Hasan Haider has over 13 years of experience investing in MENA startups. Hasan is the Founder and Managing Partner of +VC, one of the most active early stage venture capital firms focused on the MENA region. Hasan was previously Managing Partner, MENA at 500 Startups and led the firms growth in the MENA Region, turning 500 Startups into the most active VC fund in the MENA region, raising and deploying the 500 Falcons fund, building partnerships and running programs in the region to help build the regional ecosystem. Hasan has invested in more than 250 startups in the region over the course of the last 5 years.
Contact Links
Hasan’s LinkedIn account: @Hasan Haider
+VC’s Website: https://plus.vc/
Transcript:
Ali Zewail: Welcome to the Startups Arabia podcast. My guest today is Hassan Haider, founder and managing partner at Plus VC. It's one of the most active VCs in the region in terms of number of deals, which is something really cool. We're really going to dive into the more than 200 deals he's been involved in, I guess, as we have the discussion.
Ali Zewail: I'm veryhappy to have you here today, Hassan.Hasan Haider: Happyto be here. Thanks for having me.Ali Zewail: Thankyou. So maybe we can start at the very beginning. Uh, you studied economics,uh, college and you went, you know, in the typical career that you wouldexpect. You started in investment banking, you know, uh, in your country. Andthen suddenly you decide to do an online DVD rental, company. Why, what, whatmade you do that?Hasan Haider: I don'tknow. I think I've just been crazy my whole life. Uh, um, honestly, when Ifirst graduated, I thought, you know, as everyone does, I'm going to go intobanking. I'm going to have a great career. I'm going to be an investment bankeror whatever, and I'll have a really nice life there. Um, and I was lucky.I ended up working in a really great place called SICO as amanagement here in Bahrain. And I learned a lot of really good habits of, youknow, building a team, building, uh, working together, you know, how to work ina professional environment. But at one point I started to feel like I wasn'treally doing anything with my life.Like I was just, um, I was moving numbers from one Excel sheetto another and that was kind of it. So like whether, um, you know, I talked tothe CEOs of these companies. I used to do investments in listed equities. Andso whether I invested in a company or not, would make no difference whatsoeverto the CEOs of those companies.So it wasn't like meaningful. And it was good. I was good atit, but like, I didn't, I, I didn't have meaning. Right. And so I ended updeciding to, you know, let me launch my own startup. Um, and I love movies. Iwatch, uh, a lot of TV and movies. Uh, and. So I ended up thinking, Hey, let medo this thing. Cause Netflix at the time was just DVD rental.It wasn't streaming. I was like, let me do the same thing aswhat those guys are doing, uh, here in our region. And, uh, I made. all themistakes. That's not a lot of mistakes. I think I did all the mistakes that nowlooking back, I was like, Oh, you shouldn't do that. Shouldn't do that becauseI did it like it didn't work.Um, and so that gave me a sense of, yeah, I'm doing something,uh, something that I really enjoy, something that's that's close to my heart aswell as I'm having an impact. I'm building this thing, right? Um, so that, thatwas the reason, like it was, it was looking for, I guess, meaning was thething.Ali Zewail: And, andwas it, was it, were you looking at it as a startup? So that keyword, was thatlike in your mind at the time? Because it wasn't really the Vogue at that time,or was it just a business that you thought about?Hasan Haider: No, Iinitially thought of it as a business, but then I was using Netflix is like thething that I was looking into. And so I read a lot, right? So I constantly wantas much information as possible. And whenever I have a spare minutes or two,I'm reading about something and it's always random, random stuff.But, um, In reading, I started to read about the history of howNetflix was funded and founded and what that ecosystem looks like. What isventure capital? What is angel investment? You know, I, I started to really,uh, understand that, Hey, there's this entire little universe of things, uh, offinance plus technology, plus things that I enjoy that, that's actually quiteinteresting.And so then I started reading about the history of SiliconValley. I started reading about all the other history that's out there. And itwas super, super cool because one of the things maybe is really, you know,earlier in my life. I had a path, I had a choice to decide whether I go intocomputer science or I go into economics and finance, and I was making thatchoice after the dot com bubble burst. Uh, and so obviously I was like, Oh,there's no future in this technology stuff. I really enjoy it. I love this. Ilove like computers and science, computer science and stuff, but there's nofuture. Let me just go Ali Zewail: Yeah. Hasan Haider: Um, soyeah,Ali Zewail: So yeah,you never know, which shows how much future planning works, right? Yeah.Hasan Haider: there'sno such thing, man. Like I, I, I, I, I've fallen into every single step of mycareer, right? Like it wasn't a, adesigned path to be where I am now. Yeah.Ali Zewail: Sospeaking of, I mean, of falling into, can you tell me, I mean, you, the, the,you eventually end up closing this startup and you're still, but you're stillaffiliated with your bank. Or your investment banking career, and then youdecide to leave all that and to start to go even deeper into startups bystarting an angel network in a, in a country that, uh, is, was historically afinancial hub, of course, for the region, but it has a very small market.And so, I mean, starting an angel network in Bahrain doesn'tseem that obvious. I mean, how did you end up making that Yeah,Hasan Haider: Uh, soagain, I guess I fell into it, right? So as I was making all of my mistakes inthe startup, I was starting to try and raise funding from angel investors. Iwasn't trying to raise a lot. Like at the time, I think I was trying to raisemaybe 50 or a hundred thousand dollars for like 50 percent of my business.You know, like I didn't really know what I was doing at all.And I started to come across a bunch of the different sort of family offices.in Bahrain. And one of the people that I met was it was my mentor, Sami Jalal.So he comes from a business family, Mohammed Jalal and Sons are pretty bigfamily here in Bahrain.And he, for some reason, took an interest in this kid that hasno idea what he's doing. And he would he would meet me on a regular basis,maybe once a week, once every two weeks. And he would give me some reallypractical practical advice on the business and how to improve things and how tomake things better.Um, and I love that. I was like, I wish that I had met you. AndI'd had this advice when I was starting my, my journey in this thing. Not nowthat, you know, it's almost too late. Basically I've already made all themistakes and like, I I'm trying to fix stuff, but it's not really working. Um,and so one day I was there and he was, he's like, he's like coaching me againand telling me you should be fixing this, doing this and your