I raised $1M to grow our chai company. Here’s a guide on how to raise your first round.

8 min readMay 24, 2022

It’s March 2nd, 2020 and our cafe has been open for the past 6 months. Though there’s no talk of the coronavirus hitting the States just yet, my brother and I have a much larger problem on our hands.

We’re running out of money.

When we opened our cafe in September we didn’t account for the effects of seasonality on people’s behaviors. As the cold and snow set in, we were still getting our bearings as first time restauranteurs in NYC. Our initial buzz had worn off, foot traffic was dwindling and our expenses were soaring. At the beginning of March, we were down to our last few dollars and had no idea what was around the corner.

What happened next would begin the most grueling two years of my life. Though we managed to successfully navigate two years of the pandemic, launch an eCommerce business and grow the brand through Tier-1 partnerships, it came at an incredible cost. We didn’t take a salary the entire time, choosing to reinvest every dollar back into the business to continue our growth trajectory.The mental and physical toll it took on my brother and I was irreversible. I tried therapy, meditation and a two week solo vacation only to still feel burned out. Though we were surviving, it was an unhealthy reality.

One thing we did took away from our time in the trenches was a laser sharp understanding of how to operate the business. With our backs against the wall, we learned how to stretch every dollar, get the best out of our team and create big moments for the brand. As the dust settled from the pandemic, we realized that our experience was our biggest asset and we had to leverage it. However, the uncomfortable reality was we couldn’t reach the next level of growth without taking on outside capital.

1. KNOW YOUR MONEY

I’ve always believed putting your own money on the line because that’s the only situation under which you have total ownership and control. But I had to acknowledge that this approach had its limitations. We had already bootstrapped our retail location, eCommerce operation and were paying out salaries, all while being cash flow positive. But there was the money needed to grow the business? There was none. If we wanted to build a global brand that would synonymous with chai, we had to take a different approach. Before I could raise a single dollar, I had to accept the following truths:

Capital brings connections and allows you to accelerate, thereby saving time. Since time is every founder’s most valuable resource, if taking in strategic capital meant I could fast track certain things, then this was inherently valuable to me.
You must give something to get something. This sound simple but a lot of founders, artists and creators struggle with this concept. Simply put, if I wanted Kolkata Chai to be a global brand, I had to give up some equity and autonomy to bring in the capital that would be used to get there. This was simply the law of the universe and regardless of how radically independent I was, I couldn’t circumvent this.
You have to genuinely want to bring other people along with you. Raising capital isn’t for everyone, but if you are open to making other people money and having them benefit from your efforts, it makes it much easier to stomach.
Not all capital is the same. We made a choice not to raise from any institutional funds (VCs, PEs, etc) because we were too early in our business for that type of relationship. By focusing our raise on high net worth individuals, small funds and syndicates, we were able to find the money that matched our needs. This made it more challenging at times, but also didn’t handcuff us to some of the realities that exist when you take in institutional funding.

2. KNOW YOUR PEOPLE

After having accepted that outside capital was the most strategic decision for our business, I had to figure out where to start. I know I didn’t have the background that would be helpful here — an MBA from a prestigious school, venture capital experience or wealthy parents, but avoiding that “victim” mentality was step one. My background didn’t matter, what mattered was I did have access to, regardless of how big or small. When preparing to raise money, here are the things that helped guide me:

Train your mind to understand that you’re pitching people to help them make money. You’re not begging anyone or anything. It took me a while to accept this, but the reality was I giving people a chance of their lifetime, not the other way around. The people who understood this were the people I wanted in my round.
Identify who you know and who they know. There is a lot of money out here and your task is to find out where in your network it lies. It might not be in the places or people you expect, but you have to hunt it down. Do not be afraid to aggressively ask for introductions and comb through your inner circle to find the levers in your network.
Be thoughtful with your outreach strategy. Do not pitch the heavy hitters early in your raise if you don’t have your pitch 100% dialed in. Set up meetings, build momentum and use the commitments you do get to create hype as your round progresses. For example, I pitched the co-founder of one of the most historic early DTC companies of this generation when I was still getting my bearings and wasn’t able to close. Weeks later, I pitched Nas’ investment manager and could confidently to articulate why this opportunity was important for them. Dial in before you dive in.

