KnowledgeHound, a JuntoIII company and the "Google" of market research, has secured $1.17 million in seed funding. The lead investors are Jeff Cantalupo with Listen Ventures, Mark Mitten, an independent angel, and Jerrold Marks. With the raise, KnowledgeHound is able to continue building its team. "We’re hiring a lead developer and a client manager intern, and a sales intern. By the end of the year we hope to hire four more employees," explains Kristi Zuhlke, Founder and CEO of KnowledgeHound.
As this was KnowledgeHound's first round of outside funding, Kristi explains that it was a steep learning curve. “It took us about nine months from start to finish to raise our round," she says. "It was a bit like dating. You had to find someone who liked you, but also who you liked. We underestimated the importance of finding an investor who was a good fit for us, versus just an investor who had money. It took about three months [just] to figure out what the right deal structure was. We leveraged our attorney, investors in the marketplace, and other startups. It was interesting to [learn the] differences between what a deal structure looked like in Silicon valley versus what [it] looked like in Chicago."
The company decided to keep the raise local so they could grab coffee with investors when needed. "We deliberately chose to stay in Chicago in order to have access to [them] as mentors. We also want to support the local Chicago community."
Kristi shares her three lessons learned from the experience:
1. NOT EVERYONE IS GOING TO UNDERSTAND THE PROBLEM YOU'RE TRYING TO SOLVE
"Investors who understand your marketplace are your most productive conversations. Even if someone understands your pain point, if they don’t understand the market size they won’t understand how big of an opportunity it is. The investor needs to have their own understanding of how big the idea is beyond numbers on the paper."
2. IT'S ALL ABOUT YOUR NETWORK
"I didn’t bring in a single source of money from an institution or an organized group of angels. It was all through individuals. I found that was the best fit for us with the independent angels. That was through networking Chicago a lot to get these meetings."
3. REEMPHASIZE TO INVESTORS THAT IT'S NOT JUST ABOUT THEIR MONEY
"It’s about their advice and what they can bring to the table. I knew that beforehand, but the experience reemphasized that with me. Startups can’t start a business by themselves. They have to surround themselves with people who are smarter than them in order to make their company grow. You need to do that with your investors, and absolutely do that with your network and your business experiences."
Congratulations to Kristi and the rest of the KnowledgeHound team on their successful round!