financials.And then he's like, you know, if you were in the U S you would.gone much further, like what's, what's missing? And he's like, and I've beenreading. So I was like, We don't have angel investors in the region. Likeforget about in Bahrain, like the regionally, there is an angelinvestor. And he's like, what is this angel investors thing?And this is like 2009, I think it was. Right. And so, uh, Iexplained to him, I was like, it's people like you that, uh, have experience togive, but are also going to invest in startups. And so one of the things thathe said he did is he's like, you know what, let's do that. I was like, oh,okay. That's, that sounds cool.And so, um, he, he became my champion. He became my mentor andreally helped me out. And, uh, and we started to meet his network of people. Westarted to meet entities within the government here. Um, We got a reallyamazing supporter in Sheikh Mohammed Naysa here. He was the head of theEconomic Development Board and the Bahrain Development Bank, so he brought themon board.And amazing people came together and Honestly speaking,everyone was putting in a very small amount of money into this company to thatwe were going to set up for angel investments, but they were committing theirtime and they were committing their interest, which is more important to methan the funding.Um, and so, yeah, and then we ended up about a year later, uh,setting up 10 more right at the, uh, time when the financial crisis is kind of,uh, it's great. I've been through so many crises. I've been through so manylike crises. I was like, you know what? It'll, it'll pass, just working throughit and Yeah.And so I had some amazing mentors, uh, some of the best.in the community and they really were doing this to support thenext generation of entrepreneurs here in Bahrain. Like that was their entiremindset and incentive. Um, and we did it.Ali Zewail: whichactually brings up like, uh, something of your reply here is the importance ofmentors. And did you like, how did you, how do you advise people to get mentorsand, and engage them to support them? Because it's obviously made a differencein your life.Hasan Haider: I thinkit's mostly like if you find someone who has something valuable and advice togive you and is willing to give you their time and that advice, you need tobuild on that. Right. So it's not, you're not like, Go it. The mentor menteerelationship, I think is biased towards the mentor wanting to support thementee.So you need to be someone that's coachable that can go back tothe mentor and tell him, Hey, listen, this piece of advice you gave me, I triedX, Y, and z. I did this, I did that. And keep building that personalrelationship with your mentors. And I think that is a, a key sort of thing.Ali Zewail: Yeah, sokind of building in a feedback loop so that the mentor gets positive feedbackfor the help they gave you that, Hey, this is actually making a difference inthis person's life. And because they're probably doing it for, because theyenjoy helping others. I mean, there's no other reason. Yeah, cool.Hasan Haider: Yeah,so I found, I found some real amazing mentors. And so Sami Jalal, Fawaz alGhasaibi, I had, uh, Mohamed Kouheji and a bunch of really cool people that Icouldn't believe were willing to give me their time. And I learned, I was likea sponge.I was soaking from them as much as I possibly could. And, uh,and. And at Tenmu, it was an amazing board and they were all really, reallysupportive. That was great.Ali Zewail: And afterTenmu, you ended up having like a pivotal, uh, role in building up 500, uh,their operation in the region. I mean, how did Tenmu lead to 500 or did it?Hasan Haider: Yeah,so at Tenmu, I was seeing all of these startups from all around the region. Um,because there weren't that many people in 2010 11 that were actively investingin startups. equity and startups. And we were. And one of the things that Iwanted to do really early on was I wanted to unite the regions rather than justdo behind.And that's it. Because I knew behind is a small market, butthere's opportunities everywhere. So I I started this, uh, mean angel investorssummit that we'd have in behind and we bought the other angel groups and someof the accelerators. I remember flat six labs back to zero, uh, a call whenthey first got started, uh, Cairo angels.So I brought a bunch of people together. Like it was early onand it was not, not huge, but, um, in that I'd started to see really greatdeals in Egypt and Jordan. These were the two ecosystems that were emerging atthat time. And then slowly the UAE as well. And, uh, the mandate for Tenmo wasideas staged behind any sort of startups.And there's nothing I could do with them. At one point I wentto the board. I was like, Hey, listen, I want to do something a bit more. Iwant to do a VC fund. They're like, well, we didn't know anything about angelinvestment until you told us what that was. We don't know anything about thisventure capital stuff.You go and figure it out and let us know what you want. So Ihad the, initially I had this thesis where I wanted to do, um, I wanted toinvest in the MENA region, which is super nascent, and I wanted to diversifythe risk out a little bit. And this is for my, my whole life is, let me, how doI mitigate the risk?And so I wanted to mitigate the risk of investing in a reallyearly ecosystem by investing part of the fund in a developed ecosystem likeSilicon Valley. So I wanted to do like half the fund in MENA, half the fund inSilicon Valley, and then, and then, you know, raise it that way. So people thatweren't interested in the region would still have to invest in the regionbecause Both are, are linked.I had no idea what I was doing. And so I ended up going on likewhat I call now the, the Disneyland tour to Silicon Valley. I met with a bunchof funds. This is what, 2013, I think 13, 14, uh, met with a bunch of fundsthat all on their website says we are global investors. Um, and literally likein one of the meetings, partner that I met with.It was nice of him to meet with me, some random kid coming fromthe Middle East. Um, but he's like, when I started talking, he's like, wait asecond, where, where are you talking about? I was like, oh, it's the MiddleEast and North Africa. And he's like, just, just hold on. And he pulls upGoogle Maps on the screen.He's like, can you just point to where in the world you'retalking about? I was like, what? Okay, so I know this meeting is not going togo well after this, uh, but one of the people that actually was superinterested in the region had already invested in the region in a few deals wasDave McClure at 500 Startups.And so, um, I met with Dave and Dave's like, sure, we can helpyou with deal flow in the region in Silicon Valley. And we can help you withthis structure. Invited him to the region a few times to, he came and spoke ata few events in behind and other places. Um, and then eventually he's like,Hey, listen, why don't we just join forces?Why don't you join us? And. And help us, uh, set up stuff inthe region. And so I was like, yeah, why not? So ended up joining 500 as themanaging partner for the MENA region. While there, I built out all the reallycool stuff that we did. We built out the brand here in the