Introduction to Nadya and Liquify
Q: Can you tell us about yourself and what Liquify does?
A: I’m Nadya, one of the CEO and Co-founder of Liquify, we operate in a marketplace that’s all about connecting SMEs in emerging markets with financiers. Our current focus is largely on Africa, but we’re also extending our reach to Southeast Asia and America. Our platform provides a unique service where companies can sell their invoices to secure capital. This is particularly beneficial for businesses in these emerging markets, where accessing traditional forms of financial support can be more challenging.
Q: What inspired the creation of Liquify?
A: My journey towards founding Liquify began during my time at Citi, where I was part of the Bank Street Finance team in Asia. As a product instructor, my role involved working with both corporates and smaller clients, helping them access trade financing. It quickly became clear that Citi, being a major player in trade finance globally, was primarily focused on corporates. This left a noticeable gap for SMEs, many of whom struggled to gain access to these financial services.
In my interactions with SMEs, I realized how significant this lack of access was. Most SMEs were not catered to by larger financial institutions, highlighting a substantial need in the market. This realization was the spark that led to the creation of Liquify. We aim to bridge this gap, providing SMEs in emerging markets with the financial solutions larger, more corporate-focused financial institutions often deny them.
Joining Techstars
Q: What led you to participate in the Techstars program?
A: The main attraction for joining Techstars was its extensive network. This includes not just the founders in our cohort but also the alumni from previous cohorts. Additionally, Techstars offered access to a wide range of mentors, especially in Europe where we wanted to expand our network. Being one of the largest accelerators, Techstars provided us with valuable connections and resources that were crucial for our growth.
Techstars Application Process Explained
Q: Could you outline the process of applying to Techstars?
A: The application process for Techstars started with an online form, which my colleague Michael took care of. It was fairly straightforward, taking about 10-20 minutes to complete. We already had some of the answers prepared since we were in the process of applying to new programs and had our pitch deck ready. So, applying those prepared responses made the process smoother. Following the online application, we had three interviews. The first was with a master principal, followed by two associates. I need to correct that actually, it was first with an associate, then with the principal, and finally, with the managing directors of the office. Each of these interviews lasted about 20-30 minutes. They focused on understanding us as founders, our company, the problem we aim to solve, and how our unique experiences position us to effectively address that problem.
Q: How competitive was the application process for Techstars, and what do you think distinguished your application?
A: The competitiveness of the Techstars application process is quite high. I believe the statistics indicate that only about two percent of applicants make it into each cohort. While there’s no direct way of verifying this, I know of at least five companies that applied for the cohort following ours, and not a single one was accepted, despite my high regard for them. What set us apart, I think, was our clear identification of a significant market need in a large market. More importantly, we were uniquely positioned to address this need. Sometimes, as I’ve seen with some of my peers who didn’t make it, there’s a belief in a substantial market and a genuine need. However, if the market is too small or the need isn’t as acute as perceived, then the product may not be viable. In our case, both from my experience and that of my co-founder (who was an investor in Africa), we had done extensive research. We spoke to over 300 SMEs, which really highlighted not just the size of the gap we aimed to address, but also its critical importance for these companies to access refinancing. Our backgrounds and experiences positioned us well to provide a solution to this issue.
Q: Is traction a significant factor in the application process?
A: In terms of traction, I don’t think it’s a strict requirement for Techstars. Our cohort was quite diverse in this respect. Some companies had considerable traction, while others were in the early stages, with only a few clients or conducting pilot programs. I’d say it varies, and traction is not necessarily a prerequisite for being accepted into the program.
A Typical Day at Techstars
Q: What does a typical day in the Techstars accelerator look like?
A: In our Techstars cohort, the structure of a typical day varied based on the focus of that particular day. Most days were dedicated to seminars covering a range of topics, from product-market fit and sales strategies to financial modeling and investor pitching techniques. These seminars would usually last for about two hours. Apart from Wednesdays, each day had its specific focus and set of activities. Alongside these seminars, we also had assignments or ‘homework,’ which were highly practical and hands-on. This involved working on our financial model, refining our pitch deck, or developing our sales strategy. What was great about these tasks was their direct applicability; we found ourselves actively using everything we prepared and worked on during the program. The approach was very hands-on and tangible, which was immensely beneficial for us.
Q: Could you tell us about the access to mentors and the level of support provided by the Techstars team?
A: The support from the Techstars team was exceptional. The team consisted of associates, principals, and a managing director, a structure I believe is common across all Techstars accelerators in different countries. Their approach was very hands-on. You could book time with any of them, but typically, each company is assigned a specific member of the Techstars team who aids in whatever you need. Depending on your company’s focus, you are paired with a Techstars member with relevant expertise. For instance, being a tech-focused company, we were assigned someone experienced in the tech sector. Companies more product-oriented had mentors with that specific background. Regarding mentors, Techstars conducts something known as ‘mentor madness,’ a rigorous two-week period where you meet with 15 to 20 mentors each day for 10 days. The objective is to pitch your product and refine your ability to communicate your vision and business effectively. If you can’t present your idea clearly and compellingly, succeeding becomes much more challenging. Following this intense period, you can choose up to four mentors to work with closely. While four is the formal limit, you’re free to keep in touch with as many mentors as you find helpful. These mentors are available to advise on any questions you have, offering tailored guidance and support based on their expertise and experience.
