Paris Benson is no stranger to the world of tech and entrepreneurship.
The UCLA alum started coding at the age of 14, launched his first fintech startup at 16, and then exited at 19 while in college.
From there, he launched another fintech company that focused on free credit reporting, bringing revenues up to $1.3 million dollars a month. Afterwards, with a few college friends, Paris launched a fund where he gained experience on the other side of the startup table, but this time as an investor. While he was operating that fund, Paris then started Verifico, which was like Angie’s List, but for independent financial service providers. After Verifico, Paris launched what has become his fourth fintech startup, Wizely Finance.
Wizely Finance is a white-labeled lending platform that helps regional banks and credit unions offer debt consolidation loans to their customers. From from wallet share analysis, to marketing and loan origination, to directly paying off existing credit cards, Wizely helps consumers meet their financial goals.
Recently we were able to chat with the VC-backed fintech entrepreneur, investor, and full stack engineer about his experience launching and scaling startups, and his tips for early-stage founders. During our chat, Paris also shared his tips on mastering a quick pitch, and what investors really want and look for in a founder.
What is one of the first things that founders should focus on mastering?
“As a founder, your job is to find the absolute best people for your organization and convince them to join your business. That’s one of your first jobs as a founder, and you have to get really good at that.
Too often some founders skip that and instead they try to cover up their lack of selling the vision with money. You have to be able to pitch and get the right people for the right reasons.
In the beginning, your vision is all that you have. If you cannot get people to work for you and understand your vision, that may be an indication that you won’t be able to close an investor deal. That’s a good measure to see if your pitch and value proposition is strong enough.”
How can founders deliver a pitch when time is limited?
Sometimes the opportunity to pitch will come out of nowhere, and you can’t always control how much time you’ll have to pitch your startup.
“In the event you have a very short time frame to pitch (like a 15-second pitch), be sure to:
– Cover very simply what the product does – Is it a product or a service?
– Describe who the customer is very clearly
– Provide detail on how big the opportunity is, but really quickly
– Lastly uncover your secret sauce, your unfair advantage. Describe what makes you unique and why are you the founder to get this done.”
What should founders consider when deciding to raise money?
“First founders should know that there are so many other ways that you can make money and get capital for your business. Raising money isn’t for everyone and that’s okay.
If you do decide you want to raise money, you should ask yourself if raising venture capital is right for your business. If you decide it is, figure out if it’s something that you should be focused on now. You’ll need to figure out if your business model is more suitable for raising venture capital, or if it’s more suitable for private equity, bootstrapping, or getting money from friends and family.
You’ll also need to determine if your business has hyper growth potential and if it can grow into a billion dollar company. If you can determine that it has those qualities, and you can back it up, then it is possible that the company you’re building can be a venture capital-backed business. After figuring that out, the question of if you should raise and when you should raise will make more sense.
Too often, people start raising without figuring this out and honestly end up raising way too early. They haven’t figured out their product market fit and they try to raise venture capital off an idea, but it doesn’t quite work like that.
Once you have product-market fit, a scalable market, and you’ve figured out how to acquire customers, that’s when you can think about starting to raise venture capital. If you haven’t figured that out, VCs will not be interested.”
Should founders try to raise if they haven’t made any revenue?
“Not having revenue before you try to raise is okay. There are companies out there that I’ve invested in that haven’t made revenue yet, but they’ve figured out their product market fit, and they have a scalable pipeline.
People overemphasize the “need” of having early revenue but what they really mean is that there are steps that you need to go through and things you should have in place before you start making revenue.
There are things you can show traction on that’ll make you look good even if you don’t have revenue. For example, when you’re going into an accelerator, they want to know that you understand your market and the opportunity. You have to understand the market really well and speak to all of the assumptions about your market. Knowing how your business is going to scale will be critical when raising money. Sometimes knowing this is better than saying “hey I’ve made X-million of dollars” but I can’t answer any of those questions about my business.”
What can founders learn from your personal experience on raising money?
“The first time we raised venture capital, we didn’t necessarily need to, but I did it because I wanted to understand the process and formulate relationships with key players in the industry.
For certain businesses, you don’t need VC money. There are companies that are profitable, cash flow positive, don’t have massive, billion-dollar potential, but they are good small businesses. For me, I raised venture capital with this last company because it was a massively scalable company and I needed more resources to hire people faster, so we could get market share quicker, and not have to be focused on profitability. I wanted to focus on gathering as many customers as we could to prevent competitors from coming in. Being able to scale and grow fast is pretty much why you raise money.”
What mistakes did you make early on as a founder?
“I’ve always believed that if you’re not making mistakes, you are being too conservative.
Entrepreneurs are supposed to go where others haven’t gone. When I first started raising capital, I made common mistakes that many entrepreneurs make like talking to people that have money as opposed to strategically talking to people that can be of value to your business.
Also, I was too focused on valuation and deal terms, when I should’ve been focused on finding the right investors that I could trust that could help build the business with me. Through this experience, I learned that it’s better to take a good investor at a lower valuation than a bad investor at a higher valuation.
Another mistake that I made was that I started raising capital with a business plan because that’s what the world tells you to do. Later, I learned that investors have short attention spans and what they are looking for in short snippets is that you can communicate that you understand your business.
Over time I learned how to create an investor deck that was targeted for early-stage investors instead of a massive, lengthy business plan. I also learned that early on investors aren’t necessarily looking for you to be profitable. Investors simply want to make sure that you understand the market and that there is a big opportunity that your company is targeting.”
What should founders focus on when looking for investors?
“If you’re an early stage company, you’re going to want to find investors that are subject matter experts in your space for two reasons:
1) When you’re early, you need people that know the space you’re in because they’ll more likely be able to see the vision and can provide assistance. It’ll make it easier for you to close the deal and get the investment because you’re talking to someone that gets what you’re doing and they have a certain level of expertise.
2) It’s really important for early-stage startups to have investors that can add value because in the beginning, the most important thing that you have is your equity. As you get investments and give away equity, you’ll realize that cash is important but it’s not as important as what the investor can do for you to help push your company forward and reach those milestones.
As an entrepreneur, knowing how to properly pitch and approach investors is crucial. During your startup journey, be sure to keep Paris’ advice in mind so that you can be on the road to building a scalable and profitable business.
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*photo credit: Blavity*