region quite well.We did, um, we had a really good portfolio.We raised the fund that was from, we invested from 2017 to2020. We did 181 investments. So we, we investedin more deals than anyone else at the time. And I think. Thatbroad portfolio actually supported a lot of the next level of investors toinvest at Series A and B. We were giving them enough deal flow that actually,hey, all of a sudden this thing sort of makes sense.There's enough deals for us to be investing in and looking atin the region. Um, so that was, that was fun. Yeah, it's good.Ali Zewail: And whatwere the main challenges that you met starting that machine up?Hasan Haider: Uh,honestly speaking, um, It was, it was interesting. I mean, there was a lot ofstuff going on at 500 at the time as well. So that was all the internal thingsthat we had to work on other than that, related to the ecosystem. It was sonascent. Like I had to create my own LPs. Like I had, I was, I supported thedevelopment of the OTF fund in Oman and then they became our LPs and thensupported development of the Al Wahha fund in Bahrain and then they became ourLPs in the fund.So, you know, I had to go out and like create the pools ofcapital that would be investing in us. Um, and Qatar Science and TechnologyPark, they were our anchors and they also set up a fund that, um, that thenstarted investing in us and other startups and stuff, which is pretty cool. Soit wasn't as straightforward.These are the LP sources, go and get them and raise a fund. Itwas like, let, you know, let's figure this out and let's build something fromscratch. Um, and then, you know, building out the brand was, was prettystraightforward for me. I think once you're active and you're an investor, um,and you're, you're a nice and you're collaborative with a lot of people.And that's sort of what I do, even with, plus that's our wholethesis. Um, it happens, you know,Ali Zewail: Founderstell each Hasan Haider: people.Yeah, you invest in good people, you're helpful and it works.Ali Zewail: And werethere any major lessons from your time at 500? Any things you learned, likeworking in an org, a global organization like that with so many investments allover the world?Hasan Haider: Uh, Ithink like that the early days of 500, that's where I formed the thesis. And Ireally believe in what we're doing now. Like the diversification thesis, investin a large number of deals, diversify out the risk, follow on on the ones thatmake sense. That was for me, like I'm a data driven investor, right?I like, I'm a data driven person. I like data so that I canmake a decision and I like numbers. I like spreadsheets. You know, whatever Ihave to make a decision, I open a spreadsheet and I put in some numbers andstuff. So looking at the investment approach, uh, there was pretty cool becauseit made sense, right?I never thought it made sense to invest in 20 or 30 deals andyou hope that one of them does a hundred X and then you do do a three X fund.For me, I was like, hope doesn't work. I went a real investment strategy. Iwant a repeatable, uh, sustainable investment strategy and so this works reallywell.And. It has a lot of good benefits and externalities because itallows me to invest in deals that look super weird to the rest of the market,but actually are really great founders and they'll figure it out. You know, oneof my best performing deals is Callow, uh, out of that fund and Callow wasjust, Hey, he wants to just deliver.Healthy food to people's houses. And there were so many mealplan companies out at the time. It just, and the founder had no clue. LikeAhmed had no clue about food, logistics, any of that. He was a great developer,really, really, really great at, you know, building out the product and stuff,but no idea about the logistics of food.Um, but I was able to take a chance, you know, and, and byable, by investing in a large portfolio, you're able to invest, you In what Icall, um, non obvious outliers, like they're not obvious to the rest of themarket, but you see something that is different and you're able to like takethat, that chance and invest in that, uh, because of the large portfolio.So that, that's really, I think one of the best things thatI've learned, um, and that's how we invested at plus as well. So that's,that's. Following the same strategy that we were doing there.Ali Zewail: Yeah.Yeah. And it doesn't make sense. And I, I recall Uh, seeing Dave at the Rise UpSummit in Egypt, talking about that strategy and how it makes sense and, uh,feeling, yeah, actually I never thought about it that way, but, but, but you'relike the positive externalities you mentioned are, are really cool and I hadn'tthought about that.And speaking of plus and its strategy, tell me about plus, Imean, you know, how did it come about? Why did you, and what's the strategy inmore detail? Well, let's flush out the thesis,Hasan Haider: Sure.Yeah. And you know, 2020, we finished investing out of fund one at500. Um, and it just came in time to make a decision. There are a lot ofchanges at 500 at the time internally. And I was just like, This is what I wantto do or because it was going to change our thesis and strategy, which I didn'twant to do.So do I want to do that and stay or do I want to continue whatI was doing it with the Falcons fund, the 500. But, you know, In my own thing.And so I was like, I want to continue doing what I was doing. I don't, I don'twant to focus on accelerators. I don't want to do all this other stuff. I wantto just be investing in really great companies.And so that's, that's the, that was the thesis. And so, um,launched plus, uh, after we finished deploying out of fund, uh, the fund at 500and plus this thesis is pretty much, um, we're investing at the seed stage, wetried to be early. Uh, we tried to be. amongst the first institutionalinvestors in a deal. Um, and, uh, we invest a small amount, but we can leadrounds.We can set terms because there's a lot of investors that arefollowers, but need someone with experience to lead. And we're happy to playthat role, even with a smaller check. Um, we're agnostic. We'll invest inanything as long as it's tech or tech enabled, but we are focused on the MENAregion. We don't, Like, in MENA, I believe I have a bit of a competitive edge.Outside of MENA, I'd be seeing the Tier 3, Tier 4 deals, youknow? Um, the worst of the worst. I've already been passed on by everyone elsewho's passed on. Um, but here, I get to see deals first, I get to see themearly, I get to invest at pretty reasonable valuations, and I really believe inthis region. Um, So plus is pretty cool.A lot of the team moved across with me from, uh, 500 to plus.And now we have our first fund. We've done 53 investments already in the pasttwo years. Um, one of the things that was really interesting is, you know,People are like, how are you just praying and spraying? You're just investingin so many deals.And I was like, no guys, if I saw a hundred deals and I put in,I put money into 53, yes, that's what I'd be doing. But over the last twoyears, since we started the fund, uh, we've reviewed, uh, close to 4, 000 dealsthat have come inbound to us. And so from 4, 000, we've invested in 53. So wereally are pretty selective.We're only investing in the