Deprecated: Using null as an array offset is deprecated, use an empty string instead in /home/u876752588/domains/capria.vc/public_html/wp-content/plugins/jet-engine/includes/components/blocks-views/dynamic-content/manager.php on line 113

I admit it, I like the number 13. I’m a non-consensus investor, as are my partners. We’re in our 13th year of institutional VC investing, now having funded, grown, and exited deals in more than 13 countries across the Global South. We learn new stuff every day, typically 7 days a week, which is one reason we do what we do. We also work hard to make good money for our LPs, who are our customers. We have built funds that rank in the top quartile (as measured by Cambridge Associates), which is not easy. We are striving to upgrade that to top decile performance over the coming years. Our partnership is among the 5 biggest investors in our own funds – we have lots of skin in the game. Many other investors can say many of these things, but not too many who invest solely in the Global South can do so.

2023: A Record-Breaking Year for IPOs

Having a little time to think on this fine Friday the 13th, I fired up ChatGPT 4o1 into “blog writing mode”. If you haven’t used it yet you should — it is an excellent research and writing partner, letting you focus on the big ideas you want to convey. Today’s topic is early-stage fundraising, which we’ve helped dozens of founders across our markets achieve successfully over our 13 years. We’ve also seen some spectacular failures, not only from rookie first-time founders but also from second-time founders and experienced investors (including ourselves – even top-performing fund managers are not immune to making mistakes, as you’ll see below). A final note before diving into this ever-hot topic: I’ve written this blog from the perspective of a current institutional VC (that’s me and my partners at Capria) advising early-stage founders, present and future. I also have been on the other side of the table as a founder and board chair VC-financed companies in the Bay Area, and one of our Venture Partners in Bangalore is currently a founder of an on-the-road-to-unicorn market leader. In my next blog, I’ll address advice from founders to VCs about both fundraising and portfolio management.

We’re Still in Fundraising Winter (Unless You’re in Deep Tech AI)

The fundraising landscape in emerging markets has changed dramatically since the funding slowdown that took hold in 2022. Institutional investors—those deploying significant capital through venture funds, not small angel checks—have become substantially more selective and cautious. The days of rapid deal flow on crazily-founder-friendly terms are largely behind us. Instead, investors now seek disciplined teams that demonstrate tangible traction, clear market positioning, and a genuine understanding of the local conditions. For first-time founders, it’s crucial to recognize that while you may be tackling unique problems with a very promising product, you’re not operating in a vacuum. Competition for capital has intensified, and the leverage you might think you have because you’re solving an “overlooked” market gap is often overstated. Your investors, especially the top-tier funds modeled after Silicon Valley leaders, are under no illusion that they must invest at any cost. They can wait until the right deal appears—one that respects their need for risk-adjusted returns and a long-term partnership. They also know that the path to liquidity and profitable exits is longer and harder in emerging markets; the smart ones invest accordingly.

At the same time, high-quality institutional investors are not looking to strong-arm you into a losing proposition. The better firms understand that emerging markets require patience, cultural sensitivity, and a willingness to navigate unique market dynamics and infrastructure hurdles. But patience does not mean charity. We and similar firms are still in the business of producing returns for our limited partners. Founders need to meet investors in the middle. You can’t rely on flair and charisma alone to secure backing. It’s about data, trust, and alignment. Founders who treat institutional investors as strategic partners rather than just check-writers set themselves apart. This is not about playing “hard to get” or believing you hold all the cards. It’s about showing that you understand the realities of the current capital environment, and the importance of building long-term, reciprocal relationships.

Below are 13 practical frameworks and considerations in several areas that matter deeply to institutional investors and founders alike. In the 60+ direct investments we’ve made across Latin America, Africa, India, and SE Asia, we’ve seen every one of these factors play out, to the benefit or detriment of both founders and investors. While adhering to any one list can never guarantee success, these recommendations draw from our own personal experiences as well as common themes in top-tier VC writings and interviews. Implementing these steps will help you approach your investor relationships with a more informed, measured perspective—one that acknowledges market realities and seeks true partnership.

