#553 Raising Capital Without Illusions: Daniel Nikic on Global Investing and Founder Mistakes

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Mehmet: Hello and welcome back to a new episode of the CTO Show Mead today. I'm very pleased joining me, Daniel, Nikic, and Daniel, the way I love to do it is I keep it to my guests to introduce themselves. Um, you know, so feel free to, [00:01:00] you know, tell us more about you, your background, your journey, what you're currently up to.

We're gonna this, this like, uh, very important topics I would believe related, you know, to, uh, global markets opportunities. Uh, due diligence. So without further ado, I'll keep it to you. The floor is yours. 

Daniel: Well, thanks for having me Meme. It's a pleasure to be on this show. I am, to give you a little bit background about myself, I'm currently based in Croatia, but originally I'm born and raised in Canada and hence my last teammate's quite unique.

Um, my parents are from Bosnia, Heina, so I was always interested in international, uh, markets of what's going on in the world. I guess the immigrant thing. And, uh, my background has always been in business, like in university. I finished in business administration at Brock University, which is in St.

Catherine's near Niagara Falls, for those who don't know, but the parallel of Niagara Falls, it's a [00:02:00] big, uh, landmark tourist destination in Canada. And I moved to Croatia in 2009, first to see how Europe was, and also you're young. I was 21 years old. I wanted to see the experience and I would say throughout all my work experience dealing with market research and financial analysis, the best way to know something's right is doing it yourself.

You have to go with your gut feeling, and this is why I'm bringing up this story. And I worked in management consulting, real estate development. With my own company, cos, which I established in 2014, which stands for coherent Research. Pretty simple. I worked with international entrepreneurs from Japan all the way to Canada, and I also worked with investors in interested in global markets.

And I would say this to begin with, the one thing I would say about myself and that I learned from successful people is being able to adapt [00:03:00] to different situations. Great and sticking to your gut. That'll be one thing I would definitely state in the beginning. 

Mehmet: Great. And thank you again, Daniel, for being here with me today.

Now, you know, I gotta start, you know, from, from little bit of the work that you have done. So you've analyzed more than 15,000 companies across us, Europe, and Middle East. Um, what like, kind of patterns did you start to see after the first few thousands? I would say. 

Daniel: One thing I notice after analyzing a few thousand is usually companies that I've analyzed that go from seed stage for, for those who don't, uh, really know what seed stage is, that's usually when a company's a bit pre-revenue or just a bit to see some revenue.

And going to post series eight, it's usually the founder and the team. Are passionate about the idea, but also they can deal with the stress and being [00:04:00] able to control your emotions. It seems pretty interpersonal skillset, but it's very important in business and a lot of companies go with the trends. So we saw before in the 2000 tens, it was the SaaS then post, I would say COVID and after we see a lot of AI popping up.

And one thing I would state that a lot of companies and founders that know how to deal with, uh, finances and know their market seem to be quite successful. And you, they have to. In their company is gonna be successful. You have to have self-belief. It seems simple, but it's true.

Mehmet: Yeah. Uh, Daniel, um, so, you know, this is very important, uh, what, what you just mentioned, especially about, you know, the work with the, with the, with the, the entrepreneurs. So. If I [00:05:00] want to ask you also based on, on this experience, because you look at different geographies, right? Uh, so worldwide.

So from your perspective, like your worldview, what do you think like, uh, made you decide on it the most? I mean, shape it the most? Is it the geography industries or is it just the human psychology? Uh. 

Daniel: That's a good question. I tend to think that if a service, let's just say established in a certain country, it's usually due to the main industries that are in the country, or it's the main problem in that country that's dealing with, and then they want to make it global.

I think geography has a big impact on the success of a company in a way too. 'cause we see a lot of service. They could be established in as a bajan. It can be whatever, Ukraine, et cetera. They tend to want to go to North [00:06:00] America, or in some cases they want to go Dubai, for example. It's becoming more and more popular in the past two years.

Mehmet: Right. 

Daniel: And I think social culture factors is important to know how to do business. Americans are very more businesslike, they're more salesy. It's, it's good. Average sales leads to money, right? Europe is very r and d. Research and development. They're very passionate about the research, the development. And one thing I noticed about, which is very interesting that I've noticed the past two years about the Middle East is a city Arabia, Qatar, UAE.

They're very interested to learn a bit what's going on in Europe and North America and how to learn from those mistakes. We see that the government initiatives are coming from Saudi Arabia, UAE, and Qatar to improve entrepreneurship and push ai. And I see [00:07:00] what they're doing is very good, is making people coming from outside of those countries to feel welcome.

