A Founder's Guide to Fundraising.

Part one.

What are the 3 key areas investors are looking at during a Founders pitch?

Let’s be honest - approaching investors is a pretty daunting task.

In fact, approaching anyone at any time and asking them for money isn’t exactly an easy thing to do.

So after heading down to a recent event hosted by Futurum at the DIFC Innovation Hub, we got to hear directly from some of the leading investors within the region (their links are shared at the end of the article) about the key 3 areas that distinguishes the top founders pitches from everyone else.

1 - Who are you?

Not the business. Not the product. Not your financial projections. You.

Being a founder can be incredibly hard which means, in most cases, a business's success or failure is wholly (or at least largely) dependent on you as an individual.

Your job, ultimately, is to get other people excited about the problem that you’re trying to solve - whether it’s your customers, your investors or the team around you. According to the entire VC panel, the 3rd is (by far) the absolute hardest.

After all, your life revolves around putting out fires and dealing with problem after problem - so how are you going to stay positive with your team in the face of an endless amount of challenges? How will you put all of that negative energy to one side to ensure your team stays focused and enthusiastic about solving business critical problems?

So to surmise - you’ll have more bad days than good days so why are you the right person to navigate the volatility of life as a founder to ensure the people around you stay motivated to build something awesome.

2 - What’s your problem?

Every great product starts with an even greater problem - so what’s yours?

One of the easiest mistakes to make during a pitch is to go straight into how awesome and game changing your product is. Look at these shiny features I’m building, they’re awesome!

The key, though, is to slow down and to help investors understand the critical nature of the problem that you’re trying to solve. In other words, why is this such a big problem? Who is this a problem for? How does your product solve this problem better than anyone else can?

Investors, naturally, are excited about problems that affect as many people as possible, so ensure you have as much data as your disposal as possible about your target audience with a very clear proposal about how your product won’t just be useful but absolutely essential to your customers.

So to surmise - your product pitch should flow chronologically. Start with the why (you’re building what you’re building), then the what (the product itself is), then the how (the said product will become critical to your customers).

3 - Why are you actually doing this?

Before expanding on this point, if you haven’t read The Founder's Dilemma then I’d highly recommend you check it out. Now.

According to studies, there are typically 2 reasons why Founders decide to launch a business - maintaining control or maximising wealth. I typically think about this as the freedom from interference (being your own boss) vs the freedom to create the life of your choosing (successfully exiting a startup gives your future self some seriously exciting options).

If you’re reading this article, the chances are you’ve started (or are starting) your business for the 2nd reason (engaging with investors typically removes freedom from interference and should maximise your opportunity for success).

So, with this in mind, investors need to know that you’ve thought about your end goal as a founder.

Typically, founders dream of an exit (investors often love to hear this as it means they can make a healthy return themselves - it’s no secret that they love making money haha) so the key question you should ask yourself is WHY you want to exit.

Is it to give your family the life you never had? Is it to prove to everyone that’s ever doubted you wrong? Is it to become super cool and famous?

There’s no right or wrong answer but it’s essential that you have a critical motivator that will drive you towards your goal when times are tough and things aren’t going the way you planned (which is often the case in life as a founder).

So to surmise - why would you put yourself through this absolute stress of building a business that, in the vast majority of cases, will take years away from your personal and professional life? Consider and communicate the end goal you have in mind and then create a roadmap about how you’ll achieve it.

-

Raising capital is a seriously challenging task for anyone so, hopefully, this article will help make your lives slightly easier when it comes to navigating such a tricky world. If you’d like any additional support, feel free to contact me directly via LinkedIn.

A massive thank you to Karina Burmistrova for hosting this event with Futurum and to the panel for sharing such valuable insights - I’d highly recommend keeping an eye out for any future events that they put together as they’re incredibly useful for founders of businesses at all stages.

Be sure to check out the panelists links below here:

• Amit Grover

• Chada El Islam Benmahcene

• George Paliani

• Laura Inamedinova

• Michael Shen

• Sarah Abuagela