As a VC firm, we receive many deals every week. They come through different channels, some through LinkedIn and Twitter and some through email (personal and work). We used to ask everyone to send the pitch deck to our work email so we can manage all the pipeline from one place.
But email has many other uses! There are newsletters we receive on weekly basis, and some updates from here and there. There are also emails from other VCs, advisors, mentors, event organizers, lawyers and other service providers.
On the other hand, although our investment team is only four, but we’re in different locations and we travel a lot. So we used email a lot for internal communication. Add to that all corporate matters within the group like HR, finance, and admin stuff.
We naturally started to use WhatsApp for quick internal communications. That helped to reduce email usage a bit, and made it faster to reply to quick questions (when it’s an email there is a psychological assumption that it’s not urgent and the reply can be sent later, but for chat, it’s now by nature!). But WhatsApp created even more problems as all conversations are mixed up and there is no subject line, threads, or any way to categorize or separate discussions.
When it comes to the startups pipeline, as a new VC firm with less than 2 years of operations, we didn’t use any CRM tool. That was a mistake! We had more deals than what we can handle as a small team, and thus, we started to lose track of all the startups we met, we started to take more time than we should to reply to founders, and we couldn’t proactively follow up with all of them.
Finally, when it comes to internal projects & tasks, we also used email! Some of those emails had 10s of threads!
How We Handled Email Last Year
We used email for all of the above, and because we received too many emails every day, we needed to prioritize reply, so we used to have a folder in email named “To Follow Up” and another one named “To Act On”, a folder for every closed deal, and many other folders!
As individuals, we used 10s of online and mobile tools. But as a team, our work was revolving around:
- Email (mainly for everything),
- Skype (for calls with founders and for internal team calls),
- Evernote (for taking notes while having the calls and for knowledge management),
- Dropbox (for file storage and sharing).
We thought this would be sufficient to run a small firm.
Using SharePoint For Few Months
Mid last year, we took a decision to use more tools, and we tried Microsoft SharePoint. We kept Skype of course, but we used OneNote instead of Evernote and OneDrive instead of Dropbox.
To be honest, SharePoint has almost everything, for example I was surprised to know that they have a collaboration tool that enabled us to concurrently edit a Word or Excel file online together (like Google Docs), but access and usability was a big issue, specially that we’re used to Google Docs individually!
Researching New Tools
By the end of last year, we took the decision to abandon Microsoft and try other tools. As entrepreneurs we used many other tools and we have invested in startups that experimented with even more tools.
We considered all the following:
For Internal Communication:
For Project/Task Management
- Many others
For Knowledge Management
- Google Docs
In addition, several add-ons/apps and integrations among those tool, and integrations with email were considered
After all this, and for now, we decided to keep email and file storage on the existing Microsoft infrastructure with the corporation (Outlook and OneDrive), we also kept Skype for calls. We decided to use Slack for internal communication, and Asana for project/task management, Google Docs for knowledge management, and we’re still not decided on CRM as Asana might be enough for now. But we will eventually need to find a proper CRM that fits our needs as a VC firm.
How We Use Slack and Asana
Between Slack and Asana, and after using them for a month now, we can’t imagine our work without them! Our email accounts are finally free for mainly founders and other external partners. We even moved all newsletters and updates subscriptions to our personal email accounts.
In addition to the General and Random (which we called Fun instead of Random) channels on Slack, and the side projects and tasks on Asana, we created a Slack channel and an Asana task for every startup in our pipeline.
We started to set a due date (usually 3 weeks) to decide and get the deal out of the sourcing pipeline, I mean 3 weeks to do the basic research and analysis, meet or have calls with the founders as much as needed, finalize the main terms (amount and valuation), and decide whether we want to proceed to Due Diligence (DD) or not. Then we create a new due date for DD and closing.
In that project, we assign tasks and subtasks for each of the team members as needed, we upload the documents there (pitch deck, research reports, DD reports, etc…), and whenever we have a meeting or Skype call with the founders we add all the notes there. All our official comments for the deal are on Asana and all the discussions are on Slack. In addition, all files are kept in Sync on OneDrive as a backup.
What Do You Use? and Why?
We would love to learn more about what you use on daily basis, how you use it, and what was the thought process in selecting the tools.
Early 2009, when I started to work on my dream to become a VC, I started with seed stage investing. It seemed like a doable move at that time after working on my first startup and winning two startup awards.
I remember my first naive attempt in early 2009 to raise a seed fund to start “Beta Ventures”, which was intended to be the first Y-Combinator style accelerator in MENA region. Of course I couldn’t raise the fund at that time, and I ended up joining N2V.
