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Seeing Dollar Signs: My Startup Got Funded In Dubai... And It Was Much Harder Than You'd Think Raising funds is something almost every startup has to contend with at some time. Even a successful and profitable startup needs to raise funds to grow faster than what their revenue would allow.

By Sharene Lee

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You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

Raising funds is something almost every startup has to contend with at some time. Even a successful and profitable startup needs to raise funds to grow faster than what their revenue would allow. The current climate of high valuations and large rounds has pundits screaming: "Bubble!" However, the bubble is in Silicon Valley; (un)fortunately there's no bubble in Dubai. If you're part of the startup ecosystem in here, you'll soon realize that fundraising is the bane of our existence. It's one of the three questions that gets asked each time you meet up with another startup founder:

1. "How are you?"

2. "How's business?"

3. "How's funding going?"

Suffice it to say getting funding in the region is challenging (grossly understated). Our startup, Melltoo, just closed our seed round. We have several awesome investors including TURN8, i360, WOMENA, Dubai Silicon Oasis, and a handful of angels. It took us almost eight months to close our seed round, and here are some hard lessons we learned along the way.

If you have a choice, start your fundraising journey by pitching to investors that are not crucial for your round. This gives you very necessary practice, and it allows you to mess up without losing an important investor. Fundraising is a learning process; your first pitches are going to suck, but pay close attention to the objections of the first pitches and learn what stops them from investing in you. Very often, the early feedback not only makes subsequent pitches better, it provides insight into improving your business model and insight into what different investors are looking for.

Since our first pitch (which was a semi-disaster), we've iterated at least 10 times, continually tweaking it until we got it right. We also identified the common objections investors had and worked those into our pitch. By now, there really isn't a question an investor can ask us that we don't have the answer to. Startup competitions may also be helpful in helping you fine-tune your pitch. I say "may" because there are many competitions that provide no feedback to participants so you don't actually learn from those experiences.


Seriously, would you invest in you? For those of you who are just tinkering with your startup, i.e. you actually have a full-time job and the startup is a "side" project, why would you expect someone to give you US$150K if you aren't even willing to take a pay cut to work on your startup?

Imagine someone you just met on the street asks you for $5 with the promise that he'll pay you $10 an hour later. Would you give him money? For the average investor, you are someone they just met. Why should he trust you with his money, especially at an early stage where it isn't clear whether your startup will make it? You have to earn an investor's trust and that means building a relationship over time. That also means being a professional from the beginning till the end; answer your emails in a timely manner, and learn to take negative feedback graciously. Most importantly, earning an investor's trust means growing your business from the first day you meet till the day you receive a check. That's how you build trust and credibility with investors.

We started building relationships before we even launched. This helped us because we had street credibility. People knew us from day one and saw our startup grow and evolve. Because building a peer-to-peer marketplace is extremely difficult, people doubted us at first but became believers as they saw how quickly we executed and grew. Not only that, they got to know us as people and as entrepreneurs and that goodwill pays off. Every so often we hear: "I didn't think you would last three months when we first met. But what you guys have accomplished is amazing and I told so-and-so exactly the same thing." In a small ecosystem like Dubai, word gets around quick, so be sure it's a good word.

Melltoo App


Startups gripe about investors in the region relentlessly. Somehow, they expect investors to give them money simply because they have a working product, despite having no revenue, little traction, and an unproven team. Know this: technology is cheap today. Building a product is cheap and is only the first step in a long journey to startup success. So many tech products are launched daily that nobody has ever heard of. You need to sell investors more than a live product. What is it that you're selling?

Our investors invested in us for two reasons: traction and team. We have yet to start monetizing, so revenue is non-existent. However, we know our strength lies with our strong traction and a team that executes quickly and effectively. These are the things we can prove and therefore what we emphasized. When you pitch investors, make sure you know what your strengths and weaknesses are. Focus on your strengths and be ready to explain how you will address your weaknesses. Don't waste time on peripheral things that are neither strengths nor weaknesses; you'll just bore your audience and leave insufficient time to talk about what really matters.


Your startup is worth whatever investors are willing to pay. Whatever formula you use to justify your valuation is irrelevant if investors are not willing to pay this. Go in with a ballpark figure in mind but stay flexible and reactive to market forces. We began with a certain valuation that we derived from looking at similar startups at similar stages globally. We struggled to raise money at this valuation and quickly realized that being stubborn would lead us to the wall. We went back and forth with various investors carefully until we agreed on a figure that they jumped on. Lowering our valuation brought on investors that even increased traction wouldn't have brought. Once we loosened up on valuation, it was smooth sailing. We received more interest than we were willing to entertain.

Melltoo App

Human beings feel safety in numbers, and investors are no different. A startup that already has an investor on board is much more attractive than a similar startup that doesn't. Call it the herd mentality if you like, but once you get your first term sheet, other investors are soon to follow. So focus on closing your first deal. Do your homework on your first real investors, give them everything they ask for, don't hold anything back. If they show some doubt about something, make sure you clarify it until it's crystal clear.

One of our early investors raised a doubt about our monetization strategy. We explained in some detail over a voice conversation and via email. However, in order to drive the point home, we prepared a 15-slide deck explaining our strategy in detail, including other channels we discounted, details on procedures, partners, market research done, and cost structure. While that took a long time, this investor committed soon after he received this and we were able to use this subsequently with other investors.

Don't be fooled; there are a lot of self-proclaimed investors in Dubai who are simply time-wasters. Startups deserve respect just as investors do. Do not be afraid to ask potential investors what they have invested in previously (and preferably in the last six months), and don't be surprised by those who have no answer, they are many. While there are legitimate first-time investors, they don't usually call themselves angel investors or VCs. Those who do but haven't invested in anything in the last year are wasting your time, so cut them loose, and just as an aside, owning shares in Facebook or Apple doesn't count.We wasted too much time on so-called angels and VCs who we quickly discovered don't invest in startups in Dubai. They led us on and asked for meetings and info only to disappear when we asked for a commitment.

However, don't let these people get you down. Just recognize them and move on to the real investors that are the lifeblood of our startup ecosystem. Your first investor is your most important investor because he is taking the greatest risk by being the first and potentially the only. So treat him or her like a VIP even if that ends up being the smallest cheque.

Sharene Lee

Co-founder, TAKADAO

Sharene Lee is the co-founder of TAKADAO, a Shariah-compliant takaful insurance-alternative built as a decentralized autonomous organization (DAO) on the blockchain. Previously, she was the co-founder and COO of Melltoo, a peer-to-peer transactional marketplace for second-hand items, which was acquired by fellow UAE-born startup, Cartlow, in 2022. Sharene is a serial entrepreneur with two prior exits in the analog economy and one in web2. She was born and raised in Singapore, but she lived in the United States prior to moving to the Middle East; she now lives in Riyadh. Her passions include Islamic finance and Web3; in particular, how blockchains and crypto are a fertile ground for the growth of new financial paradigms. Sharene also enjoys mentoring and working with fellow female entrepreneurs. She is a mother of seven. 

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