Investment - Michelle
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[00:00:00] Michelle: I remember going into a board meeting during COVID actually, and asking advice from the board on whether I should build A or B. And one of my investors said, you've just committed the worst sin of a founder.
[00:00:14] Juliet: Hello and welcome to the investment season of How To Start Up, a podcast for anyone starting or scaling a company.
[00:00:20] Hosted by me, Juliet Fallowfield, founder of the B Corp certified PR communications and podcast consultancy, Fallowfield Mason, where we teach you how to own your PR in house.
[00:00:30] Juliet: With sifted reporting that European startup funding has plummeted by 40 percent in 2023, maintaining open and transparent communication with your investors is vital to maintain such an important relationship. In this episode, I hear from Michelle Kennedy, co founder and CEO of Peanut, one of the fastest growing social media apps for women.
[00:00:49] Juliet: Michelle launched Peanut in 2017 to help women combat loneliness that can come along with being a new mother and has since raised 23 million in funding since its inception.[00:01:00] having raised an exceptional amount, Michelle has brilliant insights to share on the most effective ways to communicate with your investors.
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[00:01:08] Juliet: Hi, Michelle. Thank you so much for your time today on How to Start Up. It would be wonderful before we get into all things investment to ask you for a brief introduction as to who you are and a bit about the business that you started.
[00:01:19] Michelle: Yeah, hi thanks for having me. I'm Michelle Kennedy. I'm the founder and CEO of Peanut. Peanut is a social network to connect women across different life stages. So women who are going through their own fertility journey, or thinking about their fertile health. Women who are pregnant new mothers, all stages of motherhood and most recently women who are going through perimenopause and menopause.
[00:01:40] Juliet: And when did you start it and did you have to start with investment?
[00:01:43] Michelle: Oh yes, so we started in 2017 actually, so we've been going a while now with my old hands. And I started Peanut actually without investment. So I started with a bootstrap, which was my own money that I'd put aside, but it didn't last very long and it was very clear [00:02:00] pretty early in the journey.
[00:02:01] Michelle: Probably earlier than I think I would do again that taking external investment was needed in order to really go at the pace that we were already working at. So just to maintain the pace and to grow the team and to grow the product accordingly. So yes, we did take external investment.
[00:02:19] Michelle: We took institutional. investment. So not just from angels or individuals. And that again was quite early in the journey for an institution to come in. So definitely let's call it pre precede. Everything's got different names now, but
[00:02:33] Juliet: Well, I think a lot of people say that it's like, don't plan for failure, but plan for success. So it sounds like you started and it rocketed and you weren't expecting it to go that quickly. And that's where your pipeline might've got a bit smaller, I'm guessing why you went after it sooner.
[00:02:46] Michelle: Yeah, I think actually it was just around Building and wanting to get the build out and wanting to get the work started, but also then wanting to release the product. I would say that it was always our intention to raise. It was [00:03:00] always our intention to go out and take that investment on in order to scale.
[00:03:04] Michelle: So I don't know if it was. It didn't catch me by surprise, but in hindsight, whether it's the way I would run it again in the future, I don't know I would run it exactly that way.
[00:03:14] Juliet: expression experience is what you get after you've needed it. You're like, Oh, now I know.
[00:03:19] Michelle: Exactly. Hindsight's perfect, right? I think that my advice to anyone is always, for as long as you can and as long as it's possible, don't take outside capital. It's a luxury that not everyone has, and I'm very aware of that too.
[00:03:34] Juliet: Yeah, and something with a tech build. It's extraordinary what funding you need to get it done. And this episode we wanted to focus on communication because a lot of people say that when you take on investors, you suddenly have a whole new group of stakeholders that are not your clients, are not your employees, you're not suppliers, they're your investors.
[00:03:52] Juliet: Are there some really basic do's and don'ts around communicating with your investors?
[00:03:56] Michelle: That's a great question. I think that the key part of actually [00:04:00] communicating with your investors is thinking about what part they have to play in the journey of what you're building. And it's very tempting. Certainly it was for me. I'd come from a very different world where my engagement and role with investors was very much reporting.
[00:04:15] Michelle: Here's what I've done this quarter. Here's what I've done this year. Haven't I been a really good CEO and thank you very much. And can you tell me how great I am? Versus when you're in that kind of very early startup. Really when you're bringing people in, they're on the journey with you. So it's about being able to be as honest as you can be to say, look, here's something that's blocking me.
[00:04:34] Michelle: Is there a way that I can talk it through with you to help me unpick it? Or here's a problem that we've come across. I don't know how to overcome it. Is there anyone in your network that might be able to help? So thinking about being together rather than. You telling them, haven't I been really good and haven't I done really well?