Like I've been to Saudi Arabia, I've been to Qatar, I've been to UAE. And people have asked me, 'cause I'm born in Canada, been to Bosnia, Europe, all that. And they ask me, where do you think is the best hospitality? I say Middle East. Mm-hmm. I have like, it is a diamond, a uncut check. Especially Saudi Arabia, I would say too.

Hence what's going on with the city Vision 2030. Mm-hmm. But nothing's for free and I think sometimes people take that. Wrongfully. They think, oh, if I was start, if a country has a lot of capital, there's a law of investor, oh, they're gonna invest in me. No, you have to look at it. If you're gonna get investment, it's like a loan from a bank.

They need a return on their investment. But industries are very important too, to go back from what you're seeing in big geography. It's usually problems are going on. We saw what's going on with Ukraine and Russia. Mm-hmm. I remember working with a investor, I'm like, let's [00:08:00] look into AgTech. They're like, why?

Hence grain, hence fertilizers. Those are big industries in those countries that's gonna get pushed. And we saw, unfortunately with divorce, a lot of companies that deal with defense. 

Mehmet: Daniel, you mentioned something which stopped me and um. You know, it's not only in the investment part, I think, but you know, I would like to hear your opinion from investment point of view.

So you mentioned about the kind of misconceptions that happens now and you mentioned the Middle East, right? So, so as an example, and you mentioned like you know, the expectation now, do you think. Eh, is it like cultural effect that, you know, because you said like people, they think, yeah, there's a lot of money, it's gonna be easy.

And you know, like personally, I was approached by a lot of both VCs founders that they say, Hey, like you, it looks like, let's say Saudi ue, they have [00:09:00] a lot of money. You want to come. And my answer was like, yeah, you can come but don't expect things to move fast. Now is this misconception. Related because our region, which is where I'm living, the Middle East, I'm, I'm based in Dubai, as you know, everyone knows, uh, so is it because it's faster in other geographies?

Or is it like the conception that we have a lot of money, that means we can spend the money very fast. What's causing, you know, really this misconception for both founders and investors alike? 

Daniel: I think it's media perception. People see on the news, oh, city Arabia is investing this much money in America. Oh, we see like the tourism effect, the Saudi vision, the line, and the yeoman, et cetera.

And. One thing that I've noticed being in Dubai several times in Saudi Arabia, you have to bring something that they need. Everybody wants money. Who wouldn't? Like everyone's asking for money. I need money. Everyone's [00:10:00] asking, Hey, can you buy service from me? But what are you doing for them to be like, wow, this really sticks out.

I wanna work with them. And you have to respect the cultural factors. Not every, some people say if you're from, I'll use Canada 'cause I'm Canadian. You can't take like business done the same way instead Arabia as, as in Canada. It's a different process. You have to build a trust. That's why they're very hospitable.

I noticed. But you have to build trust, which is I understand in some ways too. And it's so, it's not just, Hey, you could do business with someone. Oh, forget about it, da da da. No, you're, you're investing in someone. It's, you have to know the person. You have to know how to deal with stress and stuff. And another thing I know is talking to a lot of investors, family officers, uh, placement agents and high net worth individuals in the region of the Middle East.

They say to me, if you want to be get investment stuff, you have to invest in the country itself too. That's a big change. I think a lot of people have noticed in the past few [00:11:00] years, they want investments in their country. It's not just, hey, right, we're gonna have a fund. In Dubai. Oh yeah, we're gonna invest in Croatia, Bulgaria, Czech, Czech Republic.

No, it doesn't work that way. And I definitely noticed it in Saudi Arabia. A lot of, uh, people have told me, yeah, we invested out. But look, all the products we have going on in our country, from tourism, from construction, et cetera, we wanna see people invest in our country too. 

Mehmet: Right. And just to add to what you mentioned, Daniel, the priority.

And because we know that the big money is with, uh, sovereign funds, right? Managed by, by government. So the priority, and I know it from a lot of my network, of course, the money to stay in, but also like to create jobs for. The population living here. So, so the locals and, you know, um, create more jobs into the economy.

So this is what's the number one [00:12:00] priority always is. And it's, it's, uh, part of what I think, in my humble opinion, some people, you know, they miss like, yeah, we're gonna take the money and go. Uh, so, so this is like number one. The second thing you mentioned about it is the. Culture. Some people they see it slowness.

