This SA entrepreneur just landed a R12 million investment. These are his 5 tips to secure venture capital funding.
Building a fantastic product that users love is ultimately the best way to be successful, says Greg Keal, co-founder of student housing startup DigsConnect.com.
DigsConnect.com recently received a R12 million cash injection from an undisclosed investor to expand from Cape Town to other South African cities such as Johannesburg and Potchefstroom.
DigsConnect.com has grown to just over 50,000 listings in 11 locations the past year, with 30,000 unique browsers visiting their website in January alone.
Keal says the personal relationships he and his two other co-founders have built with landlords and students have also been instrumental in their success.
“These personal relationships have allowed us to learn from them over beers at night or coffee in the morning (sometimes the other way around),” he says.
“We’re all in our early 20’s— we know we have lots to learn — so we’re obsessed with customer feedback and building something we know our users will love.”
Keal gave Business Insider his top five tips on how to secure venture capital funding for a startup.
Find an expert
DigsConnect.com made use of a expert who has worked at Deloitte in London to lead its fundraising round, Keal says. He had the connections to bring people to the table, while DigsConnect could focus on building the business.
“Fundraising takes a lot longer than you think it will, and you don’t want to stymie your startup’s growth because your attention is elsewhere," Keal says.
“Often investors want you to show what makes you special, not for you to give the perfect answers,” Keal says.
“In an early stage startup, investors are investing in the entrepreneurs more than anything else.”
Keal says the investor doesn’t have to believe in the company, they have to believe that you’re the right people to make the company a success.
Keal said they received multiple before deciding on one.
“We had some fantastic offers, but ended up with the best of the best by waiting a bit.”
Focus on user relationships
Every minute spent interacting with your users is crucial, and the most valuable use of your time during an early stage startup, Keal says.
“Often investors want to know that you have real users who actually love you!”
The nature of a startup is that you will get rejected a lot, Keal says.
“Everyone has an opinion on success, [but] build the business that makes sense to you.”
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