Know these before seeking investment

Over the last few years Bangladesh has seen an increase in start-up businesses and more so during the Covid-19 pandemic. With the economy gradually recovering, experts see Bangladesh as a rich market for start-ups in many sectors. However, concerns still remain over the proper use of resources, management of funds and marketing strategies. Investors have stressed over the importance of collaboration, technological expertise, market research and thinking big for businesses to be sustainable and successful.

Organizations like Start-up Bangladesh, Anchorless Bangladesh and the Dhaka chapter of TIE provide supports, grants and investments to start-ups and one thing all three look for are good management teams as well as big ideas. Tina Jabeen, CEO and managing director of government funded project Start-up Bangladesh has stressed on the importance of collaboration and synergy in for successful start-up businesses during a JCI webinar. She said that while they source through internal networks such as their consortiums, areas such as Agri-Tech, Fin-Tech, Edu-Tech, Health-Tech and SAAS often get priority because of their potential.

TIE founder Fayaz Taher said that their organization focuses on bringing together founders and showcases their portfolios and offering mentorships to them. On the other hand, Anchorless Bangladesh looks for founders who have already executed their businesses. The organization’s founder, Rahat Ahmed reiterated that founders need ideas that are big and impactful. He also stressed the need for good soft-skills because often in Bangladesh, the lack of knowledge on e-mail etiquettes lead to a gap in communication.

All three investment experts have pointed to the same problem that entrepreneurs do not think of ideas that are sustainable and big. Moreover, while approaching the investors for funding, they suggest that start-ups have their documentation up-to date, have compliance issues sorted out as well as have a strong marketing strategy in place. Talking on marketing, both Fayaz Taher and Rahat Ahmed agreed that more often than not, the only marketing strategy the founders have in place is Facebook boosting which according to them is not efficient. They stressed on deeper market research and provide products that will encourage customers to switch products.

Rahat Ahmed said that a common scenario among Bangladeshi start-ups is that they continue doing things that do not promise growth and instead suggest not compromising on the quality of products and maintaining a positive outlook. He advised that instead of spending big money on Facebook ads, the founders have a solid vision on how to acquire a customer base that will stay. All three investment experts agreed that in order to reel investors in, the founders have potential execution plans and even if they have to pivot, they must do so in close keeping with their original ideas and not go for ideas that are short-term money fix during a pandemic. Instead, all of them advise us to do research and build a business that is resilient and sustainable. They advised the founders to start with solidifying their place in the local market rather than jumping to making it global.

Having covered the specifics on funding’s, Fayez Taher said that once the business is running, it is more important than ever to ensure that the growth is not just in terms of vision but also in terms of organization. He suggested upscaling teams as well as having an accounts person to look over the funding that founders have received. The only thing as important as management, according to him, is cash flow. He suggested that founders do not hold on to equity in order to lower the pressure on salaries during pandemics. Overall, the nearly one-hour webinar gave key points to founders on where to look for investments, how to approach investors and how to utilize that capital. The key points were to approach the various investment firms, have good business and marketing plans, contingency plans for crisis management, steady cash-flow, proper documentation and accounting and most importantly a holistic, impactful idea that will change the lives of investors.

Watch the the full webinar