This year, Firebird client RezKit – the creators of a highly-flexible, affordable reservation system for tour operators – achieved significant financial backing from Jenson Investment for its next steps in the sector. Today we talk to the start-up’s Non-Executive Director, Chris Thompson, about the process of pursuing a successful fundraise, and what’s coming up in the pipeline through his work as a Firebird Director.
To read the first part of this series click here, where you’ll find a Q&A with RezKit’s CEO Matt Illston on founding, fundraising and future plans.
When did you first hear about RezKit?
Someone I know from my days running tour operator Ski Famille got in touch: he had worked closely with RezKit’s CEO Matt Illston, and said Matt was up for a conversation. He had seen the work I do with Firebird to help business owners and MDs raise investment and accelerate growth.
I knew of Matt’s existing company, Mr Zen – which helps tour operators with eCommerce, online bookings and websites – and was interested to sit down with him and his business partner Mark Jackson.
What drew you to start working with the company?
At that first meeting, Matt and Mark explained the system they were building for RezKit, mapping it out on a whiteboard. I remember thinking, “I don’t quite get why this is so strong. It seems really simple.” Then I realised the reason RezKit was great is because it is simple.
“RezKit doesn’t limit its own scope, or limit what tour operators can do”
What RezKit is designed to do is not answer every problem a tour operator has, but interface with all of the best-in-class software that can answer those problems. When I twigged that, I saw how powerful RezKit could be. The platform doesn’t limit its own scope, or limit what tour operators can do.
What was also really clear at that meeting was that, because both Matt and Mark were from tour operating backgrounds, rather than pure tech, they were very much embedded in the travel industry. Their driver was not “What shiny tech can we build?” but “What are the business problems that tour operators find challenging, and how can we solve them?”
How did you progress from that meeting towards the fundraise?
At first Matt, Mark and I went through a kind of getting-to-know-you period. After confirming that RezKit needed to raise money, we made time to understand each other, and work out how to pull together to best present the business.
The process involved figuring out the finer points of RezKit, learning what our individual strengths and weaknesses were, and beginning the (sometimes thankless!) task of approaching potential investors. There was a lot of communication between me and Matt around what resonated with people, and what didn’t. It took the best part of a year to figure out how to work together for the best advantage of the business, and to achieve the maximum appeal for investors.
When did you become RezKit’s Non-Executive Director (NED)?
Matt and I essentially agreed that I wouldn’t be paid anything unless we secured investment. My longer-term involvement as a NED was totally contingent on that. Up to that point I advised and worked with Matt without any fees, and sometimes brought in the additional knowledge of Ian [Finlay] and Stewart [Lambert], Firebird’s founding partners.
The deal we agreed with Matt was: if we secure the money and you’re happy we can work together, I’ll come in as a NED to support the business as it develops. In any case, before the funds were secured, RezKit didn’t really have the budget for expert external support. Quite rightly any available cash was focused on paying the developers building the core system.
Could you talk us through RezKit’s fundraise from your perspective?
The fundraise involved building a long, but focused, list of people to contact. We got that partly by picking Stewart’s brains alongside a great deal of desk-based research... But start-up funding is tricky. It’s very different getting funding for a business that hasn’t got an established track record, compared to achieving funding for a company which shows years of history, growth and profitability.
“RezKit was more than an idea”
I did already have some experience of start-up firms, and at that point was a Director of two other very young tech-focused businesses. I felt that the best opportunity for us might be to secure Seed Enterprise Investment Scheme (SEIS) investment. SEIS is a really interesting mechanism that was perfect for RezKit. Launched by the government in 2012, it:
“Offers tax reliefs to individual investors who buy new shares in your company
“Helps your company to raise money when it’s starting to trade”[1]
Start-ups are high risk. A lot fall flat on their face. SEIS was created to offer big tax incentives to investors for taking on some of that risk. In simple terms, there’s low tax to pay on the start-up investments that work, and a very significant tax write-off if you invest in something that ultimately fails. This means investors can take a bit of a gamble on a start-up. If it works, great. If it doesn’t work, they haven’t lost much.
In terms of funding for RezKit, the company had no proven traction, which made SEIS our main option. Although there was a track record of Matt and Mark as individuals, and they had a long history of relevant clients with Mr Zen, RezKit was a new entity and idea. As a business it was, effectively, a blank canvas.
Except RezKit was also more than an idea: a lot of the tech had been built by the Mr Zen team during the slow COVID period. But at that stage it had no clients, it had no money flowing through it, and a lot of investors won’t touch you until there’s traction.