By the end of year 2009 Meydan was launched in Jordan, followed by Oasis500 in 2010. At N2V we also launched an accelerator. Since then several other accelerators started to appear all over Arabia including: Egypt, UAE, Bahrain, Lebanon, KSA, etc…. Each had it’s own model, some were shut down and some pivoted once or twice and continued to survive until now. I learned a lot about seed stage investing from those accelerators since I was involved in almost all of them whether as a manager, a seed stage investor, a mentor, or an advisor.
Then I moved to investing in pre-series-A rounds when I managed the growth stage fund at N2V. At that time, I learned more about investing in the graduates of accelerators and other startups that never went to accelerators and yet made some considerable traction.
This was when I decided to become a professional VC. So I attended Harvard executive training on venture capital and then enrolled in a 2-year educational VC program at the Center for Venture Education (Kauffman Fellows Program). This helped me to learn more about VC investing in all stages, and I started to dream about becoming a Series-A VC in addition to being a seed stage VC. Not only that, I also wanted to become an international VC and invest in startups from all over the world.
All this gave me the confidence to try to raise my own fund again, this time under a new name: “Sinbad Ventures”, where I wanted to take regional Arab startups to Silicon Valley and help them go global and raise funds from US VCs. But it didn’t work too. Although I had invested is 8 local/regional startups by that time, and helped many others get funded, but it was still early for the global move. I didn’t have enough experience in taking startups global. So I ended up joining another investment company, Leap Ventures, which invested in both seed and pre series-A. I gained more experience at Leap and learned more about investing in both stages.
The dream to become an international series-A VC was postponed until only few months ago when I joined Arzan VC. Arzan VC is a new VC firm in Dubai that focuses on Series A tech startups from all over the world. Arzan VC considers startups from MENA region as well as from USA & Europe.
We are closing our first two deals now, so hopefully I will have more stories now to blog about from around the world, and will also blog about the differences in investing in different stages of startups Inshallah.
When you have to explain what you do as a venture capital (VC) firm, it definitely means that you are not in Silicon Valley (US) or for that matter in any of developed economies. Perhaps, because the VC industry has not yet set foot in the Middle East and North Africa (MENA) region and it is yet to reach the young businessman and small medium enterprises notice.
MENA region has long been seen as a hub for trade, enterprise and exploration. However, with the advancement of technology and improved regional prospects, the region is approaching a turning point for innovation and entrepreneurship. With the majority of population below 30, the economy is prepared to experience high levels of growth and increasing echelon of entrepreneurship. We will witness more and more numbers of young graduates from this region turning up to new business activities, mainly based on technology. It is also time for promoters in the region to propel their businesses to global level. Although small in size, innovative high growth technology startups are very important for economic advancement.
What I want to discuss here is that there is a need for capital to fund the ideas of young promoters which they often lack. A key barrier to entrepreneurship is the lack of capital in this region to formalize creative ideas into concrete and realistic business plans. While SMEs constitute the majority of business activity in MENA, they lack the necessary support to expand and develop. According to the World Bank, SME bank lending in the MENA accounts for less than 8% of total lending. In the Gulf Cooperation Council (GCC) states, it is dismally low at 2%. Lack of access to capital is often cited as one of the key constraints to scaling up SMEs in the region.
Yet, this gap also represents an opportunity for private equity (PE) and VC firms to provide the financial and strategic support that such firms need. Because of the lack of matured markets for corporate equity funding, the biggest challenge the region faces is the need to educate the entrepreneurs and the institutions about the nuances of equity financing. The SME segment and to an extent the large corporate houses in the region have over the years received family funding because of the concentration of business in the hands of few rich families. The public stock market is not very strong and dynamic and also the size of the majority of the companies is not large enough to be listed and together they lead to inefficient equity market. The large family businesses are run in a proprietorship model and effectively there is no contribution from their part to the financial industry.
However, the trend is changing and more and more young people are taking up entrepreneurship with innovative and problem-solving ideas. Till now the startups have mostly sought receiving early seed funds from friends, families and angel investors. The gap remains in the high growth phase of the Company, where the startups can actually grow and expand exponentially. This is a stage where the company can bloom and aspire of a global stage. However, there lies the gap for enterprises looking for Series A & Series B funding amounting between USD 500,000 to USD 10 million. This is where a strong VC market can help the startups to achieve their true potential.
I must say that the VC industry is in an exciting stage, but it also has it challenges. The VC firms are expected, in addition to providing funds, to play a more substantial role perhaps even larger than their counterparts in Silicon Valley. They have to act as advisor, mentor or consultant to the young entrepreneurs and provide strategic inputs to the startups. Entrepreneurs need strong support at every stage of the startup process, requiring a great deal of time and effort from VC firms. This is where the dynamics in MENA are different from the rest of the world & we need to strive to work together in a fruitful & organized manner.