I, um, I start to see signs that things are speeding up a little bit compared like, let's say to 15, 20 years ago. But still, I think, you know, there's, there's work to be done now as someone who specialized, um, Daniel in, in, in uncovering market opportunities. Um. So what, what do you think, and when it comes especially to, to emerging markets, uh, what are like some of, I would call them like non-obvious indicators you always look for 

Daniel: in terms of doing investment research, I usually look at, say if it's the founders, some investors, they wanna make sure that it's not a first time entrepreneur, that's a serial [00:13:00] entrepreneur.

Hence, can they deal with stress? They look at the team, but it's usually what's the problem, what's solution and is it a solution that is innovative or is it just a copycat approach that's important and what's the market? Is the market growing or is it dying market? Like let's be realistic. No one's gonna invest in right now some, a company that's dealing with postage.

Because people don't use the old school mail, so it'll be like it's a dying market, but they'll be like, Hey, we're dealing with something that deals with AI search engines, or it could be mental health, or et cetera. It's like, okay, is it a growing market? And it's interesting, this one investor, this is back like 10 years ago, said to me, I like to invest in companies that are in the market that I know in five to 10 years it's still gonna exist and grow.

That's one thing I think is very important. And it depends on the stage. Sometimes they're like, what's your traction? If it's a company that's been there for five years, do you have [00:14:00] traction? In other words, do you have revenue and stuff? So finances, team market are important, but people like to work with people that they somewhat like do not have to be best friends.

But if you don't like someone, you're not gonna invest in. Right. Let's be realistic, 

Mehmet: Daniel, like, um, because you know, you, you, you, you, you, you help other investors also as well, right? And, um, so there is a mistake I've seen and I want your humble, you know, view on this, I would say, and your expertise at the same time.

Um, what's your take on founders, especially in the tech, you know, of course talk about tech founders. Uh, especially in our region, I can't blame them because it's something considerably new, right? Like going out, raising money. I'm not saying like it's completely new, zero. No, of course we had like successful, uh, fundraising grounds and everything, but I've seen founders, they mix up the thing, so they target high net worth individuals.

They target family offices, they target [00:15:00] VCs. They try to target angel investors at the same time, and what they end up with is like they're, when they go pitch, and I've seen it myself, so their check sizes are wrong, and the measurements that are, let's say the, the traction and the other numbers you just mentioned, they're all put in the wrong way.

So if you would. If, if someone comes now to you, especially from emerging market, and that could be Middle East, that could be, you know, anything in the emerging market, what do you tell them? Advise them to which kind of investors they should really target, especially in the early stages. Maybe they have some traction, maybe they have some, some, you know, Lois, that they call them letter of intents.

Maybe they have some, some pipeline. Who are the right, uh, folks to go to, to start tracing and is it healthy to mix and match the way they are doing it today? 

Daniel: No good question. I think if you're a pre-seed, so if you're a company that doesn't have revenue, you should be [00:16:00] focusing on investors such as incubators, sellers, 'cause they can help you grow or with your, with your product if it's not fully completed.

And target angel investors. But you should look, if you're gonna target an investor, what did they invest in already? They're not gonna invest in a competitor of their portfolio. You have to be understand. If they were invest in a company, very rarely they're gonna invest in you. If you are a competitor to a portfolio company, they already made a bet with that company.

They're not gonna bet on you too. And another thing is, if you're gonna deal with failing offices, they usually invest in the fund VC funds, but sometimes they're starting to invest directly. You have to look at their portfolio and the investment stages. So you have to do your research too. And see, okay, are they interested in the industry that I'm in?

A lot of investors make that a law service, make that mistake. And when looking at investors, they shouldn't just look at [00:17:00] money. They should look like, are they gonna help me grow? Are they gonna help me enter new markets? Can they mentor me If you're just looking for money? I think that's probably later stage.

Not really the early stage due to the fact you need an angel investor to help you get to the next stage. So it's probably good to go with the angel vest if you're very early, but if you're still developing your product and you're not a hundred percent go with the incubator accelerator, yeah, they might not give you the huge, the check size, but they can provide you the tools that cost money to get a finished product, and then you can raise it in a few months later.

So I would look at the investment stage that the investor looks invest in. Geography's obviously important too. 'cause sometimes I see startups, they wanna target certain geographies and the person's like, I'm not interested in Europe. If they're a fund outta of Boston. 

Mehmet: Mm-hmm. 

