You might have heard that Nugit — a marketing data analytics start-up — picked up a neat S$7.1 million in funding. And then you look at your own balance sheet and wonder why you can’t do the same.
Truth is, you can. You’ve just been doing it all wrong. In fact, we raised $550,000 in 4 weeks— and you can do even better than that. Here’s how:
#1: Accelerate, accelerate, accelerate
An accelerator to a start-up is what breast milk is to a newborn baby. It’s got everything you need, from technology, office space and a whole lot of like-minded individuals hungry to launch The Next Big StartUp.
It may be expensive but it’s worth it. We joined the SPH Plug and Play programme, which got us S$30,000 (for 6 per cent equity, ouch). It was hardly the amount we needed — but it propelled us forward.
Think of it as fuel to sustain your idea: It keeps your co-founders and you alive, helps you build that MVP and gather some validation. Most importantly, it also helps you raise more funds. Remember, it costs money to make money.
#2: No = Yes…just not yet
Need to raise capital? Every one who bothers to listen to you is a potential investor. They may not be willing to part with their money just yet, but don’t strike them off immediately. We’ve learnt that a ‘no’, no matter how forceful, is just a ‘later yes’.
And we milked those who said ‘no’ as well. We found out why they didn’t want to invest and asked them to introduce us to 3 other people who may be interested. Build on the feedback they give you — respond to what they say, and chances are, they’ll respond to what you say when you approach them again (which you should).
#3: Time is money
It may be cliché but it’s true. Having a sense of urgency made us chase investors (almost hound them), but it got the job done. Set a timeline for them — and your team — to follow. This gives all of you a no-later-than date, which encourages action on everybody’s part.
But that’s not enough. Draft your own convertible note agreement for them. Investors usually aren't interested enough to send you term sheets, so be proactive and make life easy for them. It’s a win-win for both of you when it is. Use wisely the investor's time, make the best first impression will make it all easier for you.
#4: Beyond Singapore
Investors outside Singapore are hungry for a bite of start-ups based in the country — give them what they want. The Government has created a solid reputation for us everywhere we go, so milk it for all its worth. Almost 1/3 of our final amount was raised from overseas.
#5: All files on deck
Your investors may ask to see anything when they’re carrying out due diligence. From your founders’ employment contracts to your technology roadmaps, it’s important that everything is within reach. A virtual data room is a hassle-free way to share documents with potential investors.
PS: This is an opinion piece by Keith Tan, Group CEO of Wonderlabs. Wonderlabs is the leading service provider helping companies build and manage software development teams in Indonesia and Vietnam. Across our various shared and dedicated centers, we have over 350+ active software developers. Since our founding in 2015, we have grown rapidly through innovation and our relentless mission focus - Connecting you to success and productivity. Alumni of Wonderlabs have gone on to work at some of the biggest companies in Southeast Asia.
"I started Wonderlabs because I experienced the problems of building and managing a distributed software development team in Indonesia from 2011 to 2015. I wanted to make it seamless and frictionless for companies to build and manage teams. On the other hand, I found that there are so many amazing software engineers in Indonesia and Vietnam and wanted to connect them to employers in Singapore, Hong Kong and Jakarta" - Ivan Chang, Executive Chairman, Wonderlabs Group