She Helped Raise $1B by Fixing What Every Founder Gets Wrong About Investors | Ep 281 with Dannika Warburton Founder and Principal of Investability

0:04So Danica Warburton, super excited to have you today. and you have a very interesting story. It might be one of the most unique stories, at least from somebody who's in the investment side, but came from working in a mine. I don't know if I even know anyone that's actually worked in a mine before, but I can only imagine the skills that mining teaches somebody. So can you bring me back to that day when you used to work in a mine before you were investability, before you were the person you are today. Sure thing. Thanks, Daniel. It's so exciting to be here speaking with you. So, yes, I guess being an Australian and, you know, in an economy that's driven by natural resources, when I was at university, during my breaks to get a bit of money, I would go and work on the mine sites, which was absolutely fascinating, to be honest.

1:02You know, if you've never been underground in a large gold mine, which I'm assuming you haven't. It's just another world. It's like the, you know, going to the moon or something. But it was an interesting sort of exercise that I did over that sort of three or four years in the breaks whilst at uni. And I guess by virtue of being a West Australian, my family was in the mining industry, so I was lucky enough to be able to do that. But it really set the foundation of what Investability is. the company that I lead, because a lot of the companies that we support are listed on the Australian Stock Exchange.

1:44They're small caps. And by virtue of the composition of the ASX, that means that a lot of them are actually mining companies. So I didn't actually work on the mine sort of full time. After uni, I got into investment banking and sort of did the rounds there. They got their pound of flesh for me. I worked for a US bank, actually. And then after that, moved into sales and trading for a Canadian bank. So sort of got the full spectrum of deal structuring and how these really transformational sort of corporate deals get done with an Australian focus. So yeah, that set the foundation and I guess is a pretty unique mix for investability to sort of have that origin story.

2:30But I suppose a real aha moment for me before founding Investability was I consulted to a digital investor relations firm for just about three months. And while I was there, it was like upside down, man, this agency. The culture was super toxic. And in the three months that I was there, I kind of leveraged my relationships that I had and bought in about 800 grand's worth of new business. And I thought, I kind of had two realisations, I suppose. The first was that I could do this and do it better and these people, but also secondly, that I really wanted to build a business that had a great culture.

3:10So that's what I did. I was living in Sydney at the time, founded Investability right as the COVID pandemic kicked off. But that was actually the perfect time to have started an investor marketing agency because we just were entering a bull market. And so, you know, went from about one client to 45 clients in the space of about 12 months and did about 14 IPOs that year. So really built the plate as we flew it. It's a very commonality. It's a lot of commonality, I'd say, between what you're saying and other successful founders as well, where you had experience in an industry, you're able to take that experience into the industry that you found the company within.

3:55At the same time, you work for somebody and then you realize, why am I working for someone when I can literally do this on my own? And I love that. I think that's, you know, it's such a great start because you have experience, you're already working in it, which is why I always find it's super helpful for people to work a corporate job, like you said, gain what you don't want to do, like find leaders that you don't actually want to emulate. And then you bring that to your own company and say, I'm never going to do that. But it helped you really craft this thing. So you've helped raise over a billion Australian dollars.

4:32What is one thing that you find that founders misunderstand about raising money? I think from our perspective of when we're assisting companies going through a capital raise or a funding round, that they're really quite focused on the technical details or the numbers. And they may miss the fact that it's not necessarily the numbers that moves the market, it's the narrative. And so crafting a narrative that is an investable story and that is going to be compelling to an investor is really important and something that often gets missed, I find. And I imagine within this, you're pitched by many founders, or I'm sure a lot of people want to talk to you about investing.

5:18I know everyone I know that's looking for money is always talking to hundreds of investors. And I can imagine being on the investor side, it can get quite overwhelming. But what would you say is a successful pitch? So if somebody comes to you or if there's maybe one that stands out where you were like, wow, like that really got me compared to these other, you know, 50 that I've heard that I probably will pass on. I think it's about a simple story. So kind of what I was just saying before about things getting overcomplicated, the best stories that I've heard are ones where the company, the CEO or the chairman or whoever's presenting comes with three key points that they want you to walk away with.

6:03So, you know, and I guess that's because the human brain loves the power of three, you know, three wise men, three blind mice. It's kind of how we've grown up. It's the best number of investment highlights to use for the brain retention or, you know, memory retention for investors. But there are multiple factors that I think make a compelling story. So one would obviously be the context of the sector, the industry that the company is in. and then secondly really honing down the story to make it super punchy. Like what is it that investors should sit up and take notice about? So that's what we do at Investability to help these companies get noticed by investors both on the institutional side and the retail side.

6:51So it can be quite complex making the story weighty and technical enough to I guess facilitate the institutional institutional investors and what they're looking for. But then also simple enough to understand for just, you know, a mom and dad investor. Do you find when you give feedback to these founders, because I know you're helping them raise the money, right? And if you give them feedback, are they open to it? Or are they, you know, like, hey, I'm the founder, I know everything? I think with us, we find that they really treat us like a trusted advisor. So they take on the feedback. They know that we're aligned with them.