[00:04:50] Michelle: And I certainly did not do that. For a very, early portion of Peanut. ,
[00:04:56] Juliet: You assume they just want the good news and that you've taken some money and you're doing well with it. [00:05:00] But actually a lot of people have talked about in this season about the fact that your investors aren't just about the check. They can open doors, they can support you, they can mentor you.
[00:05:07] Juliet: They want it to succeed too, so pull on that find investors that can add that extra level of support for you. And at the beginning, before you took their investment, were you vetting them as much as they were vetting you to check that they could add extra value?
[00:05:20] Michelle: Think that's a really good point. And I, the answer to that is simply probably not as much as I should have done. Initially and subsequently when you realize how important it is, then of course, yes, that is something that becomes part of the journey because there is this common misconception I find, which is, Oh, they want to give me money.
[00:05:41] Michelle: I want to give me money. And it's like, sure, but they also want to take. equity in your company. So you no longer own 100 percent of your company and they get something in return. That means by very definition you're in it and you're in it together and therefore you have to have a team that's going to pull and support and rally [00:06:00] around when you need it.
[00:06:01] Michelle: Everyone's great when everything's great. Full stop. So it's really about finding people who are either really key and critical to unlock your industry or really key and critical to champion you or really key and critical to make introductions and open doors that you simply cannot or have tried to and failed.
[00:06:21] Michelle: You are allowed to be it's not even selfish, it's just critical about who joins you on that journey because, if it's just cold hard cash, Maybe that's okay, but then you better make sure that you've got a really great network around you who can do those other things. And it's always better when people are very invested in you and your business to get the best out of them and the best support.
[00:06:42] Michelle: Yeah,
[00:06:46] Juliet: of Ollaback, the amazing menswear brand. They had investment from Joe Gebbia, who founded Airbnb and he said, my God, through the pandemic, he went through hell and back and he was the best person I could ever speak to about a crisis because he's been in it too.
[00:06:59] Juliet: And it's [00:07:00] finding people who are,, I know the answers to this. Let me help you. And it gave him all that support.
[00:07:05] Michelle: exactly. And also our calm, right. And can say, okay, this is not the worst thing by the way that you're faced because it's never the worst thing. In fact, the unknown unknowns are the things that are the worst thing, right? You just even if you've been on any kind of journey yourself in whatever capacity, the thing that felt like the end of the world probably wasn't the end of the world.
[00:07:24] Michelle: And having someone support you, who can help you navigate that is really important. And certainly in my own personal case, I don't think I really understood that until much later in my journey. Totally,
[00:07:41] Juliet: I think something that I've didn't realize when you start a business is that every day is a school day, you're always going to be knocked, you're going to have challenges and
[00:07:48] Juliet: it's just normal.
[00:07:49] Michelle: totally. And it's really about even if that person or those investors haven't experienced it, do they know people who have, do they know people who can make the introduction to [00:08:00] make that?
[00:08:01] Juliet: And 99 percent of people want to help as well. You just have to ask for it, which is not as humbling as you think it might be.
[00:08:08] Michelle: people love to help and people love to um, tell you. About who they know or what they know or who they're connected to. That's just how it works. Finding people who can unlock is really important.
[00:08:20] Juliet: And in terms of frequency, given time is the most precious element of running a company, how often do you find investors want to hear from you? Is it a case by case basis? Do you have a sort of a cadence that you often go out to your stakeholders?
[00:08:34] Michelle: I think that really depends on where you are and what stage you're at. Certainly in the early days, I used to do monthly. That became too much for me. It certainly became too much for the investors who are probably not reading monthly. We got into our swing of things by having a quarterly cadence.
[00:08:50] Michelle: Every quarter tells a different story about the time of year you're at. If you have seasonality in your business, whatever it might be. And so it was much easier. even for me to look at a [00:09:00] quarterly basis and a quarterly cadence because I can compare, what did that look like on last quarter? What did it look like on a year ago?
[00:09:06] Michelle: So agreeing with your team, their expectations but certainly for us quarterly is the best. And then of course there are externals outside of that. I have one investor who I speak to once a week. We just have a call and check in and that's really helpful. Where I can just run through some thinking or anything I'm stuck on and if we don't need it we cancel.
[00:09:28] Michelle: So it really does depend, but reporting quarterly and then ad hoc outside.
[00:09:34] Juliet: And from a practical perspective, are there key things that you include in that report as a mandatory, we need to report on this, or do you have that basis and then every quarter add on some sort of topical news, like how do you structure it?