top one or 2 percent of what wesee. Um, so it's not print and spray. It's there's a lot of work that goes intoit, um, to make sure that we have that we believe in, um, and that that'sworked pretty well. And that's where I'm saying, like, I think we have a littlebit of a competitive edge in the region because I don't think there's a dealthat takes place in the region that I haven't seen or have access to through mynetwork.So we kind of have full coverage in MENA. Yeah. Uh, outsideMina I don't have that yet, so that's, that's what we do.Ali Zewail: Sothere's something you said that made me feel, I mean, on the website, you talkabout investing in the diaspora as well for like 10 percent of the deals, butit seems that you're going, you're moving away from that, uh, of theHasan Haider: Uh, Ali Zewail: Am Icorrect from what you're saying that becauseHasan Haider: so thediaspora thesis, part of the thesis was we would invest in MENA foundersanywhere in the world. Um, we're still doing that, uh, on a limited scale. Sowe still do invest in MENA founders wherever they are in the world. But what wefound is we don't have as much value to give those founders as we do for theones that are on the ground here in the region.And so we still find those deals really early. And we do have abit of a competitive edge when it comes to like Amina founder relocating fromEgypt, for instance, to Silicon Valley, we'll still see that deal. Right. But,um, I think what ended up happening is, you know, if it's in Silicon Valleyversus here, it's, it's a harder thing for us to really add a lot of value.Right. I think that that became quite clear over the last twoyears. So we're not, not doing that. We're just doing it. Less than weinitially planned, I think is the, is the thing. Yeah. And I, you know, I thinkwe'll still be opportunistic with that, but again, like it's only because wehave that competitive edge, if it's a MENA founder that's left the region goingsomewhere else, like I won't go to Silicon Valley to sort of, uh, that, thatwon't really work.Ali Zewail: Got it.And, uh, you mentioned like, uh, filtering out like from 4, 000, uh, deals, uh,to 53. So, I mean, how many, just to give our listeners a feel, how manyemails, uh, from startups do you get every day typically?Hasan Haider: Oh, sothis was the thing I stopped. Like, I, we, I hate emails. Like emails don'twork. Right. Emails. I, there were deals that were getting stuck in my inboxfor like three months. And I was like, I was getting to it, but it took so longto get to it. I was like, Oh, I like, I'm embarrassed now. Should I, should Ieven respond to this deal or not?So emails just don't work for this thing. Like, I don't believethat emails are the right way to manage your deal flow as a VC. At all. No, especially. So we built out our systems like we built out ourown stuff. Um, so what happens is we ask every founder that apply that reachesout to us anywhere. We ask them, please, can you please apply to the website?And so now it's become a default applies to the website. And sowhen someone applies to the website, it goes into a system that we've built onair table. So it's no code stuff. But with a lot of automation that allows usto review a large number of deals very effectively and efficiently withresponse rates with integrations to Calendly and Google and email and all thesesort of things.So it makes our lives much easier. And my objective is to getto 100 percent response rate to anyone that applies. They get a response fromus, whether it's a yes or no. There's a response that goes up. That's theobjective. We're getting there, but we're not there yet. But that's that's theobjective. Um, And so far so good.That's working really well. It's not like an email CRM sort ofthing. No, it's like we will only put you into our actual process if you'veapplied and the application honestly just takes like three minutes. It's likeupload your deck, put in a few numbers and you're done. But it just make surethat it's not getting lost in my inbox.It's not getting lost in my WhatsApp messages, which is a newthing that people are sending me decks on WhatsApp. I was like, yeah, but yeah. Okay, please apply tothe website. Um, and so that makes life much, much easier. And all the processautomation and optimization that we've done allows us to review a large numberof deals with a small team, um, Ali Zewail: That'sgreat.Hasan Haider: ensuresthat we can do what weAli Zewail: How many,how many people apply every day, roughly speaking?Hasan Haider: I waslooking at, I think we get about 60 a week, so about 10 Ali Zewail: Wow. Hasan Haider: or so aday.Ali Zewail: And, andwhat makes an application stand out? For plus VZ.Hasan Haider: So thething is, we wanted to be as democratic as possible and give access to everyoneto be able to get funding, right? One of the things that I don't like is, Is inSilicon Valley. It's who's referred you to a deal. Then someone will pick upthe call and chat with you here in the region. It's such a broad region.There's so it's such a new ecosystem that some people justdon't have that access. They don't have that network. Like how is someone fromMorocco going to reach out to me through? I mean, I'm I'm accessible through alot of different means. I think half of the world has my mobile number, but,um, but I don't believe in that.Yeah. Part because you're missing out on founders that arereally, really great, but just don't have network yet. So they're just gettingstarted. They don't know people. And so why miss out on that? Right? So Ourthesis was we can be their network, so anyone can apply through the website, wewill review everyone, and anyone who is even slightly interesting, we will havea call with.So, um, to tell you, like, out of 4, 000, we've had detaileddue diligence on 700 of those. So we try to give people as much of a chance aspossible. We don't, we try not to reject stuff purely on a deck because whatwe're really investing in is the team and the people. So we can only really geta feel from that, from a conversation and a call and, and, and real interactionand stuff.Ali Zewail: Right. Hasan Haider: soyeah, that's Ali Zewail: Soso how do people get to the call? Uh, how do they stand out?How do they make a difference? Or is it more about the traction?Hasan Haider: yeah, Imean, it's, it's show us that you can execute, show us that you're buildingsomething. Um, I've seen founders that shouldn't even be called founders. Italked to them one month and I talked to them six months later and 12 monthslater, what have you done? Oh, nothing. We're still trying to raise. Oh, we'retrying to raise.Oh, we're trying to raise. I was like, dude, no, your objectiveas a startup is not fundraising. Your objective as a startup is to build thecompany. So with whatever resources you can, if you really believe in whatyou're building, you, you want to build. Start like figure out ways to likehack something together and launch an MVP.And it's not impossible. I've seen MPPs start for like 2, 000or 0 even, um, just to get some indication that there's a market and there'sdemand for what it is that you're building. So I think that's really the key.What I'm looking for is a bias towards execution, getting things done. I