The Top 10 Questions UAE Family Offices Ask Start Up Founders.
While you may feel ready to field any question investors throw at you by a UAE Family Office, you should carefully think through and practice your responses. More often than not, it's the obvious questions founders fall down on because they think them through superficially.
1. What do your customers need and how do you know for sure?
It isn't enough to tell investors there's a need for your product; you need hard facts and real-world examples to prove it.
Often, Founders skip the "bottom-up" research with customers. For example, a couple of entrepreneurs who would spend time in the prenatal vitamin section at Whole Foods, where they would discover that women didn't like the large size of vitamin pills and the potential side effects of nausea and constipation. The founders used this bottom-up research when pitching investors on their vitamin drink product, that the company says doesn't have digestive side effects and is easy to take! When Founders are pitching UAE Family Offices, the family always look for" bottom-up research.
2. What evidence can you provide of prior business success?
Often Founders focus on the wrong things when trying to show their track record.
When discussing your background, don't tout the names of companies you've worked for or schools you've attended. You need to pinpoint specific business achievements. What products have you developed? Which major clients did you attract to your previous employers? How much revenue did you bring in? Investors are always looking for measurable evidence.
3. Who's on your team?
For many Family Offices in the UAE, a company's employees are as important as its product or service. That people part is often what gives the whole enterprise credibility. Focus on the experiences, networks and expertise your team offers. If you're a one-man-show or don't have the resources to hire anyone yet, show investors you have specific plans for attracting talent. Often, founders will point out the roles that need to be filled without identifying specific candidates and estimating how much it might cost to hire them.
4. How well do you know your competitors?
Don't try to make your business look unique by telling the family you have no competitors. If you do, the family might conclude there isn't really much of a market for your business, especially in the GCC. Instead, be specific about the companies you're up against. Showing how well you understand the competition will make you look not only smart, but also confident in taking on the challenges. This is also a good segue into talking about your competitive advantage.
5. What's your competitive advantage?
Too often, I see founders who speak in platitudes rather than specifics when talking about their competitive edge to local families in the UAE. For example, it isn't enough to tell the family your customer service is better; you need to show what makes your business different—and special. Do you keep in touch with customers through social media? Or do you offer free shipping on online orders?
6. How do you define your target market?
Be sure you can clearly identify the market segment you're targeting and explain how you'll reach it. For example, if you are selling coffee to young urban professionals, you should discuss your audience's growth potential, consumer preferences based on bottom-up and other research, and the best marketing channels.
7. What is your business most sensitive to?
To show UAE Families you really understand your company, point out potential vulnerabilities and how they might affect you. If the price of gasoline or a particular material goes up, what does that mean for your business? Identifying potential risks—and your planned responses to them--will show the family how well prepared you are to run your business.
8. What's your sales and distribution model?
Founders need to drill down into the details of their sales and distribution strategy. What distribution channels and partners do you plan to use? How long does it take to close a sale? How much does it cost to acquire a new customer? What are your key pricing metrics? Such details will help to instill confidence in the family.
9. What have you already accomplished?
Be sure to focus on your accomplishments so far, such as clients you've secured, distributors you've reached out to, new hires you are bringing on board. Founders often spend too much time talking about the story behind their product and the difficulties they went through developing their business rather than homing in on their milestones and achievements. Investment is about certainty. You want to provide certainty.
10. What do you need the money for?
UAE Families like to know their money will be used to build products [Assets], hire employees or add to the business in some other tangible way. Founders often make the mistake of talking about more general plans for the funding, such as marketing. You need to be able to show the milestones that will be achieved with this round of funding, being continuously specific on these milestones.