2024-04-27 14:38:10
Offices for travelers in Tel Aviv. “Tell me Thals, what are you telling me about viruses now?” (Photo: Dreamstime)
With Cinnamon oakinvestor in the Ibex Investors fund, Red MaholCEO and co-founder of WATS VA andEitan Gironinvestment analyst at Blumberg Capital
The capital raising process includes many meetings between investors and entrepreneurs, most of which do not mature into an investment. But this does not mean that the deal cannot be made in the future, and it is important to understand the feedback between the entrepreneurs and the investors correctly. Take for example Noam Twister, founder and CEO of Travelier, who was able to close an investment deal with Barak Salomon, managing partner at Red Dot Capital Partners, after receiving two “no’s” from him, it’s a really great story, so it’s we know they invited them both to a new episode of “the ecosystem” so they can tell us exactly what happened there and what we can learn from it.
We’ll quickly introduce the working people: Red Dot Capital invests in Israeli startups in early stages of growth. Travelier is a travel platform – like Booking.com for buses, ferries, trains and private transfers. This is a market that was made in developing countries mainly offline, until the company appeared.
Twister and Salomon spoke for the first time before the start of the corona virus, in December 2019, and reached the due diligence process in January 2020 – when the company already had significant activity in China. Salomon usually reads about what is happening in the Chinese media, and he heard that something strange was happening there (even before we knew what Corona was). He called Twister and explained that he would not be investing in it at that time because of what had happened in the Republic.
But a “virus in China” appeared to be an excuse for Twister, and he was angered by what he perceived as a lack of honesty on Salomon’s part. “In previous conversations with Barak, I told him that I really like investors who give direct and clear feedback, because not all investors act like that, and Barak really does,” says Twister. “When he told me there was a virus in China and that’s why he didn’t want to invest, I answered him – ‘Tell me, what are you telling me about viruses now?'”
He soon discovered that Solomon was right. “Until the corona virus came out, we grew very well and everything was going great,” he says. “But in March 2020, all our sales dropped 50% within a week, and 99% within two weeks. We had to lay off employees and figure out how to deal with the situation. From a business perspective, we hit a wall, and we didn’t know when we would get off.”
The second “no”.
Salomon says he received a message in October 2020 from Twister, who asked if it was possible to talk again. “There was a time when we were all locked up, and we had to zoom in with him and the entire management. I got an hour of one of the best presentations I’ve ever seen, and put They plan accordingly, going to buy all the competition in the market in an excellent position.”
This was impressive, but the risk did not match the nature of Red Dot’s investment activity. “We invest in enterprise software, in a SaaS model in the cloud, but Noam told us that he needs money for purchases in South America, which seems no less suitable for the fund,” continues Salomon. “Even though there were clear goals for the use of the capital, I told him a second ‘no’, but I said the plan looks great and if he really does it he should get back to me. “
So how was the deal closed in the end, what can be learned from each “no” and what can be learned from this story?
Listen to the full episode on “The Ecosystem” podcast:
#investor #told #time #ended