wantfounders that will get things done.That's, that's it. That's pretty easy to say, but hard to find.Ali Zewail: So thereare like people who, who are, who worship at the, at the altar of a team andsome people who say, no, it's all about market. You know, the important thingis their market for your book. And some people are very product oriented. Imean, what's your bias Hasan Haider: No, I'mteam. I'm, I'm a hundred percent. Yeah. I'm investing in people. I'm in, I'm investing in people.The product will change. The business model will change. Even the market withchange. And like, it's the only thing that won't change at the seed stage isreally the people that you're investing in. So I invest in people.That's people with a bias towards execution. The market sizething, I've heard it as an argument, and I think it's BS. Because, uh, realgood startups can't create their own markets. Like people that said no to Uberbecause of market size, right? Like, do you want to really make that mistake?And the answer is no, I don't want to make that mistake.So forget market as long as it's not a super tiny niche andthere's no nothing else they can expand into. I'll invest in it even if themarket Look small right now is potential for it to grow and our region isgrowing, right? So b2b sass businesses or fintech businesses all looked likesmall markets if you know when I was starting 10 years ago Who's really gonnause a sass platform and stuff, you know, it was like a whole thing so I don'tbelieve in that market hypothesis because I think Good startups create theirown markets.We're starting from scratch in the region, and there's so manyopportunities to create markets for things that you need. Um, and producthonestly doesn't matter. I've seen the shittiest products, uh, with hugecustomer adoption, just because it's like solving a need for people like, um,yeah. So product, product, nice product is great, but it's not, if there's ahundred thousand people using your crappy product, then there's somethingthere.Right? Right. Ali Zewail: evenbetter.Hasan Haider: It'sbetter. Like, it's so bad, but people are still using it.Ali Zewail: yeah,that shows the need is very strong. Yeah. And speaking of, I mean, Uber, it's not the investors thatdidn't invest, didn't invest because the market was, was a small and the onesthat did invest didn't invest because the market was big. They invested becausethey believed in Travis, you know, the founder and they sawhim as a, as a brilliant founder.And it turned out they were right.Hasan Haider: Yeah. There's thousands of reasons to say noto a startup and you can choose. Any one of them, and you probably would beright 99 percent of the time, but you want to be biased towards saying yes, sothat you're saying yes to the ones that are going to do really well.So that's the thing,like, you can find an excuse to say no to every single startup all the time,but you shouldn't, you need, as a VC, we need to be looking at reasons to sayyes, not reasons to say no. So that's, that's the whole thing because you'll talkto people. They said no to Uber because Travis didn't sound like he was a fulltime founder.He was playing aroundand messing around. He already, he was already successful. And that was it.People said no because of the market size. People said no, because of X, Y, Z,whatever. Like there's so many reasons to say no. And yeah, the people who saidyes, the ones that were right.Ali Zewail:Absolutely. Very right. And, uh, so how do you guys at PlusVC make decisions?Are they like unanimous investment? I think you have one partner, uh, and, and,uh, you know, other team members. Uh, is it the unanimous? Doyou, uh, does each partner choose their investments? How do you make the, andwhat's the typical, if, if a startup reaches out, I mean, what's the typicalprocess?How does it go? First meeting, second Hasan Haider: Sure.Yeah. Uh, no, unanimous leads to group think leads to people missing out on nonobvious outliers. There might be something that you see as a partner that yourpartner doesn't see, you should be able to follow that lead to see where itworks. Because if everyone agrees on everything, you're not going to beinvesting in these, in these opportunities, which are where the real, um, alphais where the real returns are going to be.So I don't believe in unanimous investment decisions for firstchecks. I think first checks people should be able to advocate for a deal. Andif, if they really, really believe in that deal, they should go ahead andinvest in that. Um, and so that's, We run an advocacy based approach. We try toget to consensus, obviously.We're not just going to be jackasses and decide on whateverdeals we want. So we try to get to consensus as much as possible, but at theend of the day, we can advocate for a deal if we really strongly believe in it.So it's an advocacy based approach. Most of the time we are in consensus, butIn edge cases, when we're not, we, we follow the advocacy model.Um, that's our first checks for follow ons because we do largerchecks for follow ons, bigger allocation out of the fund, et cetera. Uh, therewe do operate by unanimous consent because we have, we're putting more money towork in a fewer level of opportunities. We want to be, we want to be sure thatwe're not just.Two in love with the deal that we did. Um, and so we, we do aunanimous decision making for a follow up.Ali Zewail: Got it.And there is kind of signaling risk as well. I mean, uh, in the followon, because if you don't invest, that's also might be a signal for the otherseriesHasan Haider: No, no,I think most of the investors know that we're not super active in our followons like we're, and we wouldn't lead a follow on anyway, and we'd wait untilsomeone else leads and sets terms and stuff, and we, we aren't big investorseven in the follow on. So we're not, it's not a signal, like there are dealsthat we love that we just aren't able to follow on it.And that's the reality of it. Um, so yeah, it's not a signal.We, we love follow ons. We love all our children equally.Ali Zewail: after allThey're all our children. So,, I wanted to ask you about, I mean, you setting up, you setup the fund, I mean, you're based in Bahrain, but you set up the fund in AbuDhabi. And of course, Abu Dhabi's, uh, It's a rising, uh, startup hub. Hasan Haider: it'sgreat. So I love these. Honestly, it was one of the best jurisdiction for us asa B. C. Fund to set up. Uh, we're regulated by the F. S. R. A. They've beengreat as a regulator. Uh, it's easy. It's straightforward. Um, And it's just anice place to be operating out of. So we, we're pretty happy with Avalabi. And,you know, a VC fund is not the same as more traditional asset classes, right?We have smaller teams, we have leaner operations, we'retargeting a certain segment of society that has, you know, larger AUM and alarger check size. So we don't have as much systemic risk on the rest of theecosystem as other assets do. Um, and so Abu Dhabi understands all of that. Andso ADGM were, you know, it's a really great place to set up.And it made a lot of sense. As an emerging manager, especiallywith limited capital resources, like it made, it was perfect. Uh, so Abu Dhabiwas a good jurisdiction.Ali Zewail: And