Daniel: And they have to look at their portfolio.

Have they already invested in a company that's in their industry that they consider [00:18:00] a comp competitor? Why would you invest in a competitor? It doesn't make sense. Unless you're willing to. Very rarely. Very rarely. That's what I've seen, like a direct competitor. Like if someone invested in, I'm gonna use, this is the nineties, but Yahoo, they're not gonna invest in Google too at the same time.

They'll probably course for sell then. And you have to pitch it to them that they can understand it. Very simple. I always say approach it like you would to a nine. Yearold. Make it simple. Then if they wanna know details, then you go into details. Keep it simple. It's difficult. 'cause if you're in tech, you're passionate, you're talking about, look at all this, the model I built, da, da, da.

Make it simple. What are you building? What problem are you solving? Two sentences. Simple. Then go into details. You have to grasp their attention. You don't wanna lose their attention by saying, I built this model, using this technology, this API, da, da, da. [00:19:00] 'cause a lot of these time. These people who are investors, they get pitched thousands of startups a year.

Make it simple, capture their attention, then move step by step. You don't expect it on the first call to get an investment. It takes time. 

Mehmet: Check sizes, Daniel, like very quickly. If, if, you know? Yeah, I, I know like there's no one size fits all. I'm aware of this, but I mean, uh, do you think like, sometimes, you know, uh, because I've seen this when, when people comes from the US or Europe and they say we're raising our, let's say our seed round, our pre-series A, you know, mainly I would focus on the early stages, right?

Because late stages we go, we go like big, we go like eight figures. And so on. Um, do you think the check sizes are also misunderstood? Sometimes in a sense that what could be an angel investment of a hundred K, 250 k normal in the [00:20:00] us It's not the normal, let's say in, in, in emerging market. Same for the seed round, so a seed round.

It's very normal to have a seed round of 5, 7, 8, even $10 million in the us, but we don't see the seed in our region. So what you can also advise on, on, on specifically, not the exact check size, but the ranges on a high level. 

Daniel: That's a great statement. 'cause I've seen it firsthand. I've seen companies that have no revenue rate, millions that have, uh, let's just say eight digit valuation.

And this is prior to, uh, the big open ai, AI explosion. Mm-hmm. Just because they're based in the states. And in some ways people could say it's unfair. Well, sadly, life's unfair. We can all go into details. Right. But yeah. I think you have to, sometimes you can be like, Hey, I'm raising this money. You have to back up what you're gonna [00:21:00] use the funds for.

You can't be like, I'm raising a million dollars because I needed this. Okay, what are you gonna use a million dollars for? Oh, I have, I'm gonna use a million dollars, uh, 500 to grow the company and 500 k for me and a team, da, da, da. Okay. Uh, how many more people are you gonna hire? Oh, you're gonna give yourself a large paycheck of 250 K like you have to.

Understand what the investor perspective is. So when saying you have to also know CS A is a lot different in the States than it is in Europe, than is in the Middle East. My opinion is when you're investing just be like, Hey, I'm investing this much. It's the early stage investment. That's the safest. 'cause if you say pre-seed, they'd be like, oh, we only invest in Cs, but this investment is this within your scope.

Sometimes it can vary 'cause. Like it or not, you could say I'm from, I have a great manufacturing AI company of Istanbul. I want to enter American company. I wanna get the same investment as a company based in Miami. No, it's not gonna happen unless you have a really good [00:22:00] traction and you got, uh, you're gonna be uh, unicorn very quickly.

There is that outliers. 'cause there's a lot of interesting companies that are founded outside of states that have changed. The American market too. So we have to take that into perspective. But you're right, you can't think that, say a pres precede amount in San Francisco is, let's just say 60 K for example, and they only got 10% equity.

These investors, you can't compare it, compare to other countries. It's unrealistic. Sadly, it is what is why, because a lot of financial capital is in estates. We like it or not vc. Was started in the States and et cetera. And location does matter because a lot of companies, if they want to be international, they try to enter the American, uh, market, right?

That's just how it is. But overall, if I was in a startup, I would be like, this is how much I need to invest. Why back it up? Back it up. You [00:23:00] have to make sure, have a financial model, da da da. And I probably learned this from my real estate development, uh, days. I would always do optimistic, pessimistic, realistic.

Mehmet: Mm-hmm. 

Daniel: You can go with optimistic 'cause they're gonna cut you down. That's just how it is. They're gonna probably cut you down a bit. Oh, we'll invest this much, but we want a bit more equity. They're never gonna give the equity one for one what you want. That's rarely, you rarely get what you want On the first deal, there's a saying, this one investor said.

