, especially but this one is, we talked a little bit about fundraising. And on the other side of that coin is a business's internal finances, and that's super important for any company or startup, and it's really hard for companies to be cash flow positive from day one. But how important is a company's finances and income? What starting out in a business, and especially in our world now, where there's a lot of market turmoil, like what advice do you have for companies who are just going for growth and are looking to make profits? You know, how should people look at that?
Nicole Denholder 22:49
I think you have to be on top of it as early as possible, if not from day one. It's so important because a lot of businesses are driven by passion or some other goal. And the reality is you need to know your data, because you need to have that sense of satisfaction around building a financially viable business, along with hopefully achieving maybe impact goals or market goals is all really critical. And I think and it's what I love what you do at gini, is it having tools there that are easy to use, that are affordable, that kind of plug-in, you know, I'm all about streamlining processes that kind of comes from my old background and been obviously to be honest, I feel like I've definitely brought that with me. It's having tools and ways to work that make that easy. So you have data at your hands, because actually being able to look at your data and make decisions based on how things are going is really important. And if you don't know your finances, and are not looking at them regularly, it's very hard for you to know if you're doing the right thing. So when we talk about things like product, market fit and iteration, but how do you know you should be iterating if you don't really have a good sense of sales, customer acquisition costs, you know, your return rates of, you know, purchases, how that all comes into play, and using different data points and driving down to really understand where your business is going? And I think if you've got that mindset very early, that commercial mindset about your numbers, I think you have a greater chance of success for your business.
For sure, completely agree with that. My last question is more general, what advice would you give to someone who's trying to be an entrepreneur?
Nicole Denholder 24:28
It's like Nike, just do it. You know, there's never a good time to start. You know, it's, it's not going to be whatever you think it's going to be, it's probably not going to be like that. So don't worry, just do it. And if you're successful, great! If you're not, you have learned so much, you know, and take that forward with you as well. So, my recommendation is, just do it because you will look back and think why didn't I start this last year the year before? You know, you just end up passing too fast. So I know we now I'll talk about maybe market conditions aren't ideal. But you know, you can be doing your research or understand your product-market fit. If you don't feel it's ideal to go right now you can be doing other work on that business. So yeah, just start.
Thanks so much for the advice. It's all actionable and practical. And I'm sure a lot of our listeners will appreciate that. Nicole Denholder, thanks for being on the show. And wish you all the best in your business. Next chapter. How can people find you or reach you if they want to get in touch?
Nicole Denholder 25:31
Great. So if you're a founder, or an investor, or a corporation looking to support female founders, because we partner with a number of corporations across Asia on that, look at actually and Europe actually is https://www.nextchapterraise.com/ . And if you're listening to this, and you're someone looking to get a better understanding of your kind of financial situation as an individual, you know, around your money basics or interested in an introduction to investing. And we do that at www.sophiawomen.com . So you can look there.
It was great speaking with Nicole. In business, passion can burn hard, but if you keep your eye off the ball, you can end up losing focus on the important things. And one of the most important things you need to focus on is on the bottom line. Thank you, Nicole, for coming on the show and sharing your deep insights.