Raising Funds: The Delicate Equation for Startups
Raising funds has become an essential step for many startups seeking growth, but behind the enthusiastic discussions about the "entrepreneurial ecosystem" lies a more complex reality where convincing investors requires both financial rigor and persuasive power.
Understanding the Investors' Expectations
Investors are refining their selection criteria, and preparing a good dossier is no longer just about compiling numbers; it's about telling a credible story, supported by evidence and profitability prospects. In Tunisia, like elsewhere, many entrepreneurs face this delicate equation. How can a promising idea be transformed into a solid and attractive dossier? What are the concrete elements that investors expect? And, above all, how can numbers and narrative be combined to create a credible and inspiring project?
Clarifying Your Situation Before Launching
According to Nejla Mejri, Associate Financial Advisor at Deloitte, the first step is to establish a clear diagnosis. "The approach will not be the same for a company raising funds for the first time or for a team that has already gone through this process," she explains. When a company is raising funds for the first time, accompaniment must be reinforced. The entrepreneur often discovers a new universe, such as negotiating with investors, legal structuring, financial transparency, and valuation, which can be overwhelming.
Preparing for the Investors' Due Diligence
This distinction is important, as it determines the level of preparation required. Newcomers will need to invest more in accompaniment, while more experienced teams can move faster. Even if these profiles are more reassuring for investors, they must still demonstrate the solidity of their current project. Nejla Mejri also emphasizes the importance of a readiness assessment, which involves measuring the company's strengths and weaknesses against the investors' often demanding criteria.
Anticipating the Investors' Expectations
Beyond numbers, it's crucial to understand how investors think. They don't just bet on ideas, but on evidence. Ghazi Saddem, a management consultant, insists, "Promises are not enough. Investors want tangible elements." Among the indicators considered decisive are the number of active customers, retention rate, customer acquisition cost (CAC), and customer lifetime value (LTV). These metrics, which have become essential in the startup universe, allow measuring the potential profitability of a project.
The Art of Telling Your Project's Story
However, numbers are not enough. The success of a fundraising campaign also depends on the ability to tell a story. "Investors want to understand why the project exists, what problem it solves, and why this team is best placed to lead it," recalls Ghazi Saddem. This is where storytelling comes in, often misunderstood. It's not about embellishing reality, but about giving meaning and coherence to the project. An effective narrative relies on three pillars: a clear medium- and long-term vision, a well-identified market opportunity, and a marked differentiation from the competition.
The Decisive Role of the Management Team
Another fundamental criterion is the management team, as investors insist that they finance both the project and the people. Nejla Mejri points out, "A good idea can fail if it's not carried by the right people. Conversely, a solid team can succeed in pivoting and adapting even if the market evolves." This is why many investors spend as much time evaluating the quality of leadership as the relevance of the project.
Transparency: A Decisive Criterion
Transparency remains a decisive criterion in the eyes of investors. Any area of dispute, unexplained debt, or excessive dependence on a single customer is perceived as a warning signal. Rather than hiding these weaknesses, experts recommend anticipating them and providing clear answers. A company that acknowledges its challenges and explains its strategy to overcome them inspires more confidence than one that tries to minimize them.
A Demanding Equation, but Within the Reach of Entrepreneurs
Raising funds is neither a stroke of luck nor a formality. It's a demanding process that relies on the solidity of numbers, the strength of evidence, and the ability to convince. Everything starts with rigorous preparation: credible financial statements, realistic valuation, and complete documentation. "It's about juggling between historical data and projections, as the strength of a Business Case relies on the solidity of historical performance projected realistically into the future," emphasizes Nejla Mejri.
Conclusion
For Ghazi Saddem, the challenge is to transform these technical elements into an inspiring story that sparks the desire to join the adventure. The growth of a company, he reminds us, is not bought with millions, but measured by the number of customers and the effectiveness of the channels used. The golden rule: a fundraising campaign must serve to accelerate a project already on the right track, not to finance a model that doesn't work. Ultimately, raising funds is about combining the science of numbers and the art of storytelling. A demanding equation, certainly, but accessible to those who prepare seriously. In Tunisia, where the entrepreneurial ecosystem is rapidly emerging, more and more founders are learning to master this equation to seduce local and international investors.