7:39We're trying to help them. And it's our specialty. So a lot of the MDs or the founders that we work with come from a technical background. So, for instance, if we're working with, say, a mining company that's developing a, I don't know, a big copper mine or something like that, their expertise is probably going to be in mining, engineering or geology, not necessarily in marketing and communications or the media side. So I think they do come to us and if we're giving feedback, we always do it in a really warm and supportive way, of course, but they know that we're trying to help. So I think they're always receptive to hearing positive feedback that's going to help them get their investment so they can go and make a difference by bringing their company to life.

8:34Yeah. It's always good to have you need that trusted partner, that trusted advisor. I remember a moment in my business where I had this post like a deal was handed to me and it was going to be like life changing, business changing. And I messed it up and I lost the deal. And it really was my own fault. And it was, you know, insecurities. It was early on. And I it was just so it felt so overwhelming to me. like, okay, I don't know if I can handle this or what if I mess up? And I look back like, wow, I learned a lot. Even though I missed out on a substantial amount of money, I really learned a lot.

9:10Did you ever have any of these aha moments for you where it didn't go as smooth as you wanted, but it was one of those hard lessons that you needed to learn? Well, I totally agree with you that the most painful things that happen are obviously the the best or usually the best teachers. I've had many challenges. Like I think most founders would things to overcome and to your point around limiting beliefs, I think one of the things if I was going to go back to sort of six years ago and tell my younger self, you know, dealing with stress and the limiting beliefs that you get wrapped up in that you can't do something or that, you know, something's going to fail.

9:51I wish I had learnt more about Neurosides back then, I mean I just Read this fantastic book about The alter ego effect By Todd Herman and that's Actually been game changing, probably a little bit Off topic but I think if you Can create a character Give it superpowers and then press play You know it's just It's amazing, embody this If you're a procrastinator for instance Embody, build a character around someone Who just gets stuff done, if you're A real stress head that can't, that sort of gets really overwhelmed and frazzled, build a character that is super cool, you know, relapsed, nothing phases them and just executes with, you know, with good humour.

10:35So I think that's sort of something interesting that helps me to overcome challenges or times when I'm feeling that it's all too hard and it's, you know, what am I doing? You know, sort of moments. One particular time where things were going really, really well, and I guess I didn't read the signs or, you know, you always have this intuitive sense. And I think if you're guided by your intuition, then everything's going to go okay. It's when you don't listen to your gut feelings that things go awry. So this is a time when basically there was, I think we had 10 employees sort of all resigned within a month and we had to drop clients and it was you know one of those times we kind of feel like giving up but you know everything has a silver lining and if you have that growth mindset that you can see the benefits of something bad that happens to you I think that's a really positive trait and something you need to have as a founder to be resilient.

11:39But it allowed us to restructure the business, really scale back the operations to make them lean. It was sort of the time when, well, it was a little bit before AI became sort of as commonplace as it is now. But just we built better systems, like the investability was so much better for it. So I think, yeah, I think when you go through a hard time, just always know that there will be something good coming from it. And what can I learn? And how can I do better next time. That's really all you can do, I think. You have to build that superhero. I like that. You have to build that superhero in that moment to tell yourself things are going to get better because they always do.

12:19But it's so hard when you're standing in the mud. It's really, really hard not to envision your feet falling deeper into it. If you could change something about the small cap world, and I don't really know a huge amount about it. So thank you, though, for filling me in more today. But if you could change something about it, maybe make something better, what would that be? I think when we're dealing with the small cap companies, so a small cap company is in a company under about a million market cap. So these companies are often run by small teams. And I think the thing that they may, you know, do wrong often, I'm not saying all the time, but a lot of the challenges that we see when we are engaged by a company to assist is that there's a bit of information asymmetry out there in the market.

13:06So maybe they're not communicating as effectively as they could with their shareholders or with their investors. Maybe there's some perception issues that need to be overcome by the people who are, you know, investors may think that a company's management team isn't supporting their shareholders in the way that they want to be supported. And all of this we've found, we've turned negative sentiment into great sentiment just by communicating with shareholders. So I think that's really important, reducing the information asymmetry by just communicating more. And some of the things that we do are like, you know, investor webinars where we'll get on and have sort of 100 or 200 people on these calls, investors on the calls, and give them the opportunity to ask two-way questions.

13:52It just builds, I guess, trust and credibility in the management teams that they're the right steward for the ship that's aligned with shareholders and going to be taking the company forward in the best interest for shareholders and investors. So I think that's probably the main thing in the small cap space is about sort of getting the doing sort of best practices promotion. And I'm not really sure. I guess a lot of these companies as well, because they've got lean teams, you know, things get missed and that sort of thing. So I always think when you're working as a founder, you've got to do the hard work.

14:36Everything should be results orientated, but you've also got to be like a good human that people want to work with. So it's about the small 1 % actions that will move you forward. I mean, personally, I don't believe in my work-life balance. I believe more in alignment. So building a team around you of people that are, you know, supporting the cause and that have your back and that will, you know, step up to the plate and be a good, a trusted advisor in our sense, in our role. And also as well, I don't think that when you're, I don't think that anyone wants to hear about the labour pains, right?

