This interview is conducted by Burak Buyukdemir, the Founder and CEO of Etohum, a Turkish accelerator program. Its is part of the series of interviews done with top global ventures.
VentureSouq is a GCC-based early stage venture investing & educational platform. VentureSouq launched in 2013 out of a tangible need for a platform for regional individuals and players interested in investing in technology-enabled startups. Currently, VentureSouq services angel investors, family offices, institutions and corporates. The team provides educational content around venture investing delivered via a number of programs throughout the region. The ultimate goal is to create a new class of informed early-stage investors that will serve as a viable funding source for emerging companies both regionally and internationally.
Abdul Rahman is an associate at VentureSouq. Previously, he was a manager at IMS, a Dubai-based boutique marketing agency that plans and executes corporate and governmental events. Prior to IMS Abdul started his own Tech services company at the age of 23 before moving to Dubai. He started his career at a Perth-based startup that sells medical devices, handling sales and marketing. Abdul holds a B.A.from the American University of Beirut and a Graduate Diploma in Commerce from the University of Western Australia. He also holds an Islamic Finance Qualification and passed the CFA level 1. Abdul is a guest lecturer at UAE and Lebanese universities in entrepreneurship and financial engineering classes. His mission is to empower the next generation of entrepreneurs in the MENA region.
VentureSouq does not operate as a normal fund; they source deals as a traditional VC would do. However, their network of investors comes in on a case-by case-basis based on their respective investment theses. VentureSouq comprises of a team with complementary skills and extensive backgrounds in private equity, strategy, corporate law, risk and data analytics.
The team focuses on technology-enabled businesses globally. They function through a set mandate structure, they have a syndicate pillar for angels looking to invest in tech startups. They work with family offices where the next generation taking the helm understands the need for portfolio diversification and the need to invest in disruptive technologies often related to their line of business (e.g. construction or real estate tech). They also set up multi-investment vehicles on an ad hoc basis whereby funds are pooled between investors and deployed across multiple opportunities based on specific themes.
VentureSouq is location agnostic with regards to dealflow. So far, out of its 65 portfolio companies, half are US-based and the rest are split between MENA, Europe, Africa, India and China. They do not invest in ideation/very early stage ventures. The companies VentureSouq review need to be up and running and demonstrate traction. The team’s preferred stage is late seed/Series A..
The team looks for commercial coherence in the founders’ vision for the company. The startup pitch decks typically include initial financials that allow the team to understand the business model and approach. If the conversation is taken further, the team expects to see a full data room populated with all relevant materials to conduct their due diligence.
VentureSouq offers ticket sizes ranging from $100,000 to $4m. Intending startups can apply via the website www.venturesouq.com/entrepreneurs-form/. Entrepreneurs who are at the ideation stage are advised to wait until they start gaining traction, as their application will not be reviewed.
Some of the red flags VentureSouq encounters with startup teams include:
· Team incoherence – key roles missing or inexperienced team members
· Founder ego and unwillingness to listen
· Lack of commercial focus and unawareness of competitive landscape
The team rarely invests in idea stage startups, however, when they invest early, the first criteria looked at is the founders’ background; the best companies have been those led by a strong and agile team with extensive sector experience that comes with a flow of relevant BD networks, access to the right pool of human capital and the right investor connections early on.
Abdul advises startup teams to do a few things when looking for investors, they include:
· Do your own due diligence on the types of investors you want on your cap table
· Build relationships with your potential investors early & listen to their feedback regardless of whether they invest or not
· Understand your numbers inside out
· Set up a clear strategy on how to use your funds and have a concrete plan in growing your business to reach the next milestone
· Look for family offices and corporates who would be interested in a potential strategic investment and that can also integrate your services within their existing lines of business