This interview was held by Burak Buyukdemir and the article is written by Milambo Kabeleka, contributor author at Startup Turkey
This is the 5th from a series of interviews with top venture funds in Europe by Startup Turkey. Propeller is a Jordan based startup accelerator, focused on technology and product. They work with startups on building scalable technologies ready for growth; putting them on a fast track to product-market fit, facilitate connections to the right investors, mentors, employees and suitable industry stakeholders.
An enlightening interview with Co-founder Tambi Jalouqa and Manaf Asfour the Principal Venture Capitalist for Propeller shed some light on both the accelerator program offered by Propeller and the great advise that Startup Founders can use in their search for funding.
Tambi Jalouqa is a co-founder and CEO of Propeller. He worked as a software engineer for a few years until he opened a software development company called Binary Interactive. After running it for six years, He and a partner Zaid Farekh started investing in companies gradually, and this resulted in Propeller, which started focusing on not only investing but the product and technology as well.
Manaf Asfour, comes from an investment banking background, working for an investment banking firm in Jordan.While studying his MBA at IE Business School in Madrid, Spain, he caught the entrepreneurship bug, which compelled him to start his first company; he ran it for a year, closed it and came back to Jordan to join the startup ecosystem. He carried with him the vast experience he gained and the many lessons he learned while running his business as he joined Propeller.
Propeller prefer companies that have technology as a main part of their competitive advantage
Propeller was established in early 2016. As of today, they have 10 companies on their portfolio. Their sweet spot is post friends and family and pre Series A, in terms of the stage are the most ideal, to join their accelerator program. Seeing as the Propeller’s founders’ background is in technology, they prefer companies that have technology as the main part of their competitive advantage, where they can add the most value. The average ticket size is US$150 000 for both investment and acceleration.
About the acceleration process
Startups can apply to join the Propeller acceleration program through their website, or physically at events. After their first contact with the company, startup founders go through the initial 2-week screening process. This is done through research, field evaluation, and interviews. They assess co-founder dynamics and the team’s energy, to see how well they work together. After that, they go through the traditional Venture Capital screening process. If they still like the idea, they will go ahead and invest. The whole process takes about 3 months.
About 80% of the portfolio is doing well and thriving. Their success is evident through the 7 out of 10 startups that went on to get follow-on investment attracting other investors after receiving their Propeller investment. Their first company to reach Series A is POSRocket, which allowed them to expand to three new markets.
Also there is a physical incubation space for startups that need it, while some of the companies are incubated remotely.
“One size doesn’t fit all..”
Propeller believes one size doesn’t fit all so it offers a customised acceleration program for each startup, offering specific help to each startup. Every startup has its own needs, which is why they work with them individually. Driven by this method, Propeller does not have specific times for cycles. They accept applications all year round.
Turkish Startups in their radar
Investing in Turkey is something in their radar and they look forward to working with Startup Turkey to get into the Turkish market.
Red flags of Propeller
Propeller puts a lot of emphasis on co-founder dynamics and how well they work together. Since the startup ecosystem is small, it is easy to research the companies and keep track of their traction.
There are always a couple of red flags they look out for such as startups that have been stuck on the idea stage for too long and co-founders that do not demonstrate coachability.
It is difficult to achieve and evaluate the market value of a product in the early stages. It is usually determined after a few months of interaction with customers. When your customers start knocking on your door then you know there is real value for your product.
About the Lean Startup methodology; “Launch fast and fail fast”
To fail at launching an idea has its positive impacts on a company because you will move on and improve. However, failing for the sake of failing is not helpful.
Advise to startup founders as they try to raise early funds from micro VCs.
An effective way is to approach fundraising as you approach a sales exercise, by creating a funnel of investors the same way you have a funnel of customers. Find out how well you align with these VCs, do your research through their portfolio companies, websites, and the media. Talk to as many investors as you can to create demand for your startup in the investor community, by doing this you start gaining leverage and become in a better position to transact with the right investor for you.