[00:09:46] Michelle: Yeah, for me it's always about, here's the metrics that we've been tracking and here's how they've performed this quarter. I like to set it out as here were the targets for the quarter. Here's how we performed and here's how we're tracking, by the way, against, the next [00:10:00] quarter.
[00:10:00] Michelle: So I like to give a historical and then a almost contemporaneous. Here's how we're looking for the next. I love to talk about what we've built. I'm a product person. I love products. And so I'm always really excited to talk about here's what we've built and here's what we've learned. Another thing that I was, used to be awful at because I used to feel like I was expected to know it all.
[00:10:19] Michelle: I didn't like to talk about the things that went wrong or the things that didn't prove or bring forward the results that I thought they would. And, Now it's part of it, right? So I'm much more open about, okay we spent a quarter building this. We've launched it. It didn't work. Here's what we learned.
[00:10:34] Michelle: Here's what we took away. Here's how we're doing it again. So I like to do that. I generally speaking have to cut down how much I say about products. Otherwise I will just dominate our board on that. And then. Yeah, we have an AOB. I try and get people to send in anything for AOB ahead of, if they've got any questions in advance, so I can be prepped, so we can use the time.
[00:10:52] Michelle: And always at that point, if I've got asks, and I have listed them before, so what do I need from them? Is there something, an intro that I need? Is [00:11:00] there an opinion that I need? Is there a consent that I need? Whatever it is, I make sure that that's in the last part too.
[00:11:05] Juliet: And from a practical perspective, do you use a particular email system or, like, what platform do you use to do your reporting in,
[00:11:12] Michelle: I put together a board pack and I send it out. I'm probably very old school. I, as an investor myself, I get sent updates via Notion. I get all sorts of different updates. And honestly, you have to do what works for you and what's easiest and most productive for you. I have one company that I've invested in and I love their style because they do the good, the bad and the ugly.
[00:11:36] Michelle: And so every quarter I get the good, the bad and the ugly and I love it. I know exactly what I'm reading, I know exactly what to expect from the update. And
[00:11:44] Juliet: And you can scan your eye, you know the format it's coming in, yeah.
[00:11:47] Michelle: You find out what works for you. There are loads of examples out there as well of things that work.
[00:11:52] Michelle: I'M a storyteller. So I have to take everyone on the journey of what we did and what we learned. And, but some people are much more kind of, here's what it was, here's what [00:12:00] it's going to be next. You find your style,
[00:12:01] Juliet: And as you're an investor as well, do you think that investors always just want to hear from the founder or do they want to hear from the wider team? Time
[00:12:10] Michelle: a really great question. I have trialed it, actually in Peanut, where we have had other people in the team. Present it depends. I think it depends and it depends on why what's the purpose of it? Is it because you're going to pivot your entire product, for example, and therefore you need your CPO to present.
[00:12:29] Michelle: It depends. Largely speaking, I am so obsessed with my team's time that I do it.
[00:12:37] Juliet: Is the most precious element I've found and it doesn't go away and it's finite. There are only 24 hours in the day. So have you invented a magic wand yet to find more time?
[00:12:47] Michelle: I think one of the things someone said to me earlier is the most powerful thing you can do is say no. And I'm not good at saying no. But I think saying no does give you the ability to free up time. Linking it back to the question of having [00:13:00] other people involved in investor updates or board updates I would prefer to say no on behalf of my team so that they can crack on they can do things I can't do.
[00:13:09] Juliet: And that's why they're there. And for me, I feel like the founder knows the business better than anyone. And for us in our day job, when we teach founders how to do their own PR, they will know every nook and cranny of that business and be able to articulate it succinctly, efficiently, and to a board who are wanting those answers quickly, because they're time poor too.
[00:13:27] Juliet: It makes sense. But going back to asking advice from them, do they offer it willingly or is it something that you need to set out from the beginning when you go into that relationship?
[00:13:37] Michelle: yOu will get some investors who are very opinionated, who have a very clear idea on how you should run your business. I have a couple. And the key for me actually is zoning in on them when I really need it. If I'm stuck, I don't know how to do this. Guaranteed they've got a view.
[00:13:54] Michelle: Guaranteed they've got an opinion on how we should do it and what we should do. You might take nuggets of it, you might go [00:14:00] with it completely. It depends. So I think having a good mix, what you don't need is a cap table full of people who have a very clear vision on how you should run your business.
[00:14:08] Michelle: I remember going into a board meeting during COVID actually, and asking advice from the board on whether I should build A or B. And one of my investors said, you've just committed the worst sin of a founder. Don't ask me. Which one you should build. And, there were other members of the board who were like, Great, love this, let's talk about it let's discuss it.
