StartUp Academy: How to attract investors' attention

In partnership with Mashreq Bank, The Arabian Business StartUp Academy looked at how sound financials and proper accounting systems contribute to securing start-up investment
StartUp Academy: How to attract investors' attention
Abrar Ahmad, a partner at Travel Capitalist Ventures.
By Tamara Pupic
Wed 20 Aug 2014 01:21 PM

“There is an appetite for more risky investments, which shows sophistication and the longer-term approach of local investors,” said Abrar Ahmad, a partner at Travel Capitalist Ventures, to the audience of the Arabian Business StartUp Academy yesterday (Monday).

The breakfast workshop organised in partnership with Mashreq Bank and entitled Book Keeping and Accounting: Preparing your Business for Funding and Growth, allowed attending investors, accountants and start-up owners to exchange opinions on the investment culture in the region.

“Think of book-keeping and accounting as the 'behind the scenes' version of metrics,” Ahmad added during his presentation, offering important information about what investors look for in an investment proposition.

“Just like you have hashtags and statistics for your sales and marketing, you have burn rate, cash flow statements, EBITDA, and similar for the accounting side of your business.”

His wealth of hands-on experience on the matter stems from his investment activities around the world as well as an active position within the region’s start-up ecosystem. He is on the advisory board of FishFishMe, a Dubai-based fishing charter platform, and in5, one of Dubai’s start-up incubators, to name just a few.

Speaking on the sidelines of the event held at The Address Downtown Dubai, Ahmad opined that the regional start-up ecosystem offers more opportunities to both investors and entrepreneurs when compared to other parts of the world: “Start-ups are able to deal with large companies here faster than in other parts of the world.

“We have five or six months old start-ups which have reshaped the tourism industry. They wouldn’t be able to do that in the US as fast and as trouble-free and friction-free as they were able to do in the region.

“I think that the investment culture is actually quite good. There are more individual investors at an earlier stage than at a later one. But that’s only because there are not that many later-stage companies.

“The start-up culture is relatively new, but there’s already a lot of funding going on – companies that are getting it are sometimes even pre-revenue.”

One of the attendees, Benjamin de Terssac, founder of Carpool Arabia, is currently preparing his Dubai-based start-up for a “post-launch but pre-revenue generation” round of funding.

Carpool Arabia is an in5-incubated tech start-up, launched earlier this year in Dubai, which has already created a local community that connects drivers with empty seats to passengers looking for a ride. It also offers solution for corporates who want to turn co-workers into co-drivers.

He shared with StartUp what they expect from the first seed funding call: “We’ve followed a boot-strapping strategy till now. We are now calling for seed funding proposals to reach the stage when the proof of concept is validated.”

Speaking about their potential ideal investor, de Terssac said: “I think that taking money for money is a big mistake. What we are looking for at this stage is to have a partner, somebody who can also give us guidance, mentoring, and access to network.

“Also, what is ideal is that if the investor has already had other rounds of funding. Somebody who can take us from $20,000 USD funding to $2 million funding.”

Advising other start-ups to make sure that their product is in line with the potential investor’s portfolio, he added: “In our case, we’re looking for people who have invested in tech start-ups, web-based services, and original products. That’s the key.

“It’s important because if we grow, we have to grow together.

“We will definitely be more comfortable with someone who has the capacity to follow us through the next rounds of funding, and not over-estimate his or her network and experience in this area.”

The Academy’s second speaker, Majeed Lakhani, director of investment and project funding at ADAM Global, revealed that investors of any business would have questions about its operating results, financial position and cash situation.

Drawing on three decades of experience in finance, Lakhani stated that well-organised and easy to read financial statements allowed a company to make more effective business decisions, and said:

“Sound financials, reliable systems and accounting controls drive the growth ambiance to entice the requisite business funding.”

The next StartUp Academy is due to take place on Monday, 22nd September, under the theme Recruitment, Employee Engagement, and the Legalities of Hiring in the UAE.

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