Building and Maintaining a Non-Transactional Relationship With Your Investors

1. Frequent Strategic and Tactical Check-Ins: Send brief, honest updates every month (or at least every 6 weeks), even when you’re not raising. Include metrics on product usage, revenue, team growth, and any notable market insights. This shows respect for their time and continued interest in your company’s journey. When you hit meaningful milestones—a big new customer, a successful pilot, a regulatory clearance—highlight these wins with your investors. It’s not just about asking for more capital; it’s about making them feel part of the journey. Occasionally share industry reports, relevant articles, or local market data they might find useful. Position yourself as a knowledgeable partner rather than a founder who takes without giving back. This applies to current investors as well as to investors you are courting (with appropriate redactions).
2. Seek Help Beyond Capital Needs: Don’t only reach out when you need money or help with a crisis. Ask for input on hiring strategies, market expansion plans, or product rollouts. Ask for mentoring key team members; ask for help closing an on-the-fence candidate. Your investors are here to do these things and more – don’t be shy in asking. Demonstrating that you value their perspective and potential to contribute will foster trust and deeper engagement.
3. Say Thanks: If an introduction or piece of advice from an investor helped you secure a key hire or land a major client, let them know. If they make intros or help you in areas you ask and never get a follow-up, they will be less likely to do it in the future. Recognizing their positive impact encourages further engagement.

Partnering with Current Investors to Get Your Next Round Sourced and Closed

1. Signal a Future Timeline Early: Give your current investors a heads-up several months before you plan to raise again. This allows them to start preparing intros, refining your narrative, and seeding interest among their network.
2. Identify the Right Connectors & Align Narratives: Not all your existing investors will have the same caliber of networks. Ask them who they believe might be a strong lead for your next round and request specific introductions, rather than generic “help.” Ask them what concerns new investors might raise. Leverage their experience to pre-empt tough questions, refine your pitch, and bolster weak points before you head into formal talks. Get alignment early on how they will present your company to prospective backers. A uniform narrative—highlighting growth, market opportunity, and a path to profitability—avoids mixed messages.
3. Build Your Plan B Early: As an ever-optimistic founder, you will have a clear view of how Plan A should work out, bringing together a great set of new investors at a nice valuation step up from the previous round. But it does not always go that way. Be sure to work with existing investors to know what Plan B and even Plan C might look like and be sure you’re aligned on when you need to abandon Plan A. Waiting too long can cause major problems for you and your investors.
4. Be transparent; Build a Professional Data Room: Make diligence easy. Offer a well-structured data room with current KPIs, financials, and customer references. Your existing investors are more likely to introduce you if they know you’re organized and ready for scrutiny. If you hold back on providing complete information to existing investors, they are not going to recommend you to anyone – their reputation is more valuable to them than their investment in your company. Think hard about the implications of that last point.

What to Never Do to Your Current Investors

1. Don’t Blindside Them With Bad News: Hiding material issues or waiting until the last minute to disclose major setbacks breaks trust. Share challenges proactively, along with how you plan to solve them. Repeatedly failing to meet the goals you set—without adjusting your targets or strategy—creates doubts about your competence and honesty.
2. Don’t Treat Them Like ATMs: Avoid contacting them only when you need another capital injection. If you reduce the relationship to a transaction, that’s all it will ever be.