[00:14:30] Michelle: And he really called me afterwards and said, It's you. You can ask our opinions. You can, say this is what I'm leaning to. But, really, I would advise you against that. And I've never done it against him.
[00:14:41] Juliet: I was gonna ask, are there any really obvious faux pas that you should just avoid at all costs?
[00:14:46] Michelle: I don't even know if that was a faux pas. The rest of the board seemed to love it and wanted to get really into the detail of it. But he really said to me, this is your company. This is your vision. We've invested in you.
[00:14:55] Michelle: You know the answer. You can ask me for, my, feel or my [00:15:00] steer, but don't ask me which, and I think from that moment I was like, yeah,
[00:15:06] Juliet: Is that because you're rocking their faith in you? They come away thinking that you don't know it as well as you do?
[00:15:11] Michelle: Actually, just because he was like, have confidence, so don't ask for permission. You know the answer. So be confident in that and go with it. You don't need, a group of men at the time to tell you what the answer is when you know what the answer is.
[00:15:24] Juliet: Well, actually, that's one thing talking to your cap table, but how much proactive communication do you do externally on your investment? Do you proactively go out publicly with what's going on with the business
[00:15:34] Michelle: we don't do a lot of business PR. I rarely do PR, which is about, how our metrics are growing or what revenue we've done or at a push, we might talk about an investment. But even then we often don't do those either. And the reason it's actually to do with peanut and the fact that yes, we're a business and of course, everything I do behind the scenes is a business, but actually the [00:16:00] outward facing part of peanut is we make women's lives better. And so the press that we do, and that we focus on the stories that we tell a much more around.
[00:16:10] Michelle: Here's what women are using the app for, here's what they're doing on the app. Here are issues and content and surveys and results that matter to our women. And this is indicative of women, across the country, across nations, whatever it might be. There is a reason for it, which is it's not right for our business.
[00:16:29] Juliet: But also it's that coverage that will, if you are trying to PR the business to future investors, they'll be looking at that consumer coverage over the trade
[00:16:37] Michelle: Correct. Correct. And I think it really depends. If you're a SaaS company, of course you need to go and do that trade PR, right? It's very important, but for us, and where we see the most rewards from PR, and PR is so important. I, if you Google peanut, And click news, or images, you'll see it.
[00:16:58] Michelle: I believe in [00:17:00] the power and the value of PR and storytelling so much. Because if you can't tell your story so that other people want to share your story then I don't know how you get that consumer loop in. I think it's really a huge part of building any consumer product. So I'm a huge advocate and I believe in it.
[00:17:18] Michelle: And I think it's really important skill of any founder. But I just for the nature of peanut, I don't do a lot, a huge amount of business or trade PR.
[00:17:27] Juliet: Well, communication, a lot of people have talked about in this season about when you're pitching for investment, your debt needs to be strong. Your business needs to be strong, but it's actually the founder and how the founder communicates their business to investors that. Tips them into investing.
[00:17:40] Juliet: They need to be so convinced that the founder is the right person to lead this business would you agree with that?
[00:17:45] Michelle: Absolutely. . Peanut is a huge team, right? And everyone on the team is, vastly superior to me in terms of ability and intellect and what they do is incredible. But for them, we wouldn't be [00:18:00] able to produce the product that we have. However, have a duty to them to be able to go and articulate what it is that we're building and why that matters and why people should care about that.
[00:18:10] Michelle: Similarly In order to attract the best possible talent and get those people to come and work for Peanut, they have to believe in me too. They have to believe in the vision that I tell them and what we're going to build and why it matters and why it's important. It's important for hiring, it's important for fundraising, it's important for the success of your business when you're storytelling widely.
[00:18:32] Michelle: And that doesn't mean that you have to do anything other than be honest about the journey that you're on, what you've done, where you're going, what the landscape looks like, why what you're doing is different, why you're the only people to solve it. Yes, I do think it's on the founder but I think it's on the founder, not just in, fundraising, in a whole host of areas.
[00:18:55] Juliet: Definitely. We talk about B2B, B2C, but I also talk about B2E, so business to employee in [00:19:00] the sense that for me, starting from scratch, I was so transparent and actually it's where we scored really well in B Corp was the fact that we were so transparent and open with the people that are our stakeholders and someone said when they were interviewing me and I was interviewing them to join the business, she said, I joined because the order of priority, you put team clients and then everything else and I was like, well, that's just.