3. KNOW YOUR STORY

I kicked off outreach for our raise in August of 2021. At this time, we had spent the last 18 months operating in a pandemic and our revenues were inconsistent at best. It didn’t matter that were still in business (and profitable) during a time when many F&B operations folded, our investors wanted to see past revenue to give them an indication of what could be expected in the future. Understandable for them but inconvenient for us.

What I did have going for us was an incredible brand story. A story of a product that was already at scale, a cult-like community that was chronically underrepresented and indicated a massive market opportunity. If I could drive these points home, I knew that the revenues would be a secondary focus. Here are the key levers to pull when crafting a brand story:

Invest in your community from Day 1. A strong community is central to a strong story, and the best way to do this is to actually care about your customers way before you even think about raising money. The ways we invested in our community was — creating spaces that made them feel comfortable and acknowledged, involving them in our brand voice, developing content that speaks to them, showcasing them across our social and marketing, hosting events and more.
Find access points for investors to understand your potential. For us, it was about articulating the ascension of different Asian-inspired F&B brands (FlyByJing, Immi Eats, Omsom, etc) and the opportunity that existed in the market. These brands were proof of concept, so why was there no one telling South Asian stories in a relevant way?
Articulate how their investment helps you scale. Showing investors how the capital you’re raising will help scale your growth is easier in theory. In practice, it comes with a lot of questions, skepticism and counter examples. Be ambitious about your growth plans but also be open about what you don’t know.
Show them why no one can do it like you. Your unique perspective as a founder is your competitive advantage. Figure out how to tell that story in a way that is honest to you.

4. KNOW YOUR TACTICS

The reality of raising money is that it comes down to knowing tactical things that you can’t read in a book or find on Youtube. We were fortunate to have an incredible mentor (thank you Kevin Lee!) who demystified the process and gave us the playbook on how to attack things, but without that I know it would’ve taken me 2–3x as long as it did to complete the raise.

That brings me to the question of how much time raising a round should take. Naturally, that depends on your situation, the market and many intangibles but know this: The longer you spend fundraising, the more time you spend away from working on your business. This is why I would recommend treating a raise like a “full time” task (20+ hours/week) to minimize the time it forces you to be away from your business. From personal experience, it’s simply too grueling to flip the switch between raising and operating to be truly effective at either. Here are a few tactical learnings around how to close your round:

Carve out a period of time to give it adequate attention and pack your schedule out until you generate the momentum needed to close.
The longer your raise drags out, the more mental bandwidth it eats up. Protect your energy.
Give attention on the high priority people. I spent a lot of time on people who I really wanted to be involved in our round. Once I shifted my attention from them to the people who actually had the ability to cut a check, things sped up dramatically. Don’t go chasing waterfalls.
Process rejection in your own way. As a founder who takes a lot of chances on a regular basis, I usually don’t have an issue being rejected. But I definitely felt the sting of a few of them during our raise. Everyone has different ways to cope with rejection, so fine tune yours throughout the process. For me it was a combination of knowing that anyone who passed just missed an opportunity to make money and knowing that F&B is not everyone’s cup of tea. Game, set, match.

5. KNOW YOUR WHY

Raising capital is a grueling, demoralizing, rollercoaster process that can get the best of anyone. Before you start, make sure you know why you do what you do. With that said, I leave you with mine:

To my mother for sharing her love of Kolkata with us, thank you. To my Baba for setting the bar so high, thank you. To my family in Kolkata, look at what your love for Ayan and I turned into. To my Dadu who we lost earlier this year, I miss you and this is dedicated to you. This one is for the culture, for our future and for my family. Love.