youmeet a lot of global investors, um, who come to the region or interested, Imean, how do they see the region?Hasan Haider: Uh,they see it as dollar signs, I think.Ali Zewail: Sothey're here for the LPs, not for the startups.Hasan Haider:Honestly speaking, let's see, so 21, 22, uh, when things were going crazy in VCworld, there were a lot of investors looking at the region because they werelooking at the next sort of where, where can we deploy all of this money thatwe have right now? It's the basic, like we need to raise money. Where's theirpockets of money that we can raise from?So the, the investors that were coming in. Earlier, I wouldcomplain about it because, oh my God, they're giving these startups crazyvaluations. It doesn't make sense. It's not sustainable. And I was right. Itwas, it didn't make sense and not sustainable. Uh, and now I'm complaining. Iwas like, Oh, these investors aren't really here to invest in our startups.They're here just to take our LP money. So I'll complain nomatter what, like I'm very, uh, there's always a reason to complain. Uh, buthonestly speaking, um, Getting more late stage investors that are going to beactive in our region is something that we need, especially global managers thatcan really help our startups, um, scale and go global.Uh, I think I was, this is something that we were discussing awhile ago where. Uh, how, how come we don't have more unicorns and decacorns? Iwas like, how many people out there in our region can deploy a 50 or 100million check? Uh, the answer is almost no one, right? Like is maybe one or twoinvestors that are private equity firms that can maybe do it.And maybe some banks can do SPVs. But in general, that, that,those pools of capitals don't exist in the region. Um, And so, yeah, the morethe merrier, honestly speaking, I think the more people that are looking at aregion and I don't think they should be looking in the region. I think this isI wouldn't be investing anywhere else.I think this is this is a region that I really believe in. Ithink this is the next region to emerge. It has classic science, uh, similar tohow China emerged, how Southeast Asia emerged, uh, I mean, the regionsfollowing that path almost exactly. And so. Pretty excited. You know, thepeople that invest early in those markets did really well.Um, and a lot of the, the gains came from the local managers.So I think, you know, if you invest early in local managers, I think you'll bedoing pretty well in the region as well.Ali Zewail: Yeah. Iactually, also I compared to Latin America, so we're kind of a few years behindthem and they, Hasan Haider: LatinAmerica has had starts and stops and a few times here and there, but LatinAmerica, I think it's probably worse off than here because they have even lesspools of capital that are investing into their startups. There is more moneyfrom the U. S. that goes there because it's geographically closer, but, uh, butnot that much, like, LATAM is a huge market that I think has been ignored forquite a while.Ali Zewail: Yeah,with one language and I think in 2020 at the peak of the good times, uh, theyhad like 15 Hasan Haider: Yeah. Ali Zewail: in oneyear. So that, that was actually quite impressive. Hasan Haider: activethere,Ali Zewail: Yep. Yep.Exactly. Softbank, Sequoia. Hasan Haider:Sequoia. So Ali Zewail: yeah, So Hasan Haider: this isprobably the best region to be investing inAli Zewail: Icouldn't agree more at this timing as well.So the last couple of years have been, as you kind of hinted,pretty difficult in terms of liquidity.Uh, globally, we've seen, um, less LP money going into, um,funds, uh, all over the place, uh, in the U S specifically in Europe, etcetera, and China even, uh, how do you, how are you feeling about the liquidityin venture capital here in our region?Hasan Haider: Oh,it'scrap. We don't have a lot of liquidity. Um, we have a limitedpool of LPs that are investing in funds. A lot of them are developmentallyminded. So they have these closed loops. They're like, I'll give you money, butyou have to invest in my market, which doesn't help the region. And the regionis the big enough market that you need to be investing in, not single markets,right?So the region needs to emerge to bring everyone's attentionhere. Not one market emerges to bring everyone's attention, right? So I'm very,very strong proponent of MENA regionalism as an ecosystem rather than, youknow, single market. Ali Zewail: couldn'tagree more.Hasan Haider: Yeah, Ithink you end up with a lot of distortions in local markets when things arehappening because X amount of money is earmarked for X country or X whatever.Um, so the, there isn't a lot of capital that's available to usas fund managers. And because of that, there's not a lot of capital availableto startups. And because of that, there's Not a lot of startups that are ableto scale to huge valuations and huge rounds. So we need more, um, financiallymotivated LPs to be active in our region.And I think that's what we're missing. We don't have a broadbase, a broad enough base of LPs. for our ecosystem yet. It's better than itwas when I got started when it was zero. But now it's still only a handful. Andif, and if that handful says no, for whatever reason, then you're stuck. Youcan't really raise the fund or do anything.Um, so yeah, I think, I think that's something you, the U. S.Really emerged and you started to see more capital go to venture capital as anasset class. Uh, when they, then when they liberalized where endowments Pensionfunds could start investing. Initially, they said 3 percent could be forriskier assets, etc, etc, etc.We have not seen endowments and pension funds be active playersin our ecosystem. We haven't seen insurance companies be active players in ourecosystem as LPs. Um, we haven't seen. A large number of family offices, youknow, places like Europe, they incentivize family offices to get involved byoffering tax incentives and things.So we haven't really got that. Um, I think that's what we'remissing. We're missing a broad pool of LPs investing in venture capital and inour region. And if you ask a lot of the funds that have raised 100 million forus, a large amount of that money comes from outside the region.Ali Zewail: Yep. Yep.Uh, that's true. And uh, so I mean, since we're on this track,uh, what do you think are the regulatory changes and legislative changes thatcould be useful for the, for the, governments to do in the region?Hasan Haider: I don'tknow. I guess changes to where the pension funds are investing, uh, changes towhere the sovereign funds are investing. Not big changes, but here's a pool ofcapital that's deployed into our local market in BC. Here's a pool. Causethere's so many sovereign funds, but most of them are like, Oh, our minimumcheck size is bigger than your fund.I was like, your minimum check size is bigger than any fund inthe region. So there needs to be like these programs that are developed. Tofinancially invest in, in, in VC funds. I think Qatar is doing it with QIA. Nowthey started. Um, and I think we need to see more of that. Mubadala has beendoing it for a bit and are restarting that program.So you need to see the sovereign funds come down to support theecosystem to grow, uh, from