The company that turned down a six-figure investment for organic growth – and thrived without VCs

Faisal Laljee co-founded his childcare marketplace, KidSitter, after a dinner conversation with colleagues about the challenges of finding reliable babysitters.

The service launched in 2015 and registered six months later as KidSitter Islington, but what followed was a masterclass in navigating investment challenges and finding alternative growth strategies. 

KidSitter is a secure and curated online marketplace connecting parents with trusted and vetted babysitters. Less than one-in-10 applicants are accepted to KidSitter, and they have midwives, nurses, teachers and nannies on their books. 

The first round

Initially, the fundraising journey progressed well. Faisal successfully raised £280,000 in its first round through London Business School networks, London-based Harvard alumni, and angel investors in 2017.  

"It was all done through London Business School networks and personal connections," Faisal explained. "We used SEIS and EIS, which was very useful, and investing is really a people business - it's simply about relationships. Faisal said:

"There's actually no textbook way to do it because your business is so unique to you. Your personality is so unique to you. Your skills are so unique to you.

"It's always good to talk to people who've done it right, but the reality is you never know where you'll find money."  

The second time around

When they needed a second round, 12-15 months later, though, the reality of the effort fundraising takes kicked in. 

When Faisal started pitching to VCs, they had serious questions about scalability and low margins. Rather than accept insufficient funding of £250,000 when they needed £1 million, Faisal made a bold decision to turn down the money and pivoted to organic growth:

"What I didn't want was to raise another £250,000 and then be back raising again in a year because raising takes 12 months, the whole process end-to-end."

The decision to go for organic growth proved transformative. When COVID hit, and the consumer market tanked, they successfully pivoted to B2B, targeting hotels and hospitality businesses – creating "a significantly higher margin business". 

The winning pitch

Faisal is emphatic about having the right person to pitch to investors. He said:

"The person who's pitching doesn't have to be the founder, but the person who's trying to raise money has to be someone who can charm, who can exude confidence, leadership, and have that ability to sell.

"And if those are missing, then no matter how good the idea is, it flies under the radar.  

“You have to be extremely fortunate to be able to get someone who believes in you right away. But the general rule of thumb is that you have to have someone who can go out and sell the idea and articulate it in a way that you can convince people to give you money. Because everybody who's willing to invest money is being sold hundreds of ideas every day." 

Looking back

Today, KidSitter operates profitably with two arms: the original consumer platform and a B2B hospitality service. Having expanded into pet sitting and elderly assistance, and innovated insurance coverage for freelance childcare workers, Faisal has no regrets about choosing sustainable organic growth over traditional VC funding. He said:

"I'm excited enough to say I'm going to not pursue a high six-figure salary somewhere else and focus on this." 

VIDEO: How to find, meet and pitch to angel investors

Learn how to put together a target list of active angel investors, make a compelling pitch deck and create momentum so you can close your seed round:

Faisal's top tips for raising investment: 

• Start with commitment from those closest to you: "Any stranger who invests in you is going to ask you how much you have put in yourself. Has your mother, father, brother, sister or best friend invested? Because if they haven't invested, why would a stranger invest in you?" 

• Don't leave any stone unturned: "Don't leave anything unturned. Pursue everything. Pursue families, friends, connections, colleagues, and then angel investor networks. You don't have to go to London Business School to pitch there. Just Google them and find places where people are holding investor events." 

• Get the right person to pitch: "If you're not that person who has that ability to be outgoing, to pitch easily, to convince, then maybe find someone who's going to do that for you." 

• Understand it's about relationships: "Investing is more of a people business, it's about relationships really. I think they invest in founders and not really ideas so much." 

• Be realistic about expectations: "Be realistic. Private equity is not going to give you money because you're a start-up and they don't look at anything less than like £20-£30 million at least." 

People were also interested in:

• How to secure angel investment: Valuing your start-up for angel investors

• How to become investment-ready