Access to finance is one of the main barriers for development of startups and even more difficult for creative businesses. But you are not alone. We are bringing to you a new series of interviews with successful investment stories where startups from our global network share their funding strategies.
We talked with Keigo Fukugaki, Co-founder, Director of Design and Experiences for BnA (Bed and Art)
Keigo Fukugaki: Based out of Tokyo, Japan, BnA is a social enterprise that designs, builds, and operates Art hotels as a platform for financially supporting local artists. Working with local artists and creatives in each location, we create one-of-a-kind hotel rooms, where travellers literally “stay in an art piece”. Each time a guest stays in any of our rooms, a portion of the profit is shared with the creator of the room.
They say a picture is worth a million words, but being in one our rooms is worth a million times more, so come stay with us.
You have won CBC Japan 2016. How did this experience and Creative Business Cup in general help your startup?
BnA had initially begun as a hobby project in 2015 and winning the CBC gave us the extra push to convince the three founders to commit to the project full-time.
What is the status of your business at the moment ?
Since 2016 we have built 3 small to midsize hotels in Japan with over 60 employees and staff members, and partnered with several real estate developers in developing new businesses and projects.
The pandemic took a toll on the business sector overall. However, did you find it more difficult to get funding this year? Why?
The pandemic has had a huge impact on the hospitality industry, and we were not immune from it. We had been considering a series A round, but had to postpone it and focus on making shifts in our business to survive the pandemic. Currently, we are unable to make an accurate assessment on when global travel will lift, and that makes it extremely hard to present a business plan and convince investors.
What was your approach to attract investors ?
In our seed round in 2019, we approached angel investors, mostly successful entrepreneurs. They had gone through the startup struggle themselves and at the same time, really believed in the social mission that we are trying to solve.
What type of investment did you get?
Our seed round was raised from angels using the J-KISS term sheet, an adaptation of the 500 Startup’s Keep It Simple Security term sheet.
What was most challenging in raising capital and how did you overcome it?
Our biggest challenge was finding investors that could see/accept the delicate balance we would have to maintain between profitability and the social benefit that we are trying to provide for the creative community. Speed and Community building are most of the time, at odds with each other.
How important was it to have traction to raise capital?
We were already working with big name real estate developers and had several new hotels to be built already in the pipeline at the time of our fund raising. So, that definitely helped provide confidence and trust.
Do you have any tips/advice for startups looking for investment?
1 x 100 is 100, while 2x 100 is 200. Proving that you can turn a dollar into two dollars is the best way to get investors to believe that their money will be put to good use. So, find ways to work with partner companies or have some sales early on.