What do high-context and low-context cultures mean for your business pitching? How many days should you wait for an e-mail from your Arab investor? And what should you do if you do not receive a response to your follow-ups? Part I.
- Culture ID
What do high-context and low-context cultures mean for your business pitching? How many days should you wait for an e-mail from your Arab investor? And what should you do if you do not receive a response to your follow-ups? Part I.
In Part I, we have already explained why the Arabic investor belongs to high-context culture and what this means for you. In this part, we will focus on how you can fundraise efficiently in Arab countries.
In addition to creating a pitch deck, a business model and a marketing model, Mohammed AlMajid, CEO of KAFADS, advises preparing for the negotiations:
– special deals as in discounted prices of future stocks
– data room with past contracts
– list of clients
– list of partners
– future projections and the like.
🗣 You should always participate in small talk before your business conversation. Expatica notes that 30 minutes of small talk before the actual business discussion is normal. You should not insist that your partners get down to business as quickly as possible, notes Kristina Tantsyura, managing partner of SKY Consulting Group. Don’t rush things.
🗣 Good social and family relationships are highly valued in the Middle East, so the topic lends itself well to small talk. “We are very proud to have something like this in our culture and it is very important to show your Arab partner that you are a person with strong family values,”” says Dr Alzubaidi, media manager and TV presenter.
🗣 It’s also a good habit to start a conversation with a joke, notices media manager.
🗝 You should be ready that no real negotiations in the Middle East are fleeting. Instead negotiations are conducted in a measured manner, advises Oksana Pogodaeva, a business angel and a hredtech.vc managing partner. Plan that you’ll spend more time negotiating than in the USA or UK.
🗝 Be ready that you won’t be able to set business goals right away with your partner. In the beginning of a first meeting you should spend some time talking about neutral topics and get to know each other properly. The main advice is to be calm and open to gradually proceeding to the business talk.
🗝 It is very important for Arab investors to see long-term benefits, says Mr AlMajid
Ask an investor what the next step in your communication is: should you send them a follow-up letter with important information about your project, for example? If you notice a lot of interest in you and your product, ask immediately if you can meet in person later, says Ms Pogodaeva.
In case you are pitching online, check investor’s LinkedIn profile, adds Mr AlMajid. When attending a conference it’s better to ask them for their number in order to continue talking via WhatsApp.
Founder and managing partner of Nama Ventures Mohammed Alzubi who works in MENA recommends having a clear amount in mind you’ll name to your investors during fundraising.
The average ticket size in the Arab market is 15-20% lower than in the US, Ms Pogodaeva noted. “For a young market [like the UAE] that is still emerging, a smaller ticket size is to be expected. It is important to understand this pattern: as the market expands, we expect the average ticket size to increase in the coming years,” continues Ms Pogodaeva.
💰 $50K–100K is the average ticket for an Arab investor’s first investment in a startup, as shown by Ms Bell’s data. Dr Alzubaidi and Arij Hilal, a country manager at Gen Re, have quotes similar amounts.
💰$500K is the amount that an investor from the Middle East can put into a startup if they are excited by the idea in their field of expertise, says Kristina Bell, chief investment officer at RedPad Games AG.
💰 $2–10M is the amount that a startup in the Middle East can receive if an investor has previously supported it.
Ms Pogodaeva proposed a formula to determine the amount of follow-on investment (i.e. the purchase of additional shares listed by the company) that a startup in the UAE can expect:
if X is the amount of investment in the first round, then the investment in the second round will amount to X + 20%.
As we have already mentioned, communication in high-context cultures such as Saudi Arabia or the UAE is often indirect. So you won’t hear a sharp “no”. Pay attention to the behaviour and choice of words:
✔️ If an investor comes back with detailed questions immediately or within a few days of receiving a pitch, it means they are clearly interested, explains Mr Tugin.
✖️ Conversely, a lack of any questions about your project and a refusal to close the distance between you means a “no” to your pitch, said the expert.
How can you avoid attracting unpleasant attention in the office in the Middle East? What is the best way to congratulate a colleague with a party? These and many other questions are answered in my article on corporate culture in the UAE. Click here.
The free bank account that makes life easy
Not a fan of waiting times, hidden fees, or paperwork? Us neither. Get a free N26 bank account and manage your personal and shared finances the simple way.
Cards for advertising and personal purchases
Banks complicate things, we don’t. All the necessary payment account functions reachable with a tap on your smartphone.
Send, Exchange or Accept fiat and Cryptocurrency on your personal Account or Website.
Local and international payment tools, bank transfers, cards and more
A full-featured EOS wallet for your assets
Move your money globally in 40 different currencies. All you need is an email address and the funds arrive right away.
The all-in-one digital financial platform created to reboot banking for everyone.
Pyypl (pronounced “people”) is a non-bank digital app that gives everyone access to the financial system through a smartphone. With an internationally accepted prepaid Visa, conducting transactions with Pyypl is as simple as sending a message.
