Daisy – Business Plan Validation and Fundraising

For Yotam, creating a pitch deck is a great exercise to understand what he doesn’t yet know, such as the knowledge gaps and missing due diligence of an industry and project into which he’s looking. The Daisy deck was less for investors and more for himself, as he built it in parallel to conducting his thorough analysis of the property management industry. Yotam had a working deck with him throughout his year-long market research. He used it as a way to constantly redefine his business model assumptions and test out his understanding of the ins and outs of managing a residential building. 

Daisy would be Cohen’s second venture, and he chose to structure his business deck a little differently this time around. The advice often given when building a deck for investors is to state the problem and the business solution within the first few slides.22 Yotam did no such thing for his Daisy deck. Instead, he delved into the pains and problems of the property management market for the first seven slides, going so far as to provide quotes from many of his interviews during his market research. “I think that if the investor buys into the problem, then it’s much easier to talk about the solution,” said Yotam. 

It is important to note that by the founding of Daisy, Yotam already had one successful business under his belt, having previously raised more than $30 million dollars over various rounds for the company he co-founded with Zohar Dayan (Zell 9 – 2010) called Wibbitz, which was founded in the Zell Program (Zell 9).

As a second-time founder, the path is starkly different than that of a first-time entrepreneur: Yotam had already proven that he could execute an idea, something investors seek and can’t be certain of from first-time entrepreneurs. “An investor met me during the process of raising this round [Daisy’s Seed round] and asked me if we had an app already working that I could show him. I asked him, ‘Why do you need me to show you the app? That's the easy part,’” said Yotam. “It's not about knowing how to build, it's about building the right product, it's about finding a really interesting market, finding the opportunity. They agreed, but again, this is a privilege I can tap into the second time around.” Moreover, when the venture is tech-enabled, rather than based on deep technology, there is less of a need to show a working product.

This wasn’t Yotam’s first startup, and he approached Daisy’s first fundraising process quite differently than he did the raise for his first venture, Wibbitz. This time around he approached investors wanting more than just funding – he sought a partner that would be with him for the long run and help him think strategically. Yotam began conversations pretty early on in his research, choosing five investors that he felt could be a fit, and meeting them frequently to keep them updated on his learnings and ideas. For him, this part of the process was fundamentally about building together, and he remained open to their feedback and direction. The first investment for Daisy actually came around faster than he had expected because two of the five investors he had been in touch with started pushing towards funding. He had considered both of them to be great finalists to lead the round, but ultimately, he chose Michael Eisenberg from Aleph with participation from a few value-add investors, including Shai Wininger, who co-founded Lemonade and Fiverr. Yotam and Nir closed the round of $4.5 million dollars in January 2020.23 

A Seed round is just as much of an opportunity to prove a concept as it is a commitment. This is something Yotam learned from his experience in Wibbitz. The first time he started a company and began fundraising, he hadn’t understood the level of commitment he would be undertaking. At the time, he was just trying to get from one milestone to the next. With Daisy, he knew that if he took the leap, it would mean a commitment of anywhere between five and 10 years of his life.

For Yotam, passion is the key. “Building a company is like a 5,000-piece jigsaw puzzle that you'll never finish, but as you start to build it out and see enough images in the puzzle to be able to understand what it’s about, then it's the right time to say okay, I'm going after it,” said Yotam. “There are a lot of things you don't know. But, I think it really all comes down to the two questions of whether this is an interesting market, and whether you are passionate about it or not.”

“When choosing an investor, the trust between the entrepreneur and investor is a priority,” advises Yotam. For him, an investor needs to trust the process and be aware that the entrepreneur does not have all of the answers upfront, as it’s a learning process for him or her as well. “A potential investor from NYC wanted to join the round and called my investor, asking a lot of questions. Our investor told him, ‘I don't know what they will do about it, but I trust them. They understand what they’re doing and they’re learning fast, so they will figure it out,’” said Yotam.

It’s an absolute certainty that problems will arise, and an investor has to have enough confidence and trust in the entrepreneur’s ability to find the solution. Yotam’s passion for the industry and the business he’s building, coupled with investors who believe in his ability to solve and grow from whatever comes at him, gave Yotam the confidence and conviction to start building again, this time with Daisy.