15:16But they just want to hear about the baby. So being results orientated, executing well, communicating with the shareholders and ambassadors and keeping people up to date and then doing it with good energy. I think that's sort of the formula that all small cap founders should roll with. I was just listening to Jeff Bezos talk about how he doesn't believe in balance, but he believes in harmony. And I like what you said, which I think is along the lines of the alignment. Going back to something you said early on was around when you worked in that corporate job, It was a very toxic environment. And I imagine normally that's driven through top down leadership.

16:00So what is something within leadership that you've learned along the way that you're like, OK, I'm either never going to do this or I'm always going to do this? Well, people want to work with good people. So we know it's often quoted that you've got to build sort of the A-team and then the A-team is going to attract more of their A-team fellows to join the business. and that's how you scale your human resources or your human capital component. And I think it's also true from the client perspective that, you know, people want to work with people that they like and trust and, you know, who are easy to deal with.

16:38So I think that's a pretty simple formula in terms of, you know, leadership and building a team. But also I probably wasn't the best leader to begin with it's not one of my strengths at all. So it's something that I've had to sort of learn and carve out time to really, you know, build the culture and a team spirit, I suppose. But always having had that past experience that I talked about where I worked at that top sick place and it definitely was driven from the top down. I mean, the MD was, you know, having an affair, everyone, the account managers. I think that sort of set the tone for all the other sort of things that happened there.

17:22But when you see something that you don't like, it is a real impetus for doing something differently. And so that's why it's been so important to me to build Investability's culture based on warmth and being a good person, doing a good job. And I think our sort of results speak for themselves in terms of the clients that, you know, work with us that we've retained for a long time. And we're at the premium end of the market as well. So it kind of shows that people just want to work with people who are the best or doing a good job and do it with good grace and good energy. I'm learning from you that being a good human really pays off.

18:05Not only just being a good human, being likable to other people, and also communication. it's pretty wild how so many relationships it could be friendships business partnerships client relationships are ruined because of a lack of either a lack of communication or just people don't really understand how to communicate and I think that's partially because we're not really taught like school doesn't really teach you how to communicate right it teaches you how to like add a add one plus one equals two but we're not learning the I don't know if it's a soft skill hard to i forget eq i know i think it's an eq thing i'm blanking but it's like we're not learn those skills i think it's a soft skill we're not learn like the soft skills to actually will benefit us especially when it's like the business world but maybe maybe we need an mba we need to we need to learn the neuroscience we need to read these books and we need to build our superhuman we need to build that into ourselves and we're going to be better.

19:05But Danica Orberton, founder of Investability, if people want to get in touch with you, they want to find out more information, maybe they're a small cap or they want to become small cap, how can they do so? Oh, we'd love to hear from them. So you can reach out by our website, which is probably going to be linked to investability.com.au or via LinkedIn. We've got Investability IR on LinkedIn, and we've also got a YouTube channel, so they can check out our videos on Investability TV. And what is Investability TV? Tell me about that. Well, it's our platform where we host all of the various investor events, some highlights from investor events, panels that we've spoke on, investment panels, the interviews that we do with our ASX listed clients, and webinar replays and the like.

19:56So lots of information there, very much investor focused. And to give you more of a sense, Dan, on the ASX small cancer space for sure. I'm going to learn. I'm going to be like it. Next time you come on this show, I'm going to be like a pro about learning about the, I didn't even know, I don't know too, I don't know too much of the markets, especially outside the US. I am a little ignorant in markets. So I'm glad I'm learning. I actually have a final question though. how do you see the importance of basically what you're doing is media creation right and i don't know if you're familiar with a16z the vc firm they just launched this whole thing where they're trying to incubate what they're calling new media which is essentially right like they've done a great job of media creation among among investment firms or corporations so how do you see this playing on the future where like, for example, the clients of yours, they need to create some sort of media, like creating this media presence online might be either, is it going to be mandatory for every company?

21:03You know, is only, you know, are a few companies going to win? Do they need to be a certain size? Like, how do you see this playing out in the future as like content creation, storytelling just becomes more of a thing? Well, it's a great question, actually, because I was just speaking to someone about we've got a couple of clients going over to London for a conference. And so we've put together a presentation, investor deck pretty much. But really, I think that video is the new investor presentation. People are so, investors included, so attention deficit these days. If you can tell your story in a two-minute video rather than having someone have to read through a 25-page slide deck, then they're going to choose like a quick two-minute video.

21:49I think it's incredibly powerful and the way that everything is moving. I will say that it's a very, very crowded space. It's really hard to stand out. And obviously, as you know, like making compelling content takes a lot of time and energy to make it high quality, but it's so powerful when you get it right. And I think the companies that do commit to investing in new media will outperform 100%. Danica, amazing. Thank you so much for joining us today on Founder Story. I learned a lot and I always enjoy having people from all around the world because I think sometimes we get stuck in a bubble in the small place we are and then we're not really sure about what else is happening in the world.

22:33But there's so, it seems like there's so much opportunity now in front of us that we all can really win. So thank you for all that you do to help other founders as well. Thank you so much for having me. It was so great to chat to you.