"Founders Who Fundraise" is a blog series highlighting founders in the Bowery Capital portfolio and their origin stories. Have you ever wondered how founders come up with their ideas, how they approach testing and validating, as well as their approach to fundraising? This series will share stories from the founder’s POV and provide insight on the inner workings of starting a VC backed business.
Elaine Kelly is the Co-founder and Chief Operating Officer of Klir, a water management platform for utilities. She brings a wealth of early stage experience and in this interview goes deep on market validation, fundraising, and finding the right co-founder. She also speaks to this being both a personal and founder learning journey.
How did you come up with the idea for Klir?
My co-founder Dave and I met at Accenture as IT consultants. During that time, we worked together on a project for the Environmental Protection Agency (EPA) in Ireland for two years. It was whilst working on this project that we realized there was a need for more advanced technology in water. The real catalyst for setting up Klir was when the Irish government established one national water utility in 2014. We were part of the IT team that looked at the consolidation of environmental data and how the water utility would tackle that problem. That's when we had our eureka moment and realized there wasn't a platform on the market that looked at compliance and regulation horizontally or cross-functionally. There is tons of software that does parts of the puzzle, but no one was doing the whole puzzle. So, it wasn't an overnight idea, but rather an idea that was built on over a number of years of working in this sector and constantly talking about what a product like Klir would look like for the water sector; and along the way different things were happening that continued to reinforce the necessity for Klir in the water sector.
Can you share how you approached the idea of Klir with a co-founder?
Dave approached me and asked me to join him in this venture and I knew right away that I was in. The idea of having a co-founder appealed to me a lot as I am more of a team sport girl than an individual sport girl. As an extrovert, I thrive on collaborating with others, bouncing ideas off of them, and working to bring ideas to life.
Having a co-founder has proven to be incredibly powerful. It's something that you don't necessarily realize at the beginning of a partnership, but over the course of eight years, Dave and I have repeatedly acknowledged that our partnership has been a significant contributing factor to our success.
Our partnership has been empowering, and we have been able to achieve a level of success that we may not have reached individually. Working together, we have been able to overcome challenges and take advantage of opportunities that we might have missed out on if we were working alone. I feel incredibly fortunate to have a co-founder like Dave.
How did you go about assessing synergies between you and your co-founder and what advice would you give to aspiring entrepreneurs when looking for support in starting their own companies?
It is crucial to have honesty with your co-founder, and this is probably quite obvious. When you go through so much together, there is no time for pretense or avoiding issues. I was fortunate to have previously worked with Dave, so I knew he was extremely intelligent and had seen him handle various situations and my initial impressions of him were all positive.
One of the things we are really lucky with is that we are opposites in terms of our skill sets. Dave is a visionary, a strategic thinker, while I focus on practical execution and bringing ideas to life. Our complementary skill sets made it easy for us to work together. However, it did take some time to find our rhythm. In the early years, we almost co-managed the business, always being together and running ideas by each other before making decisions. But as the business grew, we realized we didn't have the time for that anymore. We needed to separate our roles and responsibilities, so we could make independent decisions to move things along faster.
At the end of the day, although we are co-founders within the business there is a hierarchy in our roles, as COO I report to Dave as CEO - so if we ever disagree on something, Dave has the final say, and I respect that. Fortunately, it is rare for us not to reach a shared decision. We have a rule that we can disagree in private, but once we step out of the room, we commit to the decision and represent it together. When looking for a co-founder, you don't know these things in advance. It requires a bit of luck and adapting to each other as you grow together. Like any good relationship, you forgive and challenge each other, deciding what is worth fighting for.
As for whether you can "window shop" for a founder, I can't say for sure. Just like some people get married after meeting on Tinder, there are also many Tinder dates that end in disaster. We were fortunate that many of the important aspects we would look for in a co-founder relationship worked out, even though we didn't know it when we started.
What was your process for testing market validation before raising money?
Naivety is a great source of doing. We undertook this idea of building Klir, and one of the things we immediately realized was that we needed to move to the North American market. So, we moved into our market to be close to our customers — that was extremely beneficial because we could jump in a car/on a plane and meet prospective customers face-to-face to bounce ideas off them.
We were obsessed from the start with understanding our customers and their pain points. We had worked in a water utility before, so we knew what was wrong, but we wanted to validate that people would pay to fix what was wrong. Was the pain sufficient enough for people to endure the pain to change.
