Ramy Adeeb, ready to disperse advice. (Image via Ramy Adeeb)
When Ramy Adeeb sold his startup, a news article curation site Snip.It to Yahoo! at the start of 2013 he’d already had a career as a software developer, worked at a VC and raised two rounds for his own startup.
He’s currently working on a new startup, and for the moment he can only say it’s “in the SMS space”.
At a recent TechWadi event in Beirut Adeeb stated that there were three things essential to building a company: build something people want, hire people you would work for, and don’t run out of cash.
Here he shared with Wamda what he knows about raising that money.
Don’t raise too early. Once you have raised money you will start spending it - hiring a sales team, increasing your marketing spend, etcetera. It will help you scale but will seldom help you find the market. Raising money is like pouring concrete: you shouldn't do it until you know what house to build.
Raising money may take a while. So don’t worry about timing it perfectly. If you have built something people want and need capital to grow the team or accelerate its growth via marketing, then raise. But if you don't know if there's a product market fit, or you think the market isn't ready yet for the product, the money won't help you get there. Also, raising money dictates that your company exits in the future. If you want to build a lifestyle company that can turn profitable, consider bootstrapping instead.
Talk to the right investors. It’s not so much about finding a perfect fit, but more about ensuring you don't waste your time with investors who will not invest. Look for VCs passionate about your area and who write the right size check. Find a VC that has invested in your competition - but not your direct competition. It wouldn’t be a bad idea to talk to them.
You’ve got to make an impact. Once you have identified the investor, you will want to stand out. Always research the person, send them something [a startup idea] relevant to their needs.
You story must compel. We, in the Middle East, are blessed with the skills of good storytelling. Use it! And when you tell it, as well as with passion, conviction and a bit of humility, talk about benefits as opposed to features. Tell stories instead of listing bullet points. Stories stick. And don't downplay every question they ask, arrogance is the sign of a fool. Instead, talk about what your company can become. Let their greed overcome their fear.
Approach potential VCs with a lot of preparation. You want to get a personal introduction, once you’ve identified the investor you’d like to attract, but don’t go over the top - no need to stalk them. If you can’t get a personal introduction, you can cold call. But you need to perfectly craft your email - spend a lot of time researching them, but write an email in three sentences or less that is personal, relevant, with a clear call to action.
Don’t be arrogant. When you meet with potential investors you should be honest. Don't overly downplay the challenges facing you company; you will leave investors wondering whether you are complacent or arrogant. And don't waste too much time with name-dropping associates: the more they posture influence the less they possess it.
Don’t take rejection personally. I was rejected so many times, oh God. When I was raising my second round, so many people said “no”. It’s hard not to take it personally but you should not. The one quality that unites successful entrepreneurs is perseverance.
Be wary of how you get to meetings. Don't take public transportation from San Francisco to Sandhill Road. It's the primary reason you may show up late. Sweating.