The 5 startups in this Batch 4 now have their workspace at the GP house along with seed funding and logistical support provided by Grameenphone and Startup Dhaka. The continuous guidance of in national and international mentors makes this boot camp a learning experience for the teams which help them in their startup journey.
This week’s workshop was conducted by Executive Director of Olympic Industries Ltd Tanveer Ali who has worked with previous batches of Accelerator in the past as well. At this session, Tanveer Ali discussed with our teams how fundraising works and how investors think.
Investors prioritize a few things before they decide to fund a startup.
The founders are most important to investors. They want to see that the founders have passion and conviction for the startups. While making the decision of investing on a startup, the investors don’t prefer a startup that has its founders working on multiple projects at the same time because it shows a lack of commitment. At the same time, in terms of tech based startups, investors prefer if the founders come from a tech background as well because that ensures that they know what they are doing. Too many founders is also something shareholders don’t prefer because that means lack of control and less equity for them. Too many founders bring way too many ideas which can sometimes be bad for the business. So it’s better not to have more than 3 members in the chief roles of a startup.
It’s important that you assess the market you want to work in very well. Whether the market you want to enter is scalable and feasible in terms of financials and marketing. Startups and investors need to have prior knowledge about the risk and threats that’s involved in the particular market. Otherwise it becomes very difficult to predict the scopes and opportunities the market holds for you.
Before pitching to investors, a startup should always test their product or service in the market and see how it goes. It’s essential to take market feed and show it to potential investors so that they have the information to evaluate and consider your business. If a startup can prove their scalability to investors and show that their venture received validation and traction from the market, then it becomes easier to attract investments.
Startup Ecosystem of Bangladesh
Till now, the startup scene of Bangladesh is very challenging. It’s tough to choose this path and work on your idea and make it greater. It’s been seen that many startups exit the market after operating for a few years. On top of that there aren’t proper and established exit strategies in our ecosystem whereas in places like Singapore and Silicon Valley, there are options of IPO and acquisitions by renowned conglomerates. Bangladesh has still not reached that level of strong infrastructure structure when it comes to startups.
Few things should be kept in mind when startups start looking for funds. It’s important to not be overconfident while trying to be convincing and charismatic rather trying to be humble with investors. Overconfidence can lead to overvaluation of the business which can be extremely detrimental. To make a product more desirable to investors, startups should put their product or service through car market tests. Market fit test and HV testing can be 2 examples of the tests. While pitching to investors, you need to show how many people you have reached and how many leads you have generated. Startups should continuously try to discover multiple dimensions of their product. This means, one product or service should have different features so that demand keeps increasing.
Funding is just the beginning, it helps startups to accelerate their growth and achieve their objectives.