[00:19:21] Juliet: The privilege I have and she said, well, getting to know you and how passionate you were about it really meant a lot to me. And I was like, this is amazing. This is wonderful. They have that opportunity to set it out like that as well. Brilliant. So something that we do is a guest from the previous episode asked the next guest of question.
[00:19:37] Juliet: And we had day John in the last episode, who is the founder of. A whole leaf company, which is beautiful I think it's waste palm leaves that he makes into sustainable plates insanely brilliant. He was talking about all things Dragons Den, but his question for you was if you were paid a million pounds by someone else to do this job, would you still do it?
[00:19:55] Michelle: I've been paid nothing for years by Peanut. It's never about [00:20:00] that.
[00:20:00] Juliet: I was thinking about this question saying, does he mean that you give up your autonomy and your freedom and someone else writes you basically a blank check to work for them? Would you give up that freedom or autonomy because there's two ways of looking at this
[00:20:10] Michelle: Oh, would I give up working at Peanut for a million pounds?
[00:20:14] Juliet: well,, I think he might've phrased it. It's like, if you were paid nothing, would you do it? Which obviously you would, I've heard you speak a hundred times. You believe this is your life's calling, but I wonder if you could also skew this question saying if you were paid a million pounds by someone else.
[00:20:27] Juliet: To do this job. They were your boss. They were leading peanut. Would you still do the role that you're in
[00:20:31] Michelle: it's such a difficult one. So if I didn't run peanut exclusively with my own kind of autonomy and I presume there's no caveat on that. I can't say as long as they were, on the same page as me. And,
[00:20:44] Juliet: think this feeds into the sense that someone said to me very early on, it's like, now you're self employed, you're never going to get another job anywhere else, because everyone else on your side of the fence knows that you know what it's like. And you you've got this sense of autonomy and freedom and independence, and you can set your company culture as you want [00:21:00] and lead it how you want.
[00:21:01] Juliet: To give that up to me would be a huge sacrifice. I think, I don't think I've worked this hard only for four years, but to then go back and tow somebody else's line, I don't know.
[00:21:13] Michelle: I think the answer for that has to be like, what does it do for the business? So if it makes peanut grow faster, stronger do we dominate this? But like, what does it do for peanut? Because if it's in the best interest of the company and therefore our users, yeah, I'll do it. If it's just the money and that doesn't have a good impact on the business, well, I didn't work as you say, this hard for this long and make the sacrifices I have.
[00:21:43] Michelle: Just to ship out for a dollar now. The answer is it depends on whether it's good for the business or not.
[00:21:51] Juliet: And what would your question be for the next guest?
[00:21:52] Michelle: My, I love when people are really honest. My worst nightmare is when someone does the whole, and then I woke [00:22:00] up and we'd sold 50 million copies and, we were at the top of whatever. My question is, what's the worst day in the office?
[00:22:07] Juliet: What's the worst day in the office? Yeah. Oh God, that's a good one. Because there are many, and
[00:22:13] Juliet: this is something people don't realize.
[00:22:15] Michelle: That's it. And because we don't talk about how hard it is and we don't really encourage people to be as honest as they can be I think that oftentimes founders in particular can feel really like, Oh my God, I'm the only one this has happened to, and it's not until someone else says, Oh, you think that's bad, which I tell you this, that you start to feel like, Oh, this is totally normal and part of the journey.
[00:22:37] Michelle: So what's been the worst day in the office?
[00:22:39] Juliet: I might go back and ask 93 previous guests that question and do a whole episode of voice notes of just terrible, horrible stories that make,
[00:22:49] Michelle: important, right? I've got a little group of women and we go for dinner and we're all founders at different stages. That's what makes it interesting. We've got someone who's really early. I'm probably the furthest along and in [00:23:00] between. And we go for dinner and we just talk about, Oh my God, guess what happened?
[00:23:04] Michelle: And it's like therapy.
[00:23:06] Juliet: Problem shared is a problem halved.
[00:23:07] Michelle: Absolutely. You go back into like the office the next day and you're like, okay, it's happening to all of us all the time. And you just have, you move through it.
[00:23:16] Juliet: Thank you, Michelle, so much. It's been lovely chatting to you and thanks for all your words of wisdom on investment.
[00:23:21] Michelle: Thank you so much for having me.
[00:23:22] Juliet: If you'd like to contact Michelle, you can find all of her details in the show notes, along with a recap of the advice that she has so kindly shared.
[00:23:29] Juliet: Thank you for listening to how to start up. I hope these conversations offer you some confidence, encouragement, and reassurance that you're on the right track. If you enjoy this podcast, I'd be so appreciative if you were to rate, review and subscribe as it will really help other people starting a company.
[00:23:45] Juliet: Discover