a financially motivated perspective, we probablyneed to see endowments and pension funds do similar thing as well, investlocally and sort of this asset class, um, and maybe utilize tax breaks orwhatever for family offices or companies that are investing in, in VC as anasset class.Um, so you motivate them to be active, uh, through that path,maybe, I don't know.Ali Zewail: Exactly.I mean, they can at least, uh, write it off if it loses. So that, you know,removes the risk, for example, Hasan Haider: Okay,instead of paying this a task as a tax, there's a chance, there's zerodownside, but there's a lot of upside. Let me, let me do this thing Ali Zewail: Exactly. Hasan Haider: VC.Ali Zewail: Yeah. Uh,agree again. And, uh, okay. Go thinking about the technology side of things, ofcourse. AI is all the rage, uh, all over the world, but maybe not every, um,maybe it's not in every way suitable to, for startups in the region. Uh, or,you know, there, there are certain styles of AI use that would be moresuitable.What are your thoughts on that?Hasan Haider: I thinkit's all BS. Whenever someone's pitching me AI first, it's like, whatever. Likeyou just wrap around chat GPT. That's not a real business. Right. Uh, so I, Idon't, I, whenever there's a trend and everyone's jumping into something, I'mone of those people that says that the sidelines are like, wait. This doesn'tmake sense.I'm not jumping in with all of you. Um, the same thing withlike web three and blockchain and like whenever there's, you know, the, the,the hype cycle of the season, I'm always more cautious and I won't really jumpin until. Either I've already invested like I did with fintech, like I wasinvested before fintech was a thing and the hype cycle, like caught up to me.I was like, Hey, this is nice, or I haven't invested and I'mjust not going to deploy when valuations are stupid and people don't reallyknow what to do. What they're throwing money into. Right. Um, so yeah, wheneversomeone pitches me AI, like, honestly, I was like, whatever. And then I waslike, what are you really doing?And so there's a lot of like, fake things out there that saythey're they're AI for this or AI for that, but it's all bullshit. Um, and so,yeah, I don't, I don't follow those trends. I think AI is it. I think AI isgoing to be a super important tool for us all to use in our day to day lives. Ithink it's going to be similar to how word processors came about, how theinternet came about, all these sort of things.Like it'll be a tool that we use, but just saying I'm an AIbusiness and doing XYZ, like it's, it's all, it's all made up. And especiallymost of the startups in the region are not really AI. Having said this, Iinvested in a couple of companies that became, that when I invested, I used tohate using the term AI.I would be like, It's a machine learning company. It was, so I,I, I'd never used the search. They, they're, they're a machine learningcompany. They're using machine learning X, Y, Z. Uh, but, but then noweveryone's like hyped AI. I was like, yeah, we've invested in AI business here.Like give me thepremium for that. Uh, so, uh, again, like I, I really hate that part ofAI. Tech where everyone just becomes like all that herd mentality and everyonepiles onto something just because it's the cool thing this month or whatever. Ihate that. Um, and so we, we will, we will still invest in things that use AIor whatever, but I'm going to invest in them from our basics.Like we, We're going to invest from our core, like greatfounders. Yes. Building something real. Yes. With the real traction. Yes. Okay.Well, it's an AI. Okay. I'll go, I'll forgive them for that, but it's okay.Like let's invest in Ali Zewail: yeah. Hasan Haider: thatsort of stuff.Ali Zewail: Yeah, theway I put it is like, it's like in the, when the internet first startedspreading, people used to say in their startup pitches, we use the internet,you know, and nobody says that it's, it's just a tool there. So I mean the AI,it's, everybody's going to be, have an AI component or develop their code withAI.I mean, that's not, it's, uh, it's going to be like that, butthere's always this cycle, the hype cycle. And, uh,You just gotta live with Hasan Haider: use themobile phones, We use cloud. We use we use web 3D, we use, Oh, it's terrible.Yeah.so yeah, forget that. Like I, I really, I'm not, uh, I'm notone of those people that will just follow the hype. It's like, Oh, AI is reallygoing to change the world. Yes, I think it will. But most of the investmentsthat are in AI now are probably going to go to zero.So no, thank you.Ali Zewail: As manystartup investments will. So, um, you've invested maybe in over 200 startupsover the years. Uh, if you could go back to your younger self and give yourselfadvice about startup investing, what would you tell it?Hasan Haider: Oh, Idon't know if I could give myself advice because the thing is like, um, I thinkventure capital is something. You learn by doing it's learn learning throughapprenticeship sort of program. Like you can't go to a course and then, Oh, Iknow everything I need to know about a VC and consulting companies.No, it's like. You learn under someone's tutelage and they,they teach you with their experiences and et cetera, et cetera, et cetera. So Ithink that's how VC is as an industry right now. It's a, it's a apprenticeshiplearning model, right? So you learn from someone who's done it before. So Iguess I could go back to myself 10 years ago. And be like, Hey, here's all the thingsthat I've learned and apprenticed myself. But that's like. A paradox, I guess,in time travel. Uh, but no, it's, it's like over time you learn all this stuff.There's things that I would tell myself. I was like, look, these are falsepositives where someone worked, where they studied, those are false positives.Those are not really signals that things are going to succeedor not. Um, uh, Yeah, I don't know.Like, I think Ali Zewail: redflags.Hasan Haider: I'vebeen pretty good at spotting red flags. Uh, we've avoided some big ones. Um,but obviously now I know everything. I, I, I, I just go back to my, my, my pastself and tell them invest only in these companies and then I'd win. That's it.Ali Zewail: Yeah.That's, that's one way of doing it. It's the best way to do time travel.Hasan Haider: I wasjust like, here's a list, put money into these companies. You'll thank melater. And then that's it. But I can't, I just don't think it's time travel. So, so I'vegot to invest in a broad portfolio. Like that's the only way to make sure Igenerate returns regularly.Ali Zewail: No, Imean, I think that's good advice. Just, you have to do it and you have topractice at it and you know, things will get clearer. Um, and don't, and avoid your biases. Like, yeah, exactly. Learn by doing and mentoring ifyou can. So what do you, what do you think are the personal characteristicsthat made you want to be a VC or that helped you as a VC?Hasan Haider: I thinkI just don't have any other marketable skills. Uh, no, I, I think, I think, um,I think, uh, I, I like to learn about lots of different things constantly. I'mreading constantly about lots of different things. Um, and so I, this. That'spart of it. It's like, I'm not just stuck doing one thing. I'm