Q: How much funding did Liquify receive through the Techstars accelerator?
A: The funding we received from Techstars was fixed at $120,000. This amount is standard for companies participating in their program.
In exchange for the funding, Techstars takes a 6% equity stake in the form of a convertible note. This is a common practice in many accelerators, where a portion of equity is exchanged for the capital and resources provided.
Q: Is there an option for follow-on investments from Techstars in later funding rounds?
A: Yes, Techstars does offer the possibility of follow-on investments in subsequent funding rounds. However, it’s important to note that there are two distinct teams within Techstars that handle different aspects of investment. The accelerator team is solely focused on the accelerator program, while a separate entity, Techstars Ventures, manages full investments. This division allows for a more focused approach to both initial acceleration and potential further investment in a company’s growth journey.
Key Achievements in Techstars Program
Q: What was a major milestone achieved during your time in the Techstars program?
A: The most significant milestone for us during the Techstars program was the development of our product. A crucial part of this achievement was finding our lead engineer, which happened through our connections in Techstars. This was a game-changer for us, as it propelled our product development forward.
Q: Did Techstars assist in the recruitment process and user testing?
A: Absolutely. The most substantial aspect was the assistance in finding the right technical talent, particularly our lead engineer. As a business-focused team, assessing and identifying the key technical competencies required was challenging. Techstars provided invaluable support in this regard. We were able to connect with a tech-savvy individual from our cohort who assisted us with the interview process for technical roles. This support was critical in ensuring we brought on the right expertise to develop our product effectively.
Overcoming Challenges in Techstars’ Program
Q: Were there any notable challenges you faced during the Techstars program?
A: The challenges we encountered during the Techstars program were typical of most startups, not necessarily specific to the accelerator. These challenges were mainly related to product development and engaging with customers, which are common hurdles in the early stages of a startup.
Q: How did you address these challenges?
A: We managed to overcome these challenges primarily through the mentorship provided by the Techstars team. For us, the challenge was in building a new product that SMEs weren’t familiar with, which made it crucial to communicate clearly what we were offering and the benefits it brought. With the help of sales mentors and various training sessions provided by Techstars, we were able to refine our positioning and improve how we pitched our product. This guidance helped us make our product more understandable and appealing to potential customers, addressing one of our key challenges effectively.
Liquify’s Status Post-Techstars
Q: Can you update us on Liquify’s progress since completing the Techstars accelerator?
A: Currently, Liquify is in an exciting phase. We are conducting our second pilot with the product we developed during the Techstars program. This is a significant step for us, as it allows us to test and refine our product further based on real-world feedback and usage. Additionally, we’re gearing up for fundraising in the next few weeks. This move towards securing additional funds is a critical step in our growth journey, enabling us to scale our operations and expand our reach in the market.
Maintaining Connections Post-Program
Q: Do you continue to engage with the Techstars community and its members after the program?
A: Absolutely, we maintain strong ties with the Techstars community. In fact, we are still working out of the same office space. This ongoing connection has been vital for us. As you may know, being a startup founder can often feel isolating, especially when it’s just you and your co-founder. This sense of isolation can be even more pronounced in the current climate where remote work is so prevalent. For us, having a sense of community was crucial, and Techstars has provided us with that supportive environment. Being part of this community post-program continues to be an important aspect of our journey, offering not just professional support but also a sense of camaraderie and shared experience.
Liquify’s Next Steps and Techstars’ Role in Preparing for Them
Q: What are Liquify’s upcoming milestones, and how has Techstars helped prepare you for these?
A: Our next major milestone is fundraising to enhance our go-to-market strategy, particularly in African markets and with financiers. Techstars has significantly contributed to our readiness for this phase. They’ve helped us improve how we communicate our product to both sides of the marketplace and understand what a robust business framework looks like. One key lesson from Techstars is the importance of listening to customer feedback. They’ve guided us to prioritize customer needs over our assumptions about the product. This approach has been crucial in refining our product to better meet market demands.
Q: How exactly did Techstars assist in this process?
A: The assistance came through various means, including seminars during the program and ongoing communication with managing partners, our Techstars mentor, and other mentors. There isn’t a specific formula, but their guidance was pivotal when we faced challenges in understanding customer feedback. They helped us recognize that we might not have been fully grasping what our customers were telling us. Addressing this has greatly improved our interactions and product alignment with customer needs.
Q: Does Techstars also facilitate connections with venture capital firms and other potential partners?
A: Yes, Techstars has been instrumental in connecting us with the investment community. We were introduced to around 20 or 30 funds, and there was also a demo day post-program. This event was attended by several hundred funds in person, and possibly even more online. These connections are invaluable as we look towards our fundraising and expansion efforts.
Final Advice for Founders Considering Techstars
Q: What final advice would you offer to founders who are considering applying to Techstars?
A: The most critical piece of advice for founders thinking about applying to Techstars is to always keep the customer at the center of everything you do. It’s essential to be able to articulate clearly what your market is, why it’s significant and expanding, and how your company is uniquely positioned to address the needs of that market. Understanding and effectively communicating these aspects are key to not only succeeding in the Techstars application process but also in building a successful business overall.