Meaningful Business (MB:) As a climate entrepreneur, what has been your fundraising experience to date?
Kaushal Shah (KS): The experience has been very enriching so far, where we have raised over a million pounds to date and have found a great set of investors. envoPAP is currently on a Pre-Series A funding round, and the kind of interactions we are having are educating and inspiring us at the same time. Even when the discussions don’t materialise into investments, we get diverse insights and strategic advice that help us evolve as a company. The growing importance of ESG investments is excellent news for the planet and for companies like envoPAP that operate in this space.
MB: What are some of the hurdles you have had to overcome to raise investment?
(KS): As a third-generation entrepreneur from India who moved to the UK for his higher education and subsequently set up a business, raising investments here was hardly a walk in the park. envoPAP is headquartered in London, where we conduct all our Sales, Marketing, Operations and Product Innovation, and all our materials are manufactured in India and shipped to customers all over the world. Many investors have turned us down because of what we call ‘globalisation risk’, where they feel less in control of our operations outside the UK or Europe.
In our first round, we raised £1.1 million and are currently raising upwards of £3.5 million. Being a young entrepreneur (still under 30) with a young team and global ambitions, it has been somewhat challenging to raise funds because of my age.
MB: How did your experience change at different stages in your fundraising journey?
(KS): I had never raised funds before starting envoPAP, so onboarding new people onto your vision and giving them a share of your business was all very new to me. Luckily, I had a lot of guidance from Founders Factory, who were most instrumental, providing mentors and other founders who had done it before me. I gradually gained more knowledge and confidence, which added to my experience, and I could see myself answering the questions better and moving from one round to another.
In the process, I gained greater clarity of purpose and became a better pitcher than I ever thought I would be. Understanding the psychology of an investor is very important, so you can present the information accordingly in pitch decks that must be succinct yet inspiring.
Through these multiple investment rounds, we evolved as a company, and the sector too, has evolved. More ESG funds are available today, and I hope this space will continue to see disruptive innovation.
MB: What were you looking for in an investor beyond money?
(KS): Apart from the capital, we also look to our investors for their advice and varied perspectives to help our business grow. They come with invaluable experience that we learn from and implement at envoPAP. Many of our angel investors have built successful businesses and exited eventually, so it’s great to learn about the journey of a company from a start-up to scale-up to IPO or exit, from the horses’ mouth, as we too would like to emulate that trajectory.
MB: What do you believe needs to change or improve within the investing ecosystem, to make capital more accessible?
(KS): Although there are more ESG investments being made today than ever before and there are more funds available, I don’t think this is being marketed effectively enough. I am on the lookout for investors who can add strategic value, but they are very hard to find. Although we have apps like Crunchbase that help with this, I think the government could play a bigger role by actively promoting investments funds that are focused on our sector.
The mandates of these investments need to be better advertised so entrepreneurs know exactly who to contact and the investors too would receive better applications that are in line with the goals of the funds. I also think there needs to be greater engagement at colleges and universities, where a lot of companies just like envoPAP are born.
MB: What advice would you give to other environment-focused entrepreneurs looking to raise capital?
(KS): An entrepreneur should look into raising capital only after three essential boxes have been ticked. First, you must build a good product that a customer accepts and uses to solve a problem. If it’s a green product, you must make sure you have the right certificates and credentials to avoid ‘greenwashing’, which is both rampant and unforgivable.
Second, when you start seeing repeat customers from different parts of the world it becomes clear that the product works everywhere and people are coming back for it.
Third, you must have the most accurate data on the market you operate in. No matter how dynamic your market is, it is very important to provide the right data to your investors, for them to make an informed decision.