Basil: Sure. So, Dany, you wear two hats. You are an entrepreneur, and you're also an investor. What do you think is the right time for a startup to raise capital?
Dany: That's a great question, and one that I've given a lot of thought to, and continue to give a lot of thought to. I think that if you can seed the business yourself, as an entrepreneur, obviously, I believe you are far better off doing that. It depends what seed means. It depends what you want to get to, to seed. But let's just stick with that for a second. So if you can seed a business yourself, you are far better off. Why? Because at the concept stage, at the green field stage, the idea stage, there is so much risk, there are so many unknowns, and it's probably going to be quite diluted for . Now let's move beyond that. I think there are probably 3 or 4 stages in a business cycle that one could look to fund the development of this company. There's no order, the ideal would be to have all of them. I will describe to you, an ideal investment business has all of them. If you have a prototype, obviously you somewhat product . If you have a team, preferably not just a one-person one, you should hire probably at least a second person. Even then somewhat , or improve the risk .
Basil: Sure.
Dany: You have a product that is being used by an early adoptive community. And these only improve upon if you can have one of the three or one of the four. And the ideal, obviously, is you have revenue. So, the ideal to raise the funds as an entrepreneur is: seed it yourself, build the prototype, but again, it depends how deep one's pockets are, or how much time and money it costs to do all these things.
Basil: Right.
Dany: Build a prototype, find a team member, even if the team member isn't on board full-time with you right now, which would be ideal, if someone says, "I'm in," and that is a committed team member, who can create value and join the team, , you know a seed round or a post-seed round. And then always then if you have revenues. We seeded Bayt ourselves as founders, and when we went to raise the money from the seeds, we had already built offices, we had a product up money, we could build a CV and apply for jobs, get hired, we had revenues. They weren't very large, but we had most of these things already [inaudible 17:04] market update execute the business
About the Guest:
Dany is a successful serial entrepreneur and investor with several partial and complete exits from ventures in a variety of industries.
Dany co-founded Bayt.com, the Middle East’s largest job site; Butlers, the UAE’s largest commercial laundry company; Intercat, one of the largest catering companies in the UAE; and Peekaboo, a Dubai-based children’s play center. He currently sits on the boards of Intercat and Butlers and has also invested in multiple businesses over the years, spanning America, Europe, and the Middle East. Dany was a seed investor in Gonabit, a Middle East focused daily deal website that was acquired by Living Social in 2011.
Comment on the Interview:
When Should Startups Raise Capital
Dany Farha have a different approach on raising capital, Dany believes that startups should bootstrap and founders should seed the startup from their own money at the early stages.
