Where is the fun in Fund Raising?

Playful Journey of Fund Raising at Lune

Starting a company is an adventure, especially when you’re diving into the physical products. Building a product, marketing it, and selling it requires not just significant capital but also a lot of creativity and fun. Let’s be real, fundraising isn't exactly a party, but this is the story of how we embraced the fun side of raising funds while building our company. For over a year, we poured our hearts, souls, and personal savings into developing Lune, treating every challenge as an opportunity for a creative solution. We bootstrapped the company, working tirelessly and having fun along the way to create something we believed in.

Our breakthrough moment came at SXSW 2023, where we made a playful twist by crashing the Creatives Industry Expo with our Lune strapped to a trolley cart. The response was overwhelmingly positive, and it was clear that we need to apply such fun approaches to fundraising as well. Lune was ready to take on the next phase.

However, securing funding for a physical product is more challenging than raising funds for a software startup. In Silicon Valley, where AI and SaaS were hot trends, hardware startups are the antithesis of unicorns. For us, pursuing venture capital that early, also felt daunting due to potential time consumption and dilution of ownership.

Demo and Dosa Night

Raising for Friends & Family (And not Fools)

Most successful ventures started with friends and family believing in the dream. These early supporters aren’t just providing capital; they’re buying into your wild adventure.

We wanted our fundraising process to reflect who we are—honest, fun, and true to our roots. And so, "Demo and Dosa Night" was born. We invited interested friends and family to our house. The evening began with an in-depth demo of Lune, showcasing all the love and dedication we poured into it.

After the demo, we transitioned to the kitchen, where we made dosas (a South Indian savory crispy crepe) for dinner. Over delicious food, we discussed the business, investment opportunity, the process - What's an SPV? What's a SAFE?, in a relaxed and enjoyable atmosphere.

Our success is a reflection of the support of our family & friends.

Dosa

Dosas are like the South Indian cousins of crepes. While crepes are soft and delicate, dosas are crispy and golden-brown, made from a fermented rice and lentil batter. Making dosas is a bit more of a culinary dance: pour the batter, swirl it on a hot griddle, and watch it bubble and crisp up. Fill them with spiced potatoes, tangy chutneys, or savory veggies for an extra kick. It's a fun twist on the classic crepe experience, blending unique flavors and textures into every bite.

Special Purpose Vehicle

An SPV is essentially a Limited Liability Partnership (LLP) set up by the founders. As general partners, we would manage the LLP, while all investors would become limited partners. The LLP would then invest in the startup as a whole, keeping our cap table clean with just one entry. This structure allowed us to invite friends and family to invest without creating an administrative nightmare.

Imagine a SPV is like forming an investment club for our friends and family. Picture it as a special group we set up and manage, where everyone who wants to invest becomes a member. This club pools everyone's money together and then invests it all in our startup as one big chunk. This keeps our official records clean and simple, showing just one investor instead of a huge list of individual names. So, it's like having a team of backers cheering us on and supporting us without the hassle of dealing with tons of paperwork. It's a fun and easy way for everyone to get involved in our adventure!

SAFE - Simple Agreement for Future Equity

A SAFE is a simple agreement where investors provide funds now in exchange for the right to receive equity at a later date, typically during the next round of funding. This arrangement allows us to raise money quickly and efficiently without the need to determine the company's current valuation. Investors are essentially betting on our future success, with the promise that their investment will convert into equity when we reach our next fundraising milestone.

Think of a SAFE as a backstage pass to our future success. With a SAFE, investors give us money now and get the promise of owning a piece of our company later, usually during our next round of funding. This way, we can quickly raise funds without the hassle of figuring out our current worth. Investors are basically betting on our potential, and when we hit our next milestone, their investment transforms into equity. It's an exciting and efficient way to support our growth journey!

We’re raising $150,000 with the help of family and friends using a Special Purpose Vehicle (SPV) that allows our loved ones to invest $500 or more.

Fun Raising

Creating this comfortable environment made the fundraising process less intimidating and more enjoyable for everyone involved. It didn’t feel like a formal business transaction; instead, it was a gathering of friends excited about our vision.

Fundraising doesn’t have to be a daunting task. By infusing fun into the process, we were able to navigate the hardship of fundraising at a company with enthusiasm and joy. Our experience with Lune has shown that a playful approach to raising funds can lead to not only financial success but also a more fulfilling and engaging entrepreneurial journey. So, whether you call it fund or fun raising, the key is to enjoy the ride and let your passion shine through every step of the way.

As we gear up for our next funding round, we've learned it's smarter to raise money when you already have some. Staying true to ourselves, fostering a supportive environment, and making fundraising enjoyable has been key. Starting a hardware company is tough, but with a great product, a supportive network, and some creativity, we've turned challenges into exciting opportunities.