My startup Meddy, a GCC-based consumer-facing online platform that helps patients find the best doctors and book appointments with them, recently raised a total of US$2.5 million in a Series A funding round led by NYC-based Modus Capital, along with participation from 212 Capital, Kasamar Holdings, Dharmendra Ghai (Health Tech Angel), Innoway, and others. While we get set to use the funds we raised to scale up our operations in the UAE, I also wanted to share some of my insights from the fundraising experience with all you entrepreneurs out there- hope these help you in your own startup trajectories!

1. Start early (as it will take a while)

Fundraising is a very long process, as you have to build a relationship with investors before they are ready to talk terms and commit. A lot needs to happen between your first call or meeting, and ultimately wiring the funds. According to a report published by MAGNiTT, 71% of startups claimed fundraising took up to nine months. So, don’t start fundraising when you have only less than three months of runway. You will probably not close in time, and even if you do, you’re unlikely to get favorable terms, because you won’t be in any position of leverage.

2. It’s a sales process

Closing a venture deal is very similar to a long enterprise sales cycle. It’s highly unlikely that your first meeting will lead to a term sheet. You will probably start with an email, which will lead to a call, which will lead to a meeting, which will lead to reviewing the numbers and research, and so on and so forth.

There are multiple decision makers along the way, and it’s key that you be spending most of your time with the key decision maker. You will know you’re making strides when they start introducing to other people in the firm to get their buy-in. Remember that it’s not uncommon for your lead to go cold on you after staying in touch for weeks or months- you may have to find another entry point to get back on their radar.

3. Manage your funnel properly

You should treat fundraising similar to how you treat a sales pipeline- you have to manage and nurture them properly. I maintained a Google Spreadsheet with detailed information about investors, their sector focus, prior investments, last meetings, etc.

Towards the end of it, this evolved into becoming a nice customer relationship management (CRM) record of all the investors I met, as well as those who I needed to meet. At the end of the day, it’s a sales funnel, and you have to keep feeding the top of the funnel with a lot of investor meetings to increase the probability of some of them eventually converting and writing a cheque.

4. Don’t underestimate a very well-written cold outreach

The prevailing wisdom is always to get warm intros to investors, and I fully agree with that. But most people underestimate a very well-written cold outreach. My lead investor came through a cold outreach on Twitter.

5. Target the right investors

Do your research to figure who would be the right investor for you, and for the stage of your company. Most investors make it explicitly clear on their website at what stage they invest in. So, don’t spend too much time chasing investors who do late-stage growth rounds, when you’re raising your seed or Series A round. You should certainly get in touch with them to get their feedback and nurture them with quarterly updates to eventually get them to participate in your next round.

However, it’s best you prioritize your time finding a strong lead investor for your round. As the name suggests, lead investors are extremely important as they set the terms for the round for them, and for everyone else to participate. They also become your partner, and they will help you close other investors.

6. Remember that venture capital (VC) funds are not the only source of venture capital

As counter-intuitive as it may sound, there are more sources of capital than just going after the venture funds. Angels, angel groups, and accelerators are, of course, a big part of the ecosystem, but not many startups are targeting family offices, high net worth individuals, C-level executives at big companies, large corporates as strategic investors, etc. Most of them are looking to diversify their investments from asset-heavy businesses to asset-light investments- not to mention their extensive network connections in the market that you can leverage.

7. Build a document for frequently asked questions (FAQ)

Since you will be meeting a lot of investors, you will start getting the same questions over and over again. Instead of winging an answer every time on the fly (and probably putting yourself at risk of saying a different answer), you should build an FAQ document for yourself where you can put concise answers that you say to anyone who asks you the same query another time. This will make you sound more confident and prepared, and investors like it when you have already thought about the questions and concerns that they have. It just makes you seem that know what you are talking about.

8. Legal takes a long time

When we first got a term sheet, I thought I can just delegate all this legal stuff to a lawyer, and have him/her take care of this. I couldn’t have been more wrong. Legal ended up taking an insane amount of my time. Legal due diligence gets very messy if not handled properly, but that’s for a different post altogether.

9. Be prepared to not get any answers

You will be meeting a lot of investors, and as such, you’ll constantly be getting feedback. It’s imperative you learn from the feedback, and improve your business and pitch deck. Some investors would be kind enough to give you an affirmative “no,” and even give a rationale behind it. This will help you move on, and spend your time and effort going after others.

However, most investors will not reply, and they’d just ghost you. VCs are notorious for not saying no to keep you on the hook, in case you become interesting down the line. From my experience raising multiple rounds of funding so far, a “yes” usually comes a lot quicker than a “no.” However, it’s not uncommon for them to change from a “yes” to a “no” later on as well.

10. Get better at storytelling

In order to raise funding, you need to have great numbers and compelling overall traction. But numbers are not everything. You’re there to tell a story, you’re painting a picture that roughly follows this format: the current status quo is not good enough, millions of people are struggling with a problem. You have a product that is 10 times better at solving the problem, and is, in the process, making the world slightly better.

You need their money to accelerate that progress. You’re there to convince them that you and your team are the right people to pull it off. Numbers and traction definitely help with making a decision, but they are not everything. It’s also a lot about your chemistry between you and the partner at the fund. After all, people make decisions emotionally; they just rationalize the decisions to others (and themselves) with numbers. So, being good at telling a story and convincing others to join on that vision is super important.

11. Always keep in mind that fundraising is a means to an end -and not an end in itself

Fundraising itself is not a goal of your company- that should be to build a sustainable business that solves a problem. So, treat fundraising as such, and get back to working on your business. Don’t spend any more time on fundraising then you have to.

Haris Aghadi is the founder of Meddy, a GCC-based healthtech startup that helps patients find the best doctors and book appointments with them, shares his insights from the fundraising experience.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world