Analysis

After Getting Rejected by 30 Investors, Here Are Things I Learned

Publicity and finance are two inseparable pillars that keep a startup flying high. However, only few, really few founders enjoy sufficient financial resources ever since they start career, whilst most of them lack of this facility. Unfortunately, stricter competition has forced them to spend big from the very beginning in order to survive, regardless on whether they possess the resources of not. Noting this fact, what can founders do to enable their startups staying alive?

Find loads of investments, as it can help founders to feed their startups, including hiring professional experts. Moreover, the received capital can also be allocated to their marketing campaigns and product development.

Does a startup must get funded to be successful?

Not really. There are respectable number of startups which went bootstrapping and enjoy huge popularity, some, like Envato, 37Signals, Mailchimp, and Kaskus, even suceeded in luring hundred thousands of loyal users. Those startups’ stories proved that bootstrapping might be a solution, even though in reality bootstrapped startups won’t enjoy the same growth as those which get invested.

Investments often come in a bundle, along with business tutorial from the imnvestors and connections to new relations and bigger brands. For first time founders, this will obviously be the ultimate offer of their life.

However, good things are hard to get. Thus, to know the investors’ criteria on how an ideal startup would be would be a great benefit. Below are the ones shared by Takahiro Suzuki, CyberAgent Ventures Indonesia’s GM:

  1. Whether its products/services can win the local market or not
  2. Possessing the potential to grow the business much bigger
  3. The originality of its business
  4. Having rational business strategy and scenario
  5. Implementing Business and strategy management structure
  6. Its founders and registered members

If you can meet all those six requirements, then investments will come to you.

Sribu’s Journey to Get the Seed Funding

Six months after being launched in February 2012, Sribu finally receive its seed funding from Singapore-based East Ventures. Surprisingly, the process was considerably simple, and East Ventures was the very first investor I went to.

We were a pair made in heaven. Soon after the first meeting, we were awarded the term sheet, approved valuation, and ratified MoU. Even though I also went to other investors, only East Ventures that had the real intention of investing at Sribu.

Although it seemed pretty simple, I learned my lesson; it wouldn’t be that easy to convince investors to put their money on us and gamble.

Thirty (30) Pitching Sessions to Series A Funding

After a good first year and blossoming traction, I started on browsing for investors in order to take Sribu to the next level. I didn’t have any slightest expectation that I’d do things that I did nine months later after going out to start the quest. It was a nightmare..

During those nine months, I pitched to 30 investors, new and old, local and non-local. I went from one place to another, brought along my laptop everywhere, went with the same pitching deck way too many times that it was perfectly planted on by brain, and answered the same questions over and over again.

Some of the investors required the third or fourth meeting before giving their final decision, some others even did’t give me their definite decision; they left me hanging. As a single founder, I could only get in touch with up to three investors at once, as I too had to take care of my business. Every investor has their own requirements and perspective, forcing me to specify my presentation slides into a number of different drafts. Only then I knew that establishing the investor relation is a full time job.

Ironically, doing it repeatedly had turned me into a hater of pitching activity. But I still had to do that annoying routine to keep my business rolling. Capital injection is fundamental.

How did I feel when I got turned down by many investors? It brought me down, obviously. Sometimes I doubted my own products. Is Sribu actually attractive enough or is it me who lacked of the ability to convince people? So many of doubts and despair.

After series of disappointment, Sribu finally found the light. In February 2014, right two years after the seed funding and a year after I started browsing for another one, Infoteria decided to put a series A funding at Sribu.

There are four valuable lessons that I could draw from my experience in fighting for investments:

1. Growth

Without having a positive trend of growth, it would be hard to collect investments. Our company must be engaging to investors. Therefore, after securing the first funding, startups must directly invest it to boost their traction (growth). The better your growth is, the sexier your company will be in the eyes of investors.

2. Timing

Every country has each own economic condition. In the U.S, where there are more investors and the economic is more stable, startups can easily get invested. In Indonesia, we don’t have such privilege. Life is harder here. Thus, the timing of searching for investors depends highly on whether the ecosystem in the country is ready or not and whether the national trend is positive or negative. If everything is positive, there’d be much more money coming your way.

3. Compatibility with Investors

I shared the same vision with Mr. Willson Cuaca of East Ventures and Pina-san of Infoteria. We always pursue win-win partnership, we don’t want to be the only party to benefit. Therefore, the process wasn’t that long for Sribu to partner with East Ventures and Infoteria, since we clicked since the very beginning.

4. Luck

Often being forgotten, luck actually plays a significant role in this matter. As for my experience, I crossed path with Infoteria when the company was in the process of expanding outside Japan, and got introduced to Pina-san through one of my friends. It was all happened only in three months, luck was the only answer to that coincidence.

Getting investments is indeed challenging. Prepare your presentation really well before meeting investors. Good luck!

“What doesn’t kill you makes you stronger” – Friedrich Nietzche

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This article is re-published with editing and permission from its original author. This article is originated from Sribu’s Blog.

Ryan Gondokusumo is Sribu’s Founder, an online graphic designer platform that has satisfied more than 2.000+ customers. Follow his Twitter account, @redjohn_G, to know him better.

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