“RezKit’s close links with Mr Zen and Firebird made it clear to investors that we had great access to the travel market”
I already knew of Jenson Funding Partners and thought they were definitely worth contacting, given the knowledge I had of their approach and portfolio. Ultimately our efforts paid off.
Why do you think RezKit’s fundraising efforts were so successful?
I think it was really helpful for Jenson to see RezKit’s close links with both Mr Zen and the Firebird Partnership. They could understand we had existing access to the travel market and to tour operators especially. They knew we weren’t coming to this cold: we had a high-profile, connections, and a clear way in.
Matt and Mark also did very well to get some small tour organisers interested early on. Getting the first commitment from a client to say, “Yes, I’d be happy to give you money,” was great. Client number one had already committed when we started talking to Jenson.
“I like to work with business owners who are open-minded; open to new ideas”
Another hugely helpful thing is the opportunity RezKit offers. At Firebird, we go into tour operators all the time, and often spot tech systems that aren’t ideal. Post-Covid, a lot of owners have got rid of staff, slimmed down their operations, and are thinking about how they can work more efficiently. To do that many need to look at the core tech driving their business. That sector-wide shift is highly relevant when looking at RezKit’s potential.
What kind of things do you look for in a business when you consider taking on a new NED role?
I like to work with business owners who are by nature curious and open to new ideas. It’s great when you meet and talk to owners who are really aware of their own limitations and are honest about the gaps in their skills and knowledge. These people are the ones most likely to implement the plans you create together.
Personally, I want to be able to look back and see that ideas have been taken on, and have had a positive impact on the business and the team. If I meet key members of a team and find a lot of resistance to innovation and new ways of working, I know that, whatever I say, change is unlikely to happen. That’s not an exciting prospect as a consultant or NED, whatever the commercials.
In some ways I’m product agnostic – it’s not so much about what a business is selling, but who is selling it and how – though I do need to be able to relate to the product and feel excited about working on it. If you’re joining a team over a period of months or more, they also need to be people you enjoy spending time with. I think most people want to be part of an environment that’s stimulating and interesting. I’ve learnt a huge amount from my best clients, as well as helping their businesses grow.
One of the appeals of RezKit for me, and probably for the Jenson investors as well, was that there were already individuals within the Mr Zen team – not just Matt and Mark, but the developers – who are just really bright, talented people. They’re strong, with highly developed skills that could be moved across to RezKit. We knew we wouldn’t need to find the initial talent: it was already there.
What advice would you give to other start-up owners thinking about a fundraise?
Really, really try and get to a point where you’ve got your core technology built and somebody paying money for it. Without some traction you will have a really hard job convincing anyone to part with their money – and if they do you may have to surrender far more equity than you’d like to. In terms of giving an investor confidence, funders don’t really want to pay for your minimum viable proposition (MVP). They want that to exist before they put their money in.
What’s up next for you in your NED role at RezKit?
For Matt and I it’s a constant refinement of the business plan, because it is a plan, and reality will always differ slightly. That said, we’re still incredibly close to the initial plan at the moment. One thing I’ve been doing since the fundraise is helping keep an eye on the cash flow. While the investment was massively useful, RezKit will almost certainly need to secure additional investment further down the line.
“My role as a NED is being somebody outside the intense bubble of a small business; someone to bounce around ideas with”
Another enjoyable thing we’ve been working on is RezKit’s rebrand and marketing strategy with Estrella Ventures. They’ve created a really strong brand image that I think will enormously help us. This includes new logos, a refined visual identity, improved messaging and a new website. I’m really looking forward to seeing that out in the world this autumn, so we can push RezKit harder in the market with more confidence. All of it looks and feels right.
Otherwise, as Matt said in his own Q&A this month, my main role as a NED is being somebody outside the intense bubble of a small business. Someone Matt can talk to and bounce around ideas with. He and I have a weekly phone call, and a monthly half-day where we sit in the same room together. I also join him on the investor calls with Jenson, where we update them on what we’re doing, along with any challenges and successes.
Chris Thompson is a Director of the Firebird Partnership, with almost 20 years’ experience of leading and growing businesses in the travel and tech sectors. His focus is on creating strategy, building teams, and devising processes that are both efficient and value-building.
Learn all about Firebird at www.firebirdpartnership.com
Explore the RezKit system and get in touch at rezkit.app
*
Also by Chris Thompson:
Comments