What I learned about fund raising in the past 12 months

In the past few years, we’re seeing a huge boom in fund-raising for startups in South-East Asia. Startups are raising money at valuations higher than ever before having people wonder if we’re in a bubble.

Personally I’ve never raised money for Netccentric or Nuffnang before our IPO this year. Fund-raising can be a distraction to the main business because it takes a lot of effort and we never really had the fate or the luck to meet the investors that we think would work well with us. So the Netccentric you see today before IPO was the result of our SGD65,800 startup capital that we had from the beginning. As such our DNA was to make sure our business units were all profitable and able to contribute to a stream of profits that we could use to reinvest.

That’s a good and a bad thing. The good thing is that post IPO, Ming and I still own a substantial stake in the listed entity. We own approximately 36% each of Netccentric Limited.

The bad thing is perhaps if we had raised money earlier we could have scaled quicker.

In any case this year we went for an IPO and it was the first time we properly went into fund-raising. I came out of this experience with a lot of insights about the process and learning from the mistakes that I had been making in the past. Some really newbie ones.

Here are the most important things I’ve learned.

1) Don’t over-introduce your company in the introduction of your presentation

This is a mistake I’ve seen a lot of startups make and is a mistake I used to make myself. You only get one chance to make a good first impression. Make a bad one and the investor is tuned out for the rest of the presentation.

I’ve seen presentations that start with what the company does and then on to the capital structure, the founders, the team, the use of proceeds and then the financials.

Why is that wrong? Because investors don’t really care about your company beyond a simple answer to “What does it do?”.

What do investors care about? If you answered “Considering they are taking the time to listen to my pitch I’m assuming, my company?”.Well then you’re wrong.

Investors don’t care about your company unless you’re an AirBnB or a Snapchat. They care about HOW YOU ARE GOING TO MAKE THEM MONEY. Focus as much of your presentations as possible to how much money you’re going to make them.

So the way I would start a presentation now is first with a VERY brief introduction. Then jump into how you’re going to make them money. Your traction, your growth plans, how much money you will make when you’re there, what your comparable are and how much you can be acquired for or IPO for.

After you’ve told them how you’re going to make them money, THEN you can go into the details of your company. The capital structure, the team etc etc.