Both side has to be unhappy then, you know, it's a good deal. 

Mehmet: Yeah. The term she used to, to piss off both, both parties. They say sometimes. Um, Daniel, like I, I want to shift a little bit gears, you know, to to, to your work with the investors actually now. E every single article book I read, you know, like they say, an investor, they regret not their, you know, the wrong decision they made.

They, they regret the great company that didn't invest [00:24:00] in. Right. Yeah. Do you still see a lot of investors making this, you know, um, old fashioned frameworks that they. Try to keep following to, to, um, to, to, to judge like if this is a good investment or not. Does really numbers here really hear, hear, help? Is it gut feeling?

Because, you know, I was having a conversation the other day with someone and you know, he, he's saying like. Especially now with the ai, like making these differentiations is very hard and, you know, running the same framework that we used to do before. Like, yeah, like let's check the team, let's check the solution, the problem, market size, all this.

But sometimes like, you know, you don't have all the time to do this and actually you miss, so in these days, what, what's working for investors not to miss, of course, as much as they can. 

Daniel: I think some investors, and I've worked with a lot of them, [00:25:00] um. They have like their own AI model. So they audit the data to train like an AI model, to scrape some stuff.

'cause the analyst and associate, depending on the bandwidth of the fund, probably is gonna catch each one. And not every managing partner is gonna look at every single company. 'cause sometimes they, someone contact somebody here, but they send it to their associate principal. Hey, look into this. Do you think it's noteworthy?

Yes. Let's go on. And you mentioned ai, a lot of investors, they. It is kind of the same fear of missing out fomo. They use that and they hear one of their partner funds, so that could be a fund that invests prior to them in the stage. So say if they're Series A, they have a Cs H partner fund that, uh, invest companies and they invest after them.

And then there's a post stages investors that follow in after them, they usually follow with them. But I've heard a lot of 'em had AI mouths or it's a word of mouth and one. Some investors, they're just do it the old fashioned way. With ai, [00:26:00] you hear a lot of companies like they're getting really big valuations.

They don't have revenue, they don't even have a product available. It's just their team. We've seen it with some people from open AI and stuff, and it's a big bet. And when you see governments investing in these companies, and so wealth funds not, it's not saying values, I'm saying from other countries too, and I would say this.

A you gotta go get, and some usually, if they're investing companies like that, it's because of the vest. The founder or management team came from a big company. It could be Google, OpenAI, meta, and et cetera. And they trust 'em based on their expertise and experience. Oh, they're gonna build something big again.

And it's interesting, I believe Mark Zuckerberg said this for a minute. He's like, I don't know if I'll build anything as good as Facebook. That's why I'm so passionate about Facebook. I'm paraphrasing a bit. And sometimes it's a risk too. 'cause it could be that they're going into another industry or another, uh, sector that they're not, they're not as confident in.[00:27:00] 

But I think that's usually the case that a lot of investors are going with. They hear this, they look at the team, the management, oh it's a good idea. They have great experience, let's go with them. But it's, times have changed definitely. And I think it is also teams are changing. So you're no longer seeing, uh, series A startup with 10 employees.

Sometimes they're three now 'cause they're using technology and it could be good and bad, even funds. I'm an investment research industry. I've seen how my industry has changed rapidly and we see with consulting less, unless there's need to market research, there is a need to audit the AI and do the insight re uh, to research.

But that's usually comes with the experience and expertise. And we see there's a big change. A law funds are like, yeah, we've got a partner and we have one associate, and they're not looking to really invest too much or they do it in-house. Right. And. I think it's mostly network, who they know. And [00:28:00] I'm gonna be very open.

A lot of startups, they're gonna have to generate the revenue quick with the money or get a bank loan and then you're gonna get the attention. 'cause usually if you're a successful startup, you'll need to reach out to investors, they'll come to you 'cause they want to get a bit nice ROI

Mehmet: do you think? You know, build it and they will follow or they will come, will be more relevant. 

Daniel: It depends on your situation. If you can fund it yourself and you don't have a network, sometimes that's the best case and they'll hear about you. Or if you don't have the funds to do it yourself, you're gonna have to reach out.

It just, it depends on your situation and depends on your team. But if you have a, a success and being part of a team that's got investment, save your purpose startup and got investors in. You have a good relationship with those previous investors. That's a big gateway. Yes. Because those investors [00:29:00] can open doors to other investors, even if they're not interested, be like, Hey, I know, uh, fund.

