Melbourne startup Mentorloop has closed a $300,000 funding round valuing the cloud-based platform at $2 million.
Mentorloop’s platform aims to make mentoring relationships easier to start, run and participate in for businesses, universities and individuals, with its clients now including Startup Victoria, the Western Australian government and Monash University.
The funding comes from a range of private investors including StartupAUS director Glenn Smith and Melbourne Angels, and will be used to further the startup’s product development and hire an in-house developer.
Mentorloop co-founder Lucy Lloyd says she and fellow co-founder Heidi Holmes laid the groundwork for the funding round very early on.
“We did the rounds last year and talked to pretty much every investment body in Melbourne,” Lloyd tells StartupSmart.
“None of those VCs necessarily jumped on board but we had one person in each room that kept in touch.
“We made some progress since then, with our first paying customers, and they’ve all re-signed. There’s no churn of our customer base and we’ve proved the market-fit of the product.”
Lloyd says they decided to opt for a group of private investors that identified with the startup’s overarching goal instead of going down the VC route.
“Our call to action has always been about making mentoring mainstream,” she says.
“People who have had success in life understand the value of mentoring and they believe it should be better offered.
“We’ve now get a great group of likeminded investors who really believe in the dream, not just the business case.”
For other founders she says it’s important to build relationships with investors early on, before a funding round is open.
“It takes several conversations to get that mutual trust that will result in an investment,” Lloyd says.
“You need to have conversations 12 months before you need the money. We’ve also learnt to focus and hear a ‘no’. If someone is saying maybe or that they’re not sure, that’s a no. Get some feedback then move on.”
Mentorloop’s cloud-based platform allows mentoring administrators to invite, match and manage their program participants, with an algorithm taking into account a user’s industry, skillsets and goals.
Mentoring is crucial to success in every business sector, Lloyd says.
“The idea of mentoring is a huge factor in the startup world and in the success of entrepreneurs in the tech space – but why aren’t these mentors available to everybody?” she says.
Despite acknowledging the importance of mentoring, most programs are still run with spreadsheets and email, she says.
“We wanted to solve that problem first,” Lloyd says.
“Our first clients were the program coordinators with spreadsheets. Now we’ve switched our focus to improving mentoring outcomes.”
The Mentorloop platform now includes a communication channel which mentors and mentees can use for event management, file sharing and task management.
Lloyd and Holmes met at school when they were 14 years old, and have been friends for the 20 years since.
After Holmes sold her company AdAge to Gen George’s OneShift, her and Lloyd, who was working as a digital director at an ad agency at the time, decided to devote all their time to the mentoring idea.
“We came together over this idea,” Lloyd says.
“It has been a bit of a slow burn but now with the investment we’re ramping up.”
Running a business with your best friend is “amazing”, she says.
“We’ve got that base of trust so a lot of the bullshit and potential misunderstanding is swept away,” Lloyd says.
“We often disagree but if there’s a misunderstanding we’ll have a beer and talk it through. If you’re a bit down then the others lift you up.
“Going full-time on Mentorloop is the best thing that’s ever happened to me. I skip into work every day and get excited.”
Denham Sadler is a former editor of StartupSmart. He was previously a journalist at the publication and has worked as a freelancer for the Guardian, the Saturday Paper and the ABC. In his spare time he likes puns and jaffles.
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