When people find out you run a startup, one of the first things they ask is, “Have you raised any money and how did you do it?”. We always like to joke that we raised our seed round with a single cold email. But actually, it’s a true story, and as I told more people, I realised it was a story worth sharing.
Here’s a quick summary of what we do to put you in context. Over a year ago, two friends and I launched CityStasher. We help tourists/visitors find places all over London where they can drop their bags off. These places are local shops and hotels with secure extra space. You can think of it like Airbnb for left luggage, or a city-wide cloakroom service. If you’ve tried dropping your bags off at stations recently, you’ll notice what a rip-off they are; and there’s queues and dropping off can be a hassle. We pitched CityStasher at half the price, with far more places to choose from, some of which are open 24/7 for added convenience.
Jacob, Matt and Anthony, on the day of their last exam, June 2015. Keble College chapel steps.
Matt, Anthony and I met while studying Economics at Keble College. We lived and worked together in college all three years. Matt and I studied Economics & Management, and Anthony wished he did (he studied PPE). In our final year, while everyone was deciding what to do and applying for grad schemes, the three of us would procrastinate with discussions about entrepreneurship. We often talked about ‘Uber-fying’ a new industry, or how we could apply Airbnb’s marketplace approach to a fresh problem. We weren’t sure what exactly we wanted to do, but we all knew that we wanted to work for ourselves and leave our own humble marks on the world. Entrepreneurship seemed — and still seems to me — the best avenue to achieve this.
In the summer after finals, we decided that we would pick a good business idea and give it a shot. A couple of months passed. We talked and brainstormed, but nothing fruitful came of it. And then one day, by accident, Matt needed to store his things for a week in London while he moved between accommodation — and he asked Anthony if he could leave his stuff at his place. The response he got, “Yeah, but I’m charging you for it,” was a lightbulb moment. I remember them calling me up to say, “We’ve got it! We’ve got a business idea. Airbnb for self-storage!”
I think most businesses suffer from not being able to get a cheap prototype to market to test it. In our case, all we needed was a website, and our time. Matt and I began studying for Masters courses at UCL, and Anthony started at a digital marketing agency, so we worked around this. From September 2015 onwards we began serious market research into the storage industry. In January 2016, we pivoted to the concept of left luggage in shops and hotels. We launched the CityStasher prototype in April. Initially, we had just 3 shops and our own apartments. We used to personally handle each transaction to make sure it went smoothly!
By June, we’d signed up our first 10 locations, and we started to get daily orders. By then we realised we were onto something with serious potential. The number of times people said “It’s so simple, I can’t believe someone hasn’t thought of this before”, began to convince me we were onto a winning concept.
And so we decided to look for investment. We weren’t sure initially where to start. We considered accelerators — although personally I’ve never been convinced by the accelerator model. We decided to contact industry leaders in the storage business, to see if they could offer advice — or better yet — their money. Big Yellow Storage is the biggest player in the UK market, so we decided to go big and email their CEO. A quick Google search will take you to a rather handy resource called ceoemail.com, which I doubt many CEOs will thank me for mentioning, but for us it was a gem.
We accidentally sent the email without proofreading it. I remember reading it back, with each typo and grammatical error adding to my conviction that it would never get a reply.
Astonishingly it did. The reply was succinct and unreal. Paraphrased, it read “I like the idea. Come and meet me at my main London warehouse and we can discuss this further”.
Matt and I went along to the UCL entrepreneurship centre and chatted to one of their business advisors. He gave us some very helpful guidance for what we should include in our pitch deck. The night before the pitch, all 3 of us stayed up late in the UCL library, putting the finishing touches to our slides.
Matt and Jacob in front of UCL. This photo was taken in August 2016.
The next day we got up early to go to the warehouse in Fulham. We met Jim Gibson, the CEO, and he took us on a long tour of the facility. We later found out this was one of his favourite ice-breakers. We sat down over lunch in his office to discuss our idea. He had a number of comments and suggestions, but he let us explain each slide in full detail. It transpired that Jim was a Wadham alumnus, and I’ve often wondered if the Oxford connection played in our favour. It certainly gave us common ground to talk about. We left with a promise that he would think about it and be in touch soon.
True to his word, he got back to us the next week to say that he was interested in investing. He had three conditions. First, we needed to write a formal business plan. Second, we needed to go cashless, making all transactions paid-for online. This would allow us to control the business’s cashflow and avoid the hassle of monitoring and chasing cash debts from our hosts. Third, he wanted us to find another independent investor, who would be willing to finance the idea. Perhaps to confirm he wasn’t the only person crazy enough to believe in this business.
There’s not much left to tell. Almost as soon as we heard back from him, we got on the case. We spent all of August writing the business plan, shooting off emails to potential angels and getting ready to take the business cashless in September. Meanwhile, we began to line up more London locations and plan our expansion into other UK cities. My Master’s thesis was also due in September — I think I divided my time almost equally between my thesis and the business plan. It was a summer of hard work.
Jacob, Anthony and Matt, in Anthony’s lounge in summer 2016, after a late night working on the business plan.
In the end, it all paid off. In late September, at the Radisson Blu on Portmann Square, we had another meeting with Jim and the other investors we had approached. The plan was complete, the website was cashless, and the angels were ready to invest. We agreed on how much we would raise, the proposed equity split and the implied valuation.
A couple of months later, the legal documents were finalised and the money landed in our account. A simple idea had evolved into a business concept; a business concept had evolved into a minimum viable product; and a single cold email about this MVP had led to the closure of a £100k seed round. We were ready to pursue work on our startup full-time and take it to the next level.