And that opens doors to, and that's how a lot of startups get investments too. So that's one way to look at it. And incubators, Aries, they get so many pitches too. And at the end of the day, you have to, I think sometimes startups, they try to be perfectionist. You have to be realistic. A, if you get stage one of your product out, stage two and three, it'll probably happen.

If you have a really good idea and you know how you wanna do the stage two and three to make your final product amazing, sometimes you have to go that way too, because if you look at all these big companies, they all adapted or pivoted a bit. Look at Amazon started as a online reseller, books. And now I've got AWS.

You look at meta, you look at all these companies, even like, I'll take Facebook. I remember when I came out, I was in university, it was totally different. You have to have a university [00:30:00] email data and then explain it globally. It went step by step, 

Mehmet: right? 

Daniel: And sometimes you have to go step by step, not go right away.

I'm gonna reach for stars. And I will say this one thing, it was a prominent international businessman. And Dubai. I had a meeting with them back in April and they said to me, the problem is with lot of startups, they think they can compete with the big companies, the big like Qualcomm or whatever. Usually they should look to work with them, see what they're missing and see if they can use their product and build a relationship slowly.

'cause a lot of investors, if you're looking, if you're a startup, you have to look at an exit plan. They're not gonna, and just investing, you'd be like, oh, we're gonna leave our money here with Paul for the next 20 years. No, they won't return on their investment. It could be in three to five years. Or they're gonna look for a secondary fund.

So for those who don't know, a secondary funds a fund that buys shares from a already present investor and get out. [00:31:00] 

Mehmet: This is an important point. Uh, again, uh, I'm on the founder side, guys like, don't get me wrong. But, uh, one other thing I've seen Daniel, especially related to what you just mentioned, um, the.

The kind of, uh, creating this FOMO effect to investors, right? And coming and acting. As, you know, if you don't invest today, the world will end for you and just. Fun factor. And it wasn't related to, to this episode. Like I, I work in sales also as well and always, you know, and I've actually, I was inspired by a post that appeared in, in front of, of, of, uh, of me the other day on LinkedIn.

It's round related to sales that usually like urgency kills deals in sales. And sometimes I've seen it also happening, uh, when it comes to fundraising because the founders at some stage might look desperate. Little bit. And, [00:32:00] you know, this will break the trust. So my question to you, Daniel, on average, I know in the US things can happen faster, but in, in our region and maybe the broader emerging market, what's a fair time?

I would say to, to really build the trust, build the relationship. And close your round between, you know, first meetings until you have all the money needed. So you can say, we closed the round now 

Daniel: without putting 60 to 90 days. 60 to 90 days if you have everything prepared in your professional, because if they're gonna keep on asking and it, the fund is funded.

So I've been on the startup side, I've been on the investor side on both sides. Some VCs say they had this money. You have to double check. Have they invested recently? Do they actually have the money? Because they say, oh, we're a 1 million [00:33:00] fund. When did they raise, da, da, da? And take into consideration, VCs are kind of like a startup.

They have to answer to limited partners. So those who invested in no. So it's a domino effect. The top would be probably the pension funds, the family offices, or the high net worth individuals. So it's kind of like a triangle in the way of the pyramid of startup investment. And I think 60 to 90 day is quite realistic.

If you have everything prepared. And I will say this, it's tough to be an entrepreneur and founder. I am one. I'm. Working on a project to, to, and I'm not looking to get funding from MEA 'cause I know how it is. It's difficult. You have to prove yourself in a way. And I think it's easier for entrepreneurs to work with other entrepreneurs who are investors, why they understand the process.

Being an entrepreneur and a startup is extremely stressful. It's, it's a [00:34:00] volatile, it's a 24 7 job. Like, I know I have kids, like when you're with your kids, you're still thinking about work somewhat if you're an entrepreneur, did. It's just how it is. And you can't think like a nine to five, you, you can't think of your corporate, oh, I can go home and relax.

Oh, I'll deal with it on Mondays morning. No, you can't. You're dealing with it on the weekend, you're dealing with on your holidays and stuff. And I think one thing that's really important when dealing with someone is kind of having empathy and understanding what the other person's going through. So.

Startups have to also understand what's in the best interest of these investors. Kind of like play like you remember the old show Colombo? Ask the questions to see what's going on. Ask the investor what they're interested in, what, what antagonism. Do your research and yeah, do not, I know it sucks, but you have to somewhat be expect the worst.

