In our new StartupScene op-ed series ‘The Real Deal’ we ask some of the region’s most successful entrepreneurs to share their stories, passions, struggles and personal thoughts on the workings of the ecosystem and their own entrepreneurial journeys. This is a glimpse beyond the headlines, the raises and the often misleadingly tantalizing veneer of the fast-track.
We’re thrilled to kick-off this exciting new segment with Ahmad Hammouda, co-founder and CEO of Thndr, Egypt's first digital investment platform and first licensed player since 2008.
In February of this year (2022) - Thndr announced a $20 million series A investment. The round was co-led by Tiger Global, BECO Capital and Prosus Ventures, in addition to participation from Base Capital, first-minute and existing investors Endure Capital, 4DX Ventures, Raba Partnerships and JIMCO.
Naturally the deal was lauded in the press and the spotlight was firmly on the startup’s stellar success. Yet the media rarely dissects the impact these raises can have on founders, the tumultuous journey in the lead up to deal and ultimately the intense learnings that come as par for the course.
In this powerfully honest op-ed Hammouda shares his learnings while generously sharing the Investor Pitch that would help transform his vision into a reality…
As a founder, reading headlines of startups raising large amounts of money used to cause me a great deal of stress. Those 3 am late night thoughts would bring about almost immediate panic. What are we doing wrong? Will I ever be able to raise as much? Are all the other founders more qualified than me? Why aren’t we making the news?
Doubt will always manage to creep its way into every aspect and phase of your fundraising process—get used to shutting that little voice up, often!
Over the years I noticed how fearful founders can be around VCs and investors. I hope this op-ed can help demystify some of these fears, and kick-off a tradition of Egyptian founders publicly sharing their learnings with their fellow founders.
We got lucky and raised a big round from amazing investors. Here are some things I learned. I hope they can help you in raising your next round.
- Capital is more abundant than quality founders who are building impactful startups for the right reasons. Find the right team and idea… the money will follow.
- Keep knocking on doors until you get a “Yes” - if it’s a “Maybe,” then it’s a “No.” Move on and look for the next door to knock on.
- Every investor has their own agenda when it comes to trends and bets they want to take. Keep looking for investors who are most excited about your region, industry, vision and team!
- Do not shy away from reaching out to international VCs from the get-go. Believe it or not, they like taking these kinds of bets.
- There’s a myth going around that international VCs don’t invest at an early stage. The fact is, if you do not reach out to them, they will not invest. So, reach out.
- Reduce your reliance on fundraising by building sustainably, and if you can always start your fundraising when you’re not strapped for cash. Your success is not measured by the number of $$$ you raised.
- Your success is measured by other factors like impact, team quality, customer satisfaction, disruption, and innovation.
- Always try to look beyond the money offered by investors. Make sure you reach out to investors who believe in the impact of what you are doing, who understand the unique challenges your startup faces in an emerging market, and who are always there to extend a helping hand whenever needed - whether this is through sharing learnings from other markets or connections with their network.
- Always have a strategy that reflects your specific needs and goals. Do not be afraid to shoot for the stars, and thicken your skin, ‘cause you will receive a good amount of “No”s.
Here’s a quick outline of the steps we followed when we were fundraising:
- Step 1: Reach out to other founders who have done this before to get insights and learnings. I remember back in September 2019 when we were raising our first round for Thndr, I knew nothing about this world. Convertible note, WHAT? Seed Vs PreSeed, WHEN? VC vs Angel Investors, WHO? I reached out to Trella Founder Omar Hagrass to understand what to do when and with who. Hagrass connected me with Saman Sadeghi, who has been instrumental in our fundraising efforts since.
- Step 2: Build your investor pitch. Your product or company will not sell itself regardless of how good, innovative and impactful it is. Your pitch should do that. As you can see from our investor pitch, it took us 8 slides to sell our story. No need to overkill it, get straight to the point, you don’t want to lose anyone’s attention.
- Step 3: Build your pipeline of investors, categorize them by tier depending on how much you want those investors, and start looking for ways to reach out
- We had a list of 102 investors, 5 of them were invested in some of the world’s leading investment platforms.
- We shared our intention to shoot for these investors with our existing investors. Asked them to do warm introductions to those investors.
- Then Seif Amr and I kept practicing and rehearsing our pitch with literally everyone we know We got our first YES after 45 NOs.
- Things to note:
- Make sure you pitch a story and not a couple of slides. Investors can’t follow up with every company that pitches. A good story is easy to follow and remember. Your goal is to be memorable and frighten them from crossing you off (FOMO)Make sure not to use buzzwords or jargon, it’s a turn off
- Communicate clearly, transmit credibility, and be excited
- Be mindful of time -- Have a clear agenda -- 5 minutes intro, 5-10 min pitch. Always leave time for questionsDo not squeeze too many meetings in close proximity. Max three a day with a 30 minute buffer between meetings. You want to keep your energy up in meetings
- Do not pitch to your most coveted investors first, start with the ones at the bottom of your list Do not show uninteresting or unrealistic figures
- Step 4: Care less about the results and care most about putting in all the effort and trust the process. It only gets better.
I understand that having an impact is not easy, but let’s work towards making the world a little bit better through the effort we put into our startups. Our promise to the ecosystem is that Thndr will be a beacon of support to all. Thanks for reading and good luck. ⚡