helping lots ofdifferent companies with lots of different things and lots of differentsectors.I'm learning constantly from the founders that we're investingin. I'm picking up those lessons. I think that's what it is. Like venturecapital is a constant learning journey and you got to read and you got to talkto people. And I think those are the two skill sets that are really, reallyimportant in VC.So talking to people to make sure you build the rightrelationships. So you kind of know what you're talking about.Ali Zewail: Yeah.Hasan Haider: thinkthat's simplified, Ali Zewail: importantskills.Hasan Haider: yeah,Ali Zewail: And whatdo you think are the, I know you're a sector agnostic at PlusVC, but are thereany sectors that you think are really promising in the region?Hasan Haider: no, Ithink if I tried to predict the future, I would fail. So I don't try to predictthe future. Um, honestly speaking, we invest in great founders and theneventually. The markets catch up to them. We invested in FinTech before FinTechwas even a word. We invested in a few AI businesses before AI hype kicked in.We invested in, uh, e commerce companies and a bunch ofcompanies and logistics and whatever, like we invest before the hype kicks inand then suddenly, you know, it's great. So, um, I don't pretend to know thefuture. I do not like. predicting what sector is going to be cool now or later,because it really doesn't make a difference.Um, as long as we invest in good founders. A, they'll executesuper well and be a great company regardless of whatever people are sayingabout what sector is hot or not. And B, eventually, good, you know, they'll endup in one of the sectors that are hot right now and stuff like that. So I, it'slike, that's a question where I usually, like, there is no answer to it becauseit's all made up based on your own biases.And I, like, I don't have those kinds of biases. I really don'tknow what's going to be the next thing. Yeah,Ali Zewail: will tellus.Hasan Haider:exactly. They'll figure it out.Ali Zewail: Sowhat's, what's the quickest investment decision you ever made? Can you tell usa story about that?Hasan Haider: Uh, Ipick decisions pretty quickly. So in my head, like within the first 10 minutesof a conversation, I've already decided whether I want to invest or not. Uh,but I, I go through the process just to make sure there's nothing I've missed.There's no flags or anything like that. So I'll never like. I'm in, uh, wheredo I sign?It's in my head I'm in, but let's go through the process andmake sure that it's all there. Right. Like, um, but generally whenever it's afounder that I've already invested in comes back to me and they did a good jobfor me, or they, they had really good. Um, ethics or whatever working with me,I would probably follow on and invest with them again. Uh, the, the other thingis if it's a referral from certain parties, it's usually an easier yes becauseI trust that they've invested and they, I've, I've done well investingco-investing with them. So I'll probably co-invest with them again. Uh, butit's never, I will never say to anyone, okay, I'm in, in a first call like.I will, I will, I'll be in, but I won't tell anyone that. Okay,man.Ali Zewail: Right.And have you learned like with experience to trust your intuition more in thatrespect?Hasan Haider: Ohyeah, for sure. I've learned what not to do and which founders not to bebacking. Uh, it's a constant iterating process. So you keep learning fromeverything that you're doing, but yeah, I've learned what sort of founders tobe looking for a lot better, I've learned. And venture capital is one of thoseindustries where you're kind of, I love data, but there's not a lot of data togo on at the early stages.You're kind of investing in people. And so how, what kind ofpeople is, you just have to learn through, through experience, I guess. Ali Zewail: And inthe region, I mean, the, the, an important thing for startups, you have to haveexits, right. For, for, uh, for money to be returned to the LPs. Uh, yeah. Whatare the different exit options you see in, uh, are they. Are there more thingsappearing on the radar?Hasan Haider: for us,it's pretty cool. Cause we're seed stage investors, right? By the time I get astartup gets a series B or like a hundred, 200 million valuation, we're alreadydoing pretty well on our investment by then. And so. What we've seen in theregion is there's usually a pretty active secondaries market at the later stageUm, whoever is coming in at that stage wants to acquire as much ownership aspossible and wants to buy out some of the earlier investors So liquiditythrough secondaries is something that we've seen and we've actuallyparticipated in Uh locked in 31x on one deal through secondaries 17x on anotherdeal through secondaries And I think that's My best performing deals areprobably going to be secondary sales, uh, rather than M& A sort oftransactions, because as a seed investor, I don't have to wait until the IPO.I will wait till the IPO for some deals, but I'll start takingprofit on the way there, you know?Um, so secondary is definitely going Ali Zewail: of theposition or the whole positionHasan Haider: Partof the position, not whole, eh, take money on the way up, Ithink, you know, take a little profit. Why not? I 30 X is okay. You know, can'treally complain about 30 x 17 X is okay.You know, , very good deal. Um, Ali Zewail: So Hasan Haider: so. Soyeah, that's our thesis on secondary. So as a seed fund, I think that's a greatopportunity for us. Uh, later stage investors use A and B. I think you'reseeing more liquidity options emerge. You're starting to see private equityplayers start to come into our region, which is not always a great thing, butmaybe this case might be okay when they buy us out and then they screw up thecompany, but you know, so they don't screw up the company while we're still init.Um, and we're starting to see a lot more liquidity coming inthrough the stock market. So we. We've seen some pretty good exits, especiallyon the Saudi stock market. So Jahed, Hassan and a few others. So I thinkthat's, I have probably three or four companies in my past portfolio that arelooking actively at IPO ing in the Saudi market right now.Uh, if you'd asked me this question like 10 years ago, I'd belike, there's no way that any of our startups are ever going to be an IPO. Butnow I was like, yeah, it's in five companies that are probably going to IPO inthe next year or two. Um, it's, yeah, it's, and then the UAE as well. There's onedeal that's looking at IPO ing on the, in the UAE as well.And then Egypt is another option that's there available. If Ialready did the IPO, there might be other startups that can probably IPO onthat local market. So I think you're starting to see more and more IPOs. Thething we're missing is large M& A transactions. We don't see thecorporations buying into startups very much and especially not at a largerscale.So I don't know how that's going to turn out, but maybe that'sa path that's going to come at some point. But yeah, my whole case is whenever anyone was asking me, butthere's no exits. I was like, there will be exits. It can't not ever be exits.Like the ecosystem is, Emerging and evolving and the exits will come.