When you expect the worst and you get something good, you're jolly. You're like, oh, this is amazing. But if you have unrealistic [00:35:00] expectations, it's tough. Sometimes you can have pessimistic expectations and it doesn't go that way. It becomes worse. That's just how it is. There is no perfect days being an entrepreneur that does not exist.

If you're gonna take risks, you gotta deal with stress, and you have to be able to be calm and accept criticism. When dealing with investors. Do not think you are the biggest thing. Be calm, be respectful, and be confident and be prepared for the worst questions. Be prepared for them to insult, be prepared for them to be like, oh, what's this?

What this? And pause. Think about when you're gonna answer if it's something that cuts you off guard. 'cause they're gonna ask you those as they say in baseball. Those hardball questions. That's just how it's. 

Mehmet: When you say be getting prepared, Daniel, just, you know, if you allow me like to, to open it a little bit.

So, so, you know, uh, we talk about, uh, data rooms. So you need like to have your data [00:36:00] room cleaned up so you have your paperwork, you have, if you have some transactions that should, you know, reflect your financials, uh, your legal, um, of course your pitch stack. Of course, like, uh, must have first thing first.

Um. So when you reach out to, to, to investors, like you don't just actually if, if you're not ready, probably they, correct me if I'm wrong, Daniel, if they feel like you're not ready and you're kind like, yeah, let me work on it. Let me prepare that. So probably not all VCs are like, uh, tolerant in this and having time.

So they need to, they need you to be prepared, come to them prepared. I think. One of the things that I noticed personally, Daniel, that this part is still work in progress, at least for us here in the emerging market. I mean, uh, for founders because they think, Hey, I'm raising safe note. Um, you know, like, let's say $5 million, uh, um, I'm sorry, like $500,000, 5 million cap, 20% discount.

So they just [00:37:00] copy paste. The terms and they flash out the emails to all the investors that they found in a database or something. And then if someone reply them, they'll start like, okay, do you have a data room? Do you have this? Do you have that? And I've seen it like nothing over there how much, you know, education still we need to do.

And I know like some founders, they, they, they get sensible of this and I understand them. There were some. Unfortunately, especially here, I, I heard a lot about things in Dubai where people, like, they said, yeah, we're gonna help you in this. We're gonna like do this, we gotta do that. And then they. You know, they took money and they disappeared.

I, I, I get you guys, but still that doesn't mean that there is like real experts that they need to guide you. But I want to ask you Daniel, like if founders like, are a little bit more technical, they are like developing the product. Um, they don't have this experience who, how they, how they can learn it or they should bring someone [00:38:00] with them to, to, to help them on, on the fundraising journey.

Daniel: I would say this, you don't have the, if you don't wanna bring someone in the fundraising journey, that's up to them. I always say everyone has the right to choose what they want. They should think like this. Make the data room as simple as possible. That I say that anyone who doesn't even understand it coming can go through it.

They don't need you to explain it. And I think for tech people, they understand it heads, they deal with coding, so they have to break it down, uh, lines and stuff for coding. So I would say this. Break it down into a few folders. If you want a data room, you could put on Google Drive, whatever for the time sake.

And then if someone's interested, I would put organization, so that's incorporation documents. Then I would do finances, your statements and your financial malls. Third would be the operations, how the company's operating, any contracts and et cetera, for it to be the product. And r and d. Fifth could be sales and then you [00:39:00] got marketing, et cetera, depending on the company and make it, organize it and update it routinely so when someone asks it, oh yeah, here's a data room.

When you do that like that, they're like, wow, this person's, I know. I've seen it on investor side. They're like, wow, this is good. And those companies I've seen just basic organization and communication are usually the ones that succeed in, I've seen company. That did that. They had, I think I'm not mistaken, there were 600 K annual revenue and they got bought for like 10 digits.

Hmm. And they were so organized, they were so easy to work with. And if you're easy to work with, investors would like to work with you more. Be prepared before you pitch. Prepare this, oh, you need this. And if they ask for a deck, have a deck. It could be a small one, it could be a big one. And have like a quick two pager or a one pager, because if they're dealing with something, they're not gonna go through your whole 26 page deck.

They're gonna want, okay, [00:40:00] pitch to me in like a bit. So they have to have it, make it simple. That's why I say make it simple. So you make it easy for them to understand what you're doing and that it's easy to communicate with you. 

