Why Startups and SMEs Struggle to Secure Funding – And How to Fix It, with Ado Alhaddad

In this enlightening episode of FinTalk, our Co-Founder and CEO, Ivan Jesus, engages in a thought-provoking conversation with Adel Hameed, author of Skill Up As You Scale Up, a seasoned entrepreneur with a wealth of experience spanning startups, accelerators, and economic development. Together, they unpack the challenges startups and SMEs face when seeking funding and provide actionable strategies to overcome them. From managing cash flow to building scalable processes, Adel shares valuable insights that every entrepreneur can benefit from.‍

Key Highlights

Understanding the Funding Journey: When and How to Raise Capital

Adel highlights the importance of timing and preparation in the funding process. Entrepreneurs often rush to secure funding without validating their ideas or building a prototype. Adel emphasises the need to self-fund initially, proving your business model’s viability before approaching investors. This not only builds credibility but also ensures a stronger negotiating position.

Governance and Bias-Free Decision-Making

Adel stresses the importance of governance, especially in startups where decision-making can be influenced by emotions or situational biases. Hiring a skilled CFO can help leaders maintain financial discipline and make objective decisions. Strong governance also sets the stage for long-term sustainability and scalability.

Cash Flow Management: Avoiding the Most Common Pitfall

Cash flow issues remain a major challenge for startups and SMEs. Adel introduces the concept of free cash flow—aligning payment terms with customers and suppliers to avoid liquidity gaps. Properly managing cash flow timing can mean the difference between thriving and failing.

Pricing Strategy and Long-Term Customer Relationships

Startups often lower prices to attract customers but fail to manage expectations, leading to challenges when attempting to increase prices later. Adel underscores the importance of balancing competitive pricing with profitability and avoiding long-term damage to the business and industry.

Scaling Through Minimum Viable Optimisation (MVO)

Adel introduces his concept of Minimum Viable Optimisation (MVO), which encourages businesses to implement essential best practices early in their journey. By focusing on foundational efficiencies, businesses can avoid costly corrections later, ensuring a smoother path to scale-up success.

Post-Funding Mindset: The Discipline to Succeed

Once funding is secured, staying disciplined becomes critical. Adel explains how to foster financial mindfulness by connecting business activities to financial outcomes. Metrics like capacity ratios and simplified financial models can help leaders allocate resources effectively and track success.

Practical Takeaways for Startups and SMEs

• Pre-Funding: Validate your business model, build prototypes, and maintain clean financial records. Establish governance frameworks to ensure sound decision-making.

• Post-Funding: Focus on scalability by building robust processes, avoiding vanity metrics, and prioritising meaningful KPIs that drive real value.

• Operational Excellence: Use MVO to streamline operations and lay the groundwork for sustainable growth.

Tune In Now!

This conversation with Adel Hameed is packed with actionable insights for navigating funding challenges and scaling successfully. Whether you’re an aspiring startup founder or a seasoned leader, this episode offers valuable lessons to help you achieve your goals.

Listen to the podcast on Spotify and YouTube, and stay tuned for more expert discussions as we continue exploring the latest trends in finance.