Having built one of New Zealand’s largest ICT recruitment agencies and as an active early stage investor himself, Josh Comrie is a familiar face in the New Zealand tech startup community. Recently he experienced a case of role reversal when it was his turn to pitch for investment for his new AI startup Ambit. #nzentrepreneur editor Richard Liew asked Josh what it was like having the shoe on the other foot.
Startup founders often report that the most stressful part of their role is not the long hours and sleepness nights, or dealing with a seemingly endless raft of technical, staffing or business development difficulties, but rather the process of preparing for, finding, pitching and negotiating the often vital lifeblood of early stage businesses – angel or VC funding.
So when we spoke to seasoned investor – now tech startup founder – Josh Comrie, about his experience closing an oversubscribed $1.75M capital raise from investors such as K1W1, Lewis Holdings and NZVIF, we were intrigued to hear his take on the process.
Comrie’s current “day job” sees him fronting AI conversation platform Ambit as founder and CEO, but he has been an active investor in early stage companies for nearly two decades and is a founding member and director at prominent angel investment group Flying Kiwi Angels.
Having been on the receiving end of countless investment pitches himself, we wanted to know how helpful his experience as an investor proved to be when it was his turn to go ‘cap-in-hand’.
His assessment? Let’s just say that if you have ever been through this process yourself, you might be comforted to hear that despite all his years as an investor, Comrie insists nothing had prepared him for the experience of being a fundraising founder. A grueling experience that he says, despite his own knowledge of the investment process, still required two months of intensive activity just to get through the due diligence.
“I couldn’t have anticipated how different it is to be on the other side of the table even if someone had sat me down and walked me through it,” says Comrie.
“It’s just so different being an investor versus being an entrepreneur raising money. It has made me a more balanced investor from the perspective of understanding the entrepreneurs journey.”
A not uncommon sentiment among founders is the difficulty of conveying the opportunity they see in their minds-eye, in a way that makes the opportunity compelling to would-be investors.
“When you’re in the thick of it… you have great clarity on the forces that will impact on the businesses success. From your go-to-market proposition, to competitor movements, to customer demand and stories, to staffing needs, to pain points across your own business. You look at it all day everyday.
“But investors dip in and dip out of that, and will be looking at multiple [opportunities] at any one time. They’ll only ever have a surface understanding of what your business is, what your technical competency is, the problems you’re endeavouring to resolve on behalf of your customers, how you go about delivering your revenue model – they only ever get a little snippet of insight into it.”
Comrie also acknowledges the patience and perseverance required when seeking capital.
“I found myself going through repeated exercises of having to educate people on the business, particularly given our type of business – firstly, being artificial intelligence; secondly, being delivered across a Saas medium; thirdly, creating experiences that were unfamiliar to people.
“There were so many different touchstones within the business that were unfamiliar to people so they couldn’t draw any comparison point and so you find yourself continuing the education exercise whilst trying not to get too bogged down in the detail and ensuring you’re focused on the long term and the future prospects of the business.
Comrie says adjusting your messaging to match different types of investor profiles and their unique motivations is key.
“As an investor you’re not buying the “today” business you’re buying the “future” business – you’re not hoping for a dividend return, you’re wanting a great exit in the future.
“So [as a founder] being able to inform people sufficiently… take them on the journey… get them excited… give them the right level of information whilst not feeling the frustration that can arise because you’re telling the same people the same thing just in a different way, or you’re telling 10 different people the same story repeatedly – it’s just a thoroughly different exercise.”
Comrie describes Ambit as an “omni channel” AI driven conversation platform. They harness artificial intelligence, natural language processing and machine learning to help organisations automate the countless conversations traditionally carried out by staff during interactions with customers, team members and suppliers.
The Ambit platform enables deployment of services in the form of automated text based “Messenger” type conversations (think chatbots), voice and voice-to-text conversations, and even digital avatars – “seeing” and “hearing” screen-based bots with human like faces and increasingly sophisticated verbal and non-verbal conversational capability.
With 15 current enterprise customers in New Zealand and Australia including names such as ACC, Tower, KPMG and Hallensteins Glassons, Comrie says funds from December’s round will be allocated evenly between product development and “go-to-market”, including key sales hires.
As if running a cutting edge technology startup and an active angel investment group wasn’t enough to drive the average person to distraction, Comrie somehow also manages to juggle what he calls a “reasonable sized” commercial and industrial property portfolio along with all the usual family, friend and community commitments.
Rising at 5am for exercise and meditation are integral parts of the success formula he says enables him to stay on top of the many varied roles in his life at any one time – something Comrie refers to as a “portfolio” life which requires the careful balancing of sometimes many conflicting demands.
That and grouping “like” things together when allocating his time, what Comrie calls “chunking things down”, are key for productivity.
“Meditation is about clarity of mind and cleanliness of mind and one of the reasons I don’t need a lot of sleep is because of my regular meditation practise.”
And how does Comrie compare his current journey with the building of his previous professional services business, the ICT recruitment company Potentia, which he exited in 2015?
“That was a fairly simple professional services and go-to-market model, and so it was a very different proposition than the Ambit business, which is a genuine bona fide startup. The challenges, the execution, the cadence and all the things you have to deal with are so different in a genuine startup.
“Everything is unproven and you’re constantly dealing with uncertainty. I frequently step back and think to myself, ‘Imagine if my first business had been a startup?’
“It would have been overwhelming. It would have been a phenomenally different and difficult experience.”