We were clever from the onset about getting into water utilities that were innovative or finding people in the sector that were innovative. We knew our solution would not be for everyone, and that we were a startup in a very traditional industry that is infamous for its ability to be stoic, so we went after pilot programs and innovative utilities. One of the things we did was partner with WaterStart, a not-for-profit based out of Nevada that matches water utilities with technology partners. Through them we met with the Southern Nevada Water Authority in Las Vegas, recognized as one of the most innovative utilities in the world, and we secured a contract with them very early in our journey. We got a few customers off the back of that, and so that was enough evidence for early investors to say that we had something and we could put a product to market.
Reflecting on it, I think it took a lot of courage because we moved countries away from families when we didn't have a product and we were essentially selling off an iPad, saying, "this is what our product will look like," - we then went on to launch the product in a couple of months, and went from idea to product market fit in a very short period of time.
How did you become involved with WaterStart?
In the journey of startups, you have to meet the right people. If you are convincing, you are losing. So, in 2017, we flew to a conference in Nevada (we lived in Ireland at the time) and we went with our iPad and our vision of what Klir could be. We talked to as many people as we could there, and we met Kevin who would become one of our "first followers" of Klir. He was a Director of water quality at the Southern Nevada Water Authority, and when he saw our vision, he said, "I get this." So, he became a real champion for Klir and helped make introductions to WaterStart. It was a bit of luck meeting Kevin and him having knowledge of the Waterstart model and making us aware of that.
What was your approach to fundraising?
We've done Seed and Series A, so we took a lot of lessons from our Seed round into our Series A round, and look forward to taking these lessons into Series B in the not-so-distant future.
Our approach: Divide and conquer the co-founder team.
Dave led most of the fundraising efforts. This is the time that having a co-founder is so important because fundraising takes so much energy, effort, discipline, courage, and thought leadership to present your topic in a way that makes sense and resonates with investors. We had established Klir in such a way that Dave could step out of the business, and I became acting CEO for the months he was fundraising.
We know that you must run fundraising as a process. It is like a sales cycle — you should be in discovery, proposal, demo, and close all at the same time. If you have different people at different stages of that cycle, you are out of sync because you might be at the term sheet stage with one investor, but at introductions with another. So running it as a process and managing information sharing in a controlled war with all parties involved is very beneficial.
What have you learned that you wish you knew during the fundraising process?
Rejection is part of the game. Recognizing that you have to kiss a lot of frogs to find your prince, and there will be a lot of rejection along the way, but also picking your suitors is very important. Every time you fundraise, you are learning, so you want to make sure you are getting relevant feedback along the way. It’s important that you don’t over calibrate or react to everything you hear along the way. If you react to everything an investor says during that process, you will be running around like a headless chicken, and it will be a very demoralizing process. The more clarity you have on what your business is/is not and the direction it is going in the more firm you can be in all aspects of it. There is the flip side of that when you find your prince, there is value in listening to what they are saying and making sure you are getting into a partnership with someone that is going to bring a partnership mindset to your business and can contribute to growth.
What is it like balancing the fundraising process but also the day-to-day operations/responsibilities of your role?
Being an entrepreneur is like being a firefighter. You will go home, and there is always a fire raging, so you need to adopt this mindset to survive. So for me, when there is a lot going on, it is about prioritization so asking myself what is most urgent and detrimental if I don't do it and also what will add the most value or have the most impact.
It is a survival mode in the early days, but it is also exhilarating when you have the potential of getting your first round fundraising, but that is not sustainable. Of course as the business grows and there is a Senior Management Team fundraising should become less disruptive as the business should run without issue when the CEO steps out for a period of time.
Reflecting on your journey so far, what is something that has changed in your life since starting Klir?
Personally, I have two children now. I had my first son in 2018 the year we started Klir. When we won our first Klir contract with the Southern Nevada Authority Authority, I was pregnant, and we moved to North America when my son was four months old. I had my second son in March 2021, which was another big change and requires some on-going prioritization! It is a huge mind shift in terms of priorities, and I've been fortunate in that I have been able to manage it and have a very supportive, hands-on husband. Happy chaos is how I describe it.
Professionally, the sheer volume of new information I have been exposed to. When I worked at Accenture, I learned an enormous amount in my 8 years, and I was exposed to a lot of interesting projects, but I felt like I operated in one room of my brain. Being an entrepreneur, I have found other rooms, doors, stairways, and elevators; I have learned a huge amount about a number of things I would never have been exposed to if I had continued with my career trajectory. I know that I will be a lifelong learner and am always excited to expose myself to new challenges.
Conclusion
Elaine’s insights on managing a tight fundraising process similar to that of a sales funnel as well as learning from each fundraising round and not reacting/responding to all investor feedback is hugely valuable to entrepreneurs undertaking a fundraising process. Her experience as a startup founder serves as an inspiration for aspiring entrepreneurs, especially those who want to pursue the founder journey but know they are best empowered to do this alongside a co-founder.
