On Sunday, September 8, 2024, Startup Grind Qatar led by Indica Amarasinghe held an event tagged “Venture Capital Unplugged: The Ecosystem & Funding Blueprint.” The aim was to discuss the role of VCs in the growth and development of the Qatar tech environment.
Recall that Qatar kicked off Web Summit’s Middle East debut by announcing a $1 billion investment to support entrepreneurs and startups in the region, under the directives of His Highness the Amir Sheikh Tamim bin Hamad Al Thani to support local and regional entrepreneurs.
In that regard, three leading venture capitalists Alexander Wiedmer (Partner, Rasmal Ventures), Michael Lints (Partner at Golden Gate Ventures) and Muhannad Taslaq (Director of Investments at Alchemist Doha) dived deep into the intricacies of startup funding and the role of ecosystems that nurture innovation at the Startup Grind Event.
During the panel discussion moderated by Salman Surti from Qatar Fintech Hub, the speakers provided invaluable insights into the VCs’ strategies to identify, invest in, and grow successful startups.
Focus of Investments
One of the key points of contention is the focus of investment. Some VCs, like Wiedmer, desire to allocate a significant portion of their funds (15-20%) to Qatari startups to provide hands-on support and foster growth. However, Lints, emphasized a broader MENA focus, supporting tech-driven and product-led companies regardless of location.
Additionally, Taslaq stated that Qatari companies go global, hence, founders needed to launch in Qatar, stay, and use that as a springboard. He mentioned how Alchemist, an equity fund that recently expanded into Qatar, plans to make an SF out of Doha, providing more opportunities for founders.
Power of Collaboration
Speaking further on the essence of collaboration Lints highlighted the significance of strong relationships with universities and accelerators in nurturing the startup ecosystem. He also stressed the importance of being transparent as mature founders always are about their discussions with other VCs to maximize deal value.
On the question of funding, Lints thinks the best source of funding any startup can get is actual revenue from their products. He said, “In Qatar, most accelerators focus on the preseed stage so it’s the founder’s responsibility to find the best ways to get capital to move the company forward.
“The best source of funding is revenue or sales. Get your most viable product (MVP) and start making revenue to get traction. If you have a great product, you will get funding. Find out the minimum you can do to get the VC’s attention and do that.”
Incubators or VCs?
According to Lints, incubators help the founders build a network with a lot of VCs and have the chance to refine their pitch and product ideas. On Wiedmer’s end, not all founders need to be a part of incubators (accelerators), especially if they (the founders) or their ideas are already mature.
Top Dos and Dont’s
Furthermore, all speakers shared their dos and don’ts for startups looking to attract VCs’ attention. Wiedmer recommended showcasing professionalism and accuracy. In his words, “VCs’ are impatient because they speak to so many startups. Don’t be inaccurate with your sources and have a professional presentation without errors.”
Lints on his part, emphasized transparency, a desire to work with a VC, and a genuine passion for the product or idea. He said, “You need to be sure you want to work with the VC. Do you do your homework/ due diligence. Keep in mind that the VC might say yes and you have to be stuck with them for a while as it usually takes 7-8 years to get to an exit. Do not lie, be transparent, don’t pretend to be someone else.”
The final speaker, Taslaq stressed the importance of having a technical co-founder and being authentic during pitches. “You need a technical cofounder and they need to have a huge share in the startup. Don’t lie and say you don’t know because Alchemist VCs are entrepreneurs and technical people. Be yourself and show everyone you are the right person to build with. Being a founder that has exited gives you an edge too,” he said.
The Qatari Government’s Invest Qatar program, introduced during the Web Summit, aims to provide comprehensive support to startups throughout their lifecycle, including visa assistance. This initiative has further fueled the debate about Qatar’s potential to become a thriving tech hub in the region.
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