Fundraising in Pakistan: A how-to

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If you're based in Pakistan, what the best way to raise local funding? With over 7 years of experience in running startups, Nash explains the best way forward.

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Fundraising in Pakistan: A how-to

  1. 1. Fundraising in Pakistan Muhammad Nasrullah Founder and BDFL at Pring Twitter & Pring: @nash Facebook fb.com/nasrullah
  2. 2. Talking About Local Fundraising • Raised in excess of $2M to date • Summary of my experience
  3. 3. Caution • Fundraising sucks • It’s a necessary evil in most cases • Best advice to you: Avoid Fund Raising (if you can)
  4. 4. The Early Days of Entrepreneurship • Think US in the 50s or 60s
  5. 5. Capital is Expensive in Pakistan • Less equity for more money
  6. 6. Before you start fundraising • Use money from family, friends and fools • Bulid a working prototype • Get user traction and demand • Once you have the traction figured out, fundraise for scale
  7. 7. The ultimate goal of a startup? • To become a profitable business with a repeatable, scalable business model
  8. 8. Think Revenues • People, Products and Profits • If you plan on staying in Pakistan, reach breakeven as soon as possible
  9. 9. Why Breakeven? • If you’re working on funding, there is always an end-date to that funding • Once it ends you’ll have to raise more again. You’ll be at the mercy of investors and worse, you will be desperate • If you are breaking even or profitable you can fundraise at your time at your benefit
  10. 10. Who do you fundraise from? • Look at successful people in your field • Self-made entrepreneurs will understand your pain the most and will empathize with you the most
  11. 11. Look for SmartMoney • Dumb money: is just money • Better: money from someone who can be a great mentor • Even better: someone who has the connections to make your startup successful • Even better-er: Connections, know-how, self- made entrepreneur, well respected in the market and has money
  12. 12. Actually: Avoid Dumb Money. Keep as Last Resort • Do you really want to ‘owe’ the seth 5+ million rupees?
  13. 13. Go breadth-first rather than depth first • Ie: talk to everyone at the same time • Do not do approach one-by-one, you will never build up momentum • The best way to speed any negotiation is to introduce competition • It’s fine to be talking to upto 30 parties. I did 40 at one time.
  14. 14. Fundraising dirty little secret: It’s heard mentality • The toughest part is getting the first yes • Once you have one popular person saying yes, the other investors will be keen and more interested • This works well if the first funder is well- known • No, not a verbal yes, a check is great
  15. 15. How Much? • Capital in Pakistan is expensive • After the FFF round, the next is a larger round but you will probably will have to raise more money later. • But do not give away more than 50%, do not lose control. • Corollary: avoid investors who ask for too much equity and control. It’s a huge warning sign. • What’s your exit strategy? How many rounds of funding will it take to get there? Keep atleast >20% when you reach there
  16. 16. How? • Get a good intro before meeting the investor • Go in for an informal talk and leave with a one-pager executive summary • Some investors will require a slide deck, keep it handy
  17. 17. What should I talk about? • Elevator Pitch • The Problem • Solution (Demo) • Business Model and Market Size • Secret Sauce (aka competitive advantage) • Competition, marketing • Team • Deal Terms (Money, equity etc)
  18. 18. Great Deck Samples & Guides • Sequoia: http://www.sequoiacap.com/grove/posts/6bz x/writing-a-business-plan • Dave McClure: http://www.slideshare.net/slidesthatrock/ho w-to-pitch-a-vc-redesigned • Pitch decks of popular companies: http://PitchEnvy.com
  19. 19. Parting Thoughts • The number one job of the entrepreneur is problem solving • Fundraising is a problem and a unique one in Pakistan • Your company’s success relies upon you hacking fundraising • You will get constantly rejected. Don’t take it personally. Build emotional resilience. • Very few say ‘no’, most give the long silence
  20. 20. Good Luck! Questions?

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