Startup Funding: Fahad Alrasheed, Principal, Vision Ventures Fahad Alrasheed, Principal, Vision Ventures, discusses pathways to financial growth through lasting investor alliances.

This article is part of Startup Funding - Investor Insights Every Entrepreneur Needs by Entrepreneur Middle East, a series where the MENA region's leading venture capitalists share practical advice to help founders navigate the challenges of building and scaling a startup.

Fahad Alrasheed, Principal, Vision Ventures, discusses pathways to financial growth through lasting investor alliances.

What are the top three things founders should absolutely do when preparing to raise their first round?

First, dream big but stay realistic. Investors are naturally attracted to founders who aim high and want to tackle large, growing markets. Ambition shows belief, energy, and potential scale. But ambition on its own is never enough. What really convinces investors is the ability to take that big picture and translate it into practical steps. Show how your vision can be broken down into clear milestones, realistic timelines, and a go-to-market strategy that makes sense. Talk about where the opportunities are, but also be honest about the risks, and demonstrate that you understand them and have thought about how to manage them. Big thinking excites, but realistic execution builds trust.

Second, clarity in communication is just as important. When you pitch, keep it simple, structured, and easy to follow. Use terms investors are familiar with and stick to standard instruments and models. Avoid jargon, buzzwords, or overcomplicating your message. It is not about trying to impress with complexity, it is about showing focus and conviction. Investors see countless pitches, and the ones that stand out are the ones that are straightforward and confident. Creativity should shine in your product, your customer experience, and how you solve problems, not in how you present your business model or explain your deal terms.

Third, decisiveness is what sets strong founders apart. When you are asked about how much you are raising, how you plan to spend it, or what hires you are making, you need to give direct, concrete answers and avoid giving ranges. Vague responses signal that you have not thought things through. Be clear with numbers, hiring priorities, and expected milestones. If you need to give a range, explain the reasons behind it and what each outcome would mean for the company. This level of preparation shows maturity and builds confidence that you are ready to deliver.

What are you really looking for when evaluating early-stage startups?

What I focus on first is the team. At the early stage, nothing is more important than the people behind the company. I look for founders who are sharp, driven, and experienced, but also genuinely connected to the problem they are solving. Strong founder-market fit matters a lot. Do they understand the field in a way others cannot? Can they adapt quickly when things change? Do they have the resilience to lead under pressure and the clarity of thought to make tough decisions? A strong team can adjust the product, reposition the business, and overcome early mistakes. A weak team, no matter how exciting the idea, will struggle to execute.

The second factor is the market. It has to be large, growing, and open to new entrants. Even if the company starts small, I want to see clear potential to expand into something meaningful. The best markets are not only big in theory but also active, with customers ready to adopt new solutions. Markets that are saturated with similar players or that resist change are much harder to break into.

Next comes the problem. It should be real, painful, and urgent. The strongest startups are built on solving problems that customers already feel deeply. They do not need to create demand, they respond to it. I want to see signs that people are already searching for solutions and that solving this problem creates clear value.

Then I look at the solution. It needs to be focused, easy to explain, and differentiated from what already exists. What matters most is whether the team can build something that is defensible over time, whether through technology, customer relationships, insight, or operational advantages.

Finally, I assess the deal structure. It should be fair, aligned with the stage of the company, and designed to set both the founders and investors up for long-term success.

Can you share a personal anecdote—either a pitch that truly impressed you, or one that missed the mark and why?

There are some common pitfalls that I see founders fall into, and three stood out in a recent meeting with a startup in the logistics space.

The first was about understanding the type of returns that early-stage VCs are aiming for. In most cases, VCs are looking for opportunities that can generate at least 20 to 30 times the original investment. The founder, trying to come across as transparent, openly said he wasn't building a billion-dollar company but was instead targeting one worth a hundred million. The issue is not just the number itself, but what it revealed. He was working in a massive market, yet the ambition he expressed didn't match the size of the opportunity or the expectations of an early-stage VC. It came across less as humility and more as a lack of alignment and preparation.

The second was spending too much time talking about exit opportunities when you are at a Pre series A stage. When founders emphasize potential acquisitions or quick exits too early, it often signals that they're not focused on building something truly big. It can also feel like a way to compensate for not having enough strengths to show. At that stage, what really matters is demonstrating scale, ability to execute and a plan to win the market.

