Fundraising in Pakistan

Muhammad NasrullahFounder and BDFL at Pring

Twitter & Pring: @nashFacebook fb.com/nasrullah

Talking About Local Fundraising

• Raised in excess of $2M to date• Summary of my experience

Caution

• Fundraising sucks• It’s a necessary evil in most cases• Best advice to you: Avoid Fund Raising (if you

can)

The Early Days of Entrepreneurship

• Think US in the 50s or 60s

Capital is Expensive in Pakistan

• Less equity for more money

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

The ultimate goal of a startup?

• To become a profitable business with a repeatable, scalable business model

Think Revenues

• People, Products and Profits• If you plan on staying in Pakistan, reach

breakeven as soon as possible

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

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

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

Actually: Avoid Dumb Money. Keep as Last Resort

• Do you really want to ‘owe’ the seth 5+ million rupees?

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.

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

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

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

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)

Great Deck Samples & Guides

• Sequoia: http://www.sequoiacap.com/grove/posts/6bzx/writing-a-business-plan

• Dave McClure: http://www.slideshare.net/slidesthatrock/how-to-pitch-a-vc-redesigned

• Pitch decks of popular companies: http://PitchEnvy.com

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

Good Luck!

Questions?