What startups need to know before raising their Series B funding round

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It is very important for founders to maintain relationship with potential investors –even before fundraising for their Series B

Burda Principal Investments’ Albert Shyy (middle) and SMDV’s Mario Sentanu at the e27 Academy Jakarta Roadshow

In Indonesia, as its startup ecosystem matures, the public begins to see more and more startups raising later stage funding rounds that has pushed their valuation into beyond US$1 billion.

Even for the rest of the companies, this trend has opened up opportunities that have never been around before: More investment in later stage startups.

But in order to successfully secure a Series B funding round and beyond, there are a few things that founders need to prepare, according to Burda Principal Investments Principal Albert Shyy and SMDV Partner Mario Sentanu at the e27 Academy Jakarta Roadshow on Thursday in South Jakarta.

“When it comes to Series B, usually what we are looking for is some sort market leadership within your own segment in your country,” Shyy said.

He gave an example of Burda’s own portfolio company Carsome, who was already a market leader in Malaysia’s used car market even before their Series B round. The funding that they have raised enables them to expand their presence to other markets in Southeast Asia.

There is also an emphasis on building relationship with potential investors, even before the founders intend to fundraise.

“It’s not impossible, but it is usually harder for people who have not known you to invest in your company. This is especially true for Series B … In many cases that I know of, up to 30 to 40 per cent of the Series B investment came from the people who had known the founders since six months to one year before,” Sentanu said, stressing on the importance of building relationship for startup founders.

“Go out there and meet with people that can help you; try to get help and try to help other people,” he added.

How about exit plans? Is it necessary for founders to have their exit plan ready before fundraising for Series B?

According to Sentanu, compared to what the exit plan is, investors are more interested in understanding how founders came up with the plan.

“If you can logically explain to us your answers … it will be more important than whether you are exiting through route A, B, or C,” he said.

It takes a village

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Participants sat down at the Roundtable session to discuss the most common issues faced by entrepreneurs

Community building is also a big theme at the e27 Academy Jakarta Roadshow.

In addition to attending a workshop for Indonesian startups who aims to expand their business internationally, presented by Alpha JWC Ventures VP of Legal Florence Gracia Santoso, there was also a panel discussion on how startups can build communities to support their business.

“It’s absolutely critical for companies to be a part of a collaborative environment. This kind of environment helps you to connect to people and get things done faster,” said WeWork Community Director Eyad Zahra.

He then explained how WeWork facilities in Jakarta include companies that range from aviation giant Airbus to art initiatives run by a single entrepreneur.

Running offline events also played a crucial role in building and maintaining communities, as explained by DailySocial Partnership Specialist Gisella Soselisa.

The company routinely runs #SelasaStartup event where founders get to talk about their entrepreneurship journey.

“Offline events enable us to build trust among the communities, one-by-one,” she said.

Apart from panel discussions and workshops, e27 Academy Jakarta Roadshow also featured two round table sessions where attendees –who are mostly founders of early stage startups– get to share their concerns and questions with each other, and learning from each others’ experiences.

The topics that are being discussed are about choosing the best location for your office, where participants agreed about the merits of working in a coworking space, and managing burnout, where participants highlighted the importance for founders to have a support system in maintaining their mental health.

Held in collaboration with WeWork, the roadshow was the first of a four-city event that leads up to the e27 Academy in Batam, Indonesia, on November 28-30.

The post What startups need to know before raising their Series B funding round appeared first on e27.

Source: E27