The third mistake the founder made was being overly fixated on valuation. He treated the number as if it would determine the success or failure of the company, when in reality what matters most at an early-stage is how much capital is truly needed to reach the next set of milestones and how much ownership the founders are comfortable selling to get there. That naturally implies a valuation, but starting with the number rather than the needs of the business creates distortion and unnecessary bias. It is also important to understand the difference between a valuation cap, which is commonly used in agreements like SAFEs, and the intrinsic value of a company. At a pre-Series A stage, where there is little traction and no meaningful cash flow, there is no fair valuation in the traditional sense. You are not truly valuing the company at that point, you are pricing risk, opportunity, and the strength of the team. Each round is only a stepping stone to the next, with the pre-seed round setting the stage for the seed, which then sets the stage for Series A, and so on.

Related: Startup Funding: Noor Sweid, Author and Founder and Managing Partner at Global Ventures

How should founders approach a "no"? What's the best way to build long-term investor relationships even if they don't get a cheque right away?

Founders should approach a "no" as a "not yet." An investor's decision is tied to timing, stage, and circumstances, and it does not necessarily reflect their future interest. Many companies have gone on to raise from investors who initially declined, so the key is to keep the door open. The best way to do this is by asking for permission to add the investor to your update list and sharing progress consistently. Short, focused updates on traction, product milestones, or hires can slowly build trust and credibility. When possible, ask for feedback on the reasons behind the rejection. Even a brief response can help refine your fundraising approach and highlight gaps you might not see yourself. Not every investor will respond or provide detailed feedback, and some may even go silent, but that should not discourage you from maintaining the connection. Professionalism, patience, and consistency go a long way.

I always tell founders that fundraising is not about the quality of a single meeting but about the volume and consistency of their outreach. Even the best companies will face dozens of rejections because that is simply how the venture space works. Expecting and normalizing rejection helps keep perspective. This is why founders should meet as many investors as possible, maintain relationships with those who pass, and treat fundraising as a continuous process rather than a one-off event. Networking, sharing updates, and building relationships must happen even right after you close a round, because the groundwork you lay today makes the next raise smoother.

Still, there are times when you do everything right, meet lots of investors, communicate openly, take rejections with maturity, and fundraising still does not come together. Sometimes it is due to valid concerns about the business, sometimes it is simply market timing. When that happens, founders need to step back and analyze honestly. Is the issue execution? Is it the model? Is the timing wrong? That reflection might lead to doubling down and persisting, bootstrapping for a while, pivoting to a different approach, or in some cases, deciding to shut down.

What startup sector or trend are you most excited about right now—and why?

The rise of AI is creating both enormous opportunities and serious risks. While predicting which specific trends will dominate is difficult given the pace of technological change, it is easier to identify the challenges AI is generating and the sectors best positioned to address them. Cybersecurity is perhaps the most urgent in my opinion. The surge of AI-powered attacks, ranging from automated phishing campaigns and deepfake-driven social engineering to autonomous malware capable of adapting in real time, marks a fundamental shift in the threat landscape. Traditional, static defense systems are increasingly inadequate against threats that learn and evolve as quickly as the technologies they exploit. What is needed are adaptive, intelligence-driven security solutions that can anticipate, respond, and improve continuously. This makes Cybersecurity one of the most critical growth sectors of the next decade.

Another sector showing strong potential is Insurtech. With Vision 2030 and recent regulatory changes driving higher insurance penetration in Saudi Arabia, the industry is undergoing rapid transformation. Traditional models are being challenged by startups that use digital distribution, AI-enabled underwriting, and customer-first products to serve a new generation of users. The market is both underserved and fast-growing, creating opportunities for great founders to capture share and build category-defining companies.

Fintech, while already one of the hottest sectors globally, is also evolving into a more mature and exciting phase. The early wave of payment solutions and digital wallets has paved the way for deeper innovation. Today, startups are tackling complex problems such as embedded finance, cross-border payments, digital lending, wealth management, and infrastructure-level improvements that underpin entire ecosystems. We are beginning to see real fintech emerge, companies that are not just adding a digital layer on top of existing financial services but are fundamentally redesigning how those services operate. This shift promises to create more efficient, inclusive, and scalable financial systems.

Related: Startup Funding: Rema Alyahya, Vice President - Venture Capital, Merak Capital