Do’s and Don’ts as You Court New Investors for Your Next Round

1. DO Research Your Targets Thoroughly: Understand each investor’s thesis, portfolio companies, and typical check size. Tell them why they are a good fit for you. Tailor your pitch so they see how you fit their model, not a generic “one-size-fits-all” approach.
2. DO Come Prepared With Market Data and Analysis: Investors in emerging markets want to see that you’ve navigated local complexities. Present concrete evidence of market demand, competitive dynamics, and any hurdles you’ve cleared. If you’re expanding to new markets, show that you are ready to do so, and that you understand the destination market dynamics and costs. Investors expect thoughtful discussion on these topics, not emotional reactions. When they challenge your assumptions — which is their job to do, even if they largely believe you — respond rationally and show you’re willing to consider new perspectives.
3. DON’T Inflate Numbers or Hide Weaknesses: Misrepresenting reality to impress a new investor backfires quickly during diligence. Transparency builds credibility; spin undermines it.
4. DON’T Play Investors Against Each Other: Some competitive tension between multiple new investors can help with terms and also reduce risk (by having backups), but blatantly pitting investors against one another by lying or exaggerating interest is short-sighted and often gets exposed. Pitting new against existing investors is a big rookie mistake as well. Your existing investors are on your team; use them to help you. Screw them at your peril.

Learning from Other’s Failures

You don’t want to be on a future list like this. Follow advice above to help ensure you’re not.

1. Stayzilla (India)
   • Context: Stayzilla, a homestay and hotel booking platform, raised early-stage funding from investors such as Matrix Partners.
   • Issues: After struggling with its business model and facing mounting losses, Stayzilla suddenly shut down operations. Founders and investors were reportedly at odds over the direction and viability of the company. Soon after, founder Yogendra Vasupal was arrested following a legal dispute with a vendor, and observers noted a breakdown in founder-investor communication and alignment. Some investors leaned in to support him, but not all.
2. Zilingo (Southeast Asia)
   • Context: Zilingo, a Singapore-based fashion tech platform, raised a large Series C round in 2019 from investors such as Sequoia Capital and Temasek.
   • Issues: In April 2022, the company suspended its CEO Ankiti Bose over alleged financial irregularities. This led to a public board dispute and deteriorated trust between founders and investors. She was ultimately fired and the company put into liquidation.
3. Airlift (Pakistan)
   • Context: Airlift, a Lahore-based quick-commerce and transportation startup, raised $85 million in a landmark Series B round in 2021 from investors including First Round Capital and Indus Valley Capital.
   • Issues: By mid-2022, the company abruptly announced it was shutting down after failing to secure a new funding round, leaving investors blindsided and questioning the company’s preparation and communication.
4. Housing.com (India)
   • Context: Housing.com, a real estate platform, raised multiple rounds (Series A to C) from investors including SoftBank and Nexus Venture Partners.
   • Issues: In 2015, the founder and CEO Rahul Yadav clashed publicly with investors and board members, eventually getting fired. The very public fallout strained relationships and damaged investor confidence.

Conclusion

Seeing current investors as partners rather than mere capital providers can reshape the dynamic of your entire operation. These are people who chose to back your venture when the outcome was uncertain and the risks were high. By continuing to involve them beyond the transaction, you build a foundation of trust. They have a vested interest in your success because the fortunes of their fund, their reputation, and their personal pride are tied to your outcomes. Recognize that these investors arrived at the table not just for returns, but because they saw something in your mission, your team, and your approach that made them believe.

When you treat your current investors like part of the team, you invite them to share insights, expertise, and networks. They can become sounding boards for critical decisions and help refine your strategy. They often have pattern recognition from working with multiple companies and can spot red flags or missed opportunities well before you see them. By making them part of the conversation, you strengthen their commitment to your long-term plans. This creates an environment where investors are more likely to go to bat for you, whether that means stepping in to help secure a big client, smoothing over financing challenges, or stepping up introductions to new customers or partners.

The flip side is treating your investors as outsiders to be managed, or as hurdles to be cleared. That approach drains goodwill and erodes trust, on the best of days. If your communication is patchy, your reporting unclear or non-transparent, and/or your attitude dismissive, investors may check out or, worse, grow skeptical of every claim you make. They won’t be inclined to offer help if they feel shut out. The next time you need advice, a strategic introduction, or support to close a new round, you’ll find them less responsive. While that might not appear to matter when the market is frothy and everyone is piling into deals, in leaner times it can be devastating. And every market goes through cycles; investors have long memories. Whether you’re ironing out a product pivot, grappling with a tough hire, or negotiating terms for the next round, losing that support network can put your entire venture at risk.