Endeavor Egypt Board Member Tarek Fahim had some valuable tips to give to MENA founders and entrepreneurs raising seed rounds, which he posted on his personal Facebook page and which we’re resharing below. Tarek, an Egyptian entrepreneur and a software engineer by education, iis the Managing Partner of Endure Capital, a cross-border Venture Capital fund and an early investor in Careem, Wuzzuf, Aspect Biosystems, Boom Supersonic among many other leading startups in the US, Canada, UK, and MEA.
August 21 at 8:58 AM
“The below are some practical tips to MENA founders to overcome possible pitfalls at seed rounds.
- Don’t give up more than 20% of your company at the seed round for the money you need to grow the business for 12-16 months.
- Use standard funding documents like SAFEs and 500s KISS.
- Hire a competent lawyer and understand every single term in the Note or Termsheet. Don’t take the investor’s lawyer.
- Try to have an advisory board
- In case of a party round always search for a lead investor you can trust.
- Before taking money from an investor, ask his/her portfolio companies about him (non-successful and successful ones)
- Agree on the targets of the next round/phase. Not necessarily to achieve it but the discussion is so revealing and will create alignment.
- Ask him/her about what he/she would like to see in the monthly reports. If he/she asks for too many at this early stage or didn’t ask for any, think again.
- If it is a fund, ask about the major LPs and fund timeline
- Don’t take corporate venture money or Strategic investor money at the seed stage unless there is a very viable reason other than the perceived access to distribution or key first clients.
- Don’t wait, stop or even depend on closing the round to carry on the business.
- If you are not comfortable, bootstrap or get investors from outside the region
- Finish the round quickly!”