Mehmet: Right. Um, one other thing I want to ask you, uh, Daniel about is also related to the investors themselves.

So what we tell founders to go and search for smart money, right. Um, of course. An ultimate scenario, they should go search about this investor and try to see maybe their track, their first, if they are a vc, their portfolio companies, like who are the partners there, like their, their history and so on. But.

What other things you know would make this investment smart money for the founders?[00:41:00] 

Daniel: If they can see, if the investor has a big network, if they can see, they can open markets for them. Like say if you're based in Major Spain and you wanna enter American market and you're talking to an investor and you have an investor from Europe and an investor from the states. And the one in states can connect you with companies in St.

Louis, Kansas City and et cetera. You're probably gonna go with the American one if you want to enter the American market, right? Mm-hmm. So look at their location does matter. Just look for a startup. We're talking about loca, uh, startup, uh, location. It matters also for investment. And do they have a presence in that market?

Because it could be based in Dubai, but they have a big network in a state, so that matters too. So I would say their network. And expertise. What's their background? Are they just, uh, I don't wanna sound rude, but someone who just inherited their money from family, or did they [00:42:00] have an exit in the company and they're investing the money that they exited to other, uh, companies to build their portfolio of wealth?

So I think experience, expertise, network, and sometimes it does matter. Do you think this investor has their best interest for you or are they gonna be a vulture? And this goes back to knowing the legal language. Are they gonna be a preferred share investor? Kick you out in a year and put someone else in there?

'cause they like your idea. And Cs have to look into that stuff too. They have to know the venture capital. Terms of negotiating, that's important too. 

Mehmet: It's very important and I think very few do do that. Um, unfortunately. So, and we are coming to close. Um, Daniel, like final words you might want to share, you know, with the audience today and where people can, you know, know more about you and get in touch.[00:43:00] 

Daniel: No, uh, I would say this, the world's changing, like you mentioned, a bit investment and. I think location with time's not gonna be as important. Hence with the enhancement of technology. 'cause you can work for Bali and run a company. You could work in Dubai, in the beautiful beaches in Dubai and run a company that's based in the States in Delaware.

So I would say in one investing, if you're investor invested in the team and stuff, don't focus too much on location if you're a startup. Think of the worst case scenario and think about what the investor needs and wants. And patience, as I say, is a virtue. So try to be patient when it comes to growth and success.

But those who are interested can reach out to me on LinkedIn. A Daniel, Nikic, it's pretty unique name, so there's not many of us. And uh, they can check me on my website at www.danielnikic.com. 

Mehmet: No [00:44:00] problem at all. Daniel. Don't worry about how to find you. I'm gonna put the links in the show notes so the guys, they don't have to go and, uh, search it up.

Uh, I really enjoyed the discussion, Daniel and, um. I, I think you know this, uh, worth to have a part two, just, you know, about the VCLP also as well, because that, uh, we didn't touch much about it because, you know, I, I wanted today to focus more on the founder's part and, you know, the global investment things and what's happening around us.

But, uh, just, you know, as like underlining what you mentioned is it's important for founders. So location, as you mentioned. Any takeaway I would take today from you, Daniel, is like the location as you mentioned. The second thing is don't rush things. Don't try to over smart or, I don't know what's the right word here, like to, to, to rush things in, in a, in a nutshell.

And understand also like in investors themselves, they have their own, um. [00:45:00] Processes also as well, and especially for VCs. So these guys, uh, as Daniel mentioned, so they report to LPs and maybe they did first close, maybe still the whole fund is not there with them. Maybe the money is not in their account there.

And don't get them wrong because sometime they have to source deals so they can show their LPs. So you need to be smart enough as Daniel mentioned, and go do your homework. And again. Daniel, thank you very much for all the information you provide us today. I really appreciate that. They will find the links in the show notes, as I said, and this is how I end my epi.

This is for my audience. If you just discovered this podcast by luck, thank you for passing by. I hope you enjoyed it. As you are seeing, we are trying to mix the topics from every aspect related to entrepreneurs and of course to investments and operators also as well. And if you are one of the people who keep coming again and again, thank you very much for the support.

Thank you for all the. You know, great work you have done for me this year, 2025, like putting the podcast in the [00:46:00] top, uh, 200 Apple Podcast charts in multiple countries. We keep changing countries every week, but you know, there is no one week without being, uh, in one of these top 200 charts. So thank you very much for the support, and as I say, always stay tuned for a new episode very soon.

Thank you. Bye-bye.