Finding Money That Matters
NSU Startups Next (NSUSN) started its journey with the vision to inspire innovation and to support founders of the next generation. The first cohort of NSUSN is underway in their incubation program. At NSUSN, founders are learning from experts and building a network that will serve as strong foundations for the rest of their journey as entrepreneurs.
As part of the incubation program, NSUSN is hosting a series of webinars where industry experts discuss their individual learnings with founders. On the third webinar of the series, ‘Finding Money That Matters’, the panelists were Rahat Ahmed, Founding Partner and CEO, Anchorless Bangladesh, Nirjhor Rahman, CEO, Bangladesh Angels, Anita Ghazi Rahman, Founder & Partner, The Legal Circle, and Taus Noor, Co-Founder and CEO at Gaze. The webinar was hosted by Anita Ghazi Rahman, followed by a live question-answer session from the audience. The panelists discussed the basics of fundraising for startups and an in-depth analysis of how the investor-founder relationship should ideally be like for the growth of a business.
The story of Gaze: Defining goals and the way forward
Taus Noor, CEO and Co-Founder of Gaze, a Singapore and Bangladesh-based Artificial Intelligence startup that just raised $830,000 from Anchorless Bangladesh, drew from his recent experience to go over the basics of fundraising. He emphasized on the importance of following and knowing market trends. “Startups do not initially know what will make them a billion-dollar company so they integrate their products, customer experience according to what they think will lead to success. But it is also important to have proper knowledge about the business and its goals… if the startup has the ability to be the best in the market with scaling and profitability as their goal in the long run, it will usually find ways to raise funds easily.”
Finding investors who have the right expectations
Rahat Ahmed spoke about the investor-founder relationship being key for the business’s growth, “startups are long term oriented. It is important [for the investors] to understand there will not be profits in the short run or even revenue sometimes. So the investors should be able to foresee working with the founders in the long term.” It is essential that expectations are managed in this relationship, “founders must be honest with investors and they need to be open about problems. At the same time, investors and businesses need to have aligned goals to avoid conflicts and to maintain a healthy ecosystem. Founders have an interest in creating a feedback loop with their investors; forming a productive relationship with them is essential to have the resources for the growth of their business. As a startup does well, it gets exposure to more funding in the future.”
To this, Taus Noor, a founder himself, added, “We constantly keep talking to investors even after securing investment just to build a relationship. We keep updating them about the progress of the company so that they can see the growth and advise accordingly when needed. This creates prospects for the company to raise more funds.”
Nirjhor Rahman, CEO of Bangladesh Angels said “There is an increasing number of angels in Bangladesh looking to invest in startups but their challenge is the lack of founders or the right founders. They also have a lack of time. But the angel networks are basically investment banks for startups.”
What is expected from founders?
Nirjhor Rahman covered what angel investors usually expect from the founders, “Problem, solution, and insight are looked into by us [angels]. But it is important to identify proper bottlenecks and come up with solutions to solve those problems by the founders. They need to be able to teach us about the market and have respect for their competition. Founders must be able to utilize capital properly and need to have long term vision.
Early-stage of getting investment is all about storytelling.”
What are the key areas that a founder should highlight when asking for funds from an investor? He said “it is important to verify different aspects of a business like having information about the client base and the retention rate. Financial data such as projections give an insight into the business and also about the thinking process of the founders. These pieces of information give the investors a sense of confidence.”
He concluded with “Don’t take easy money but rather focus on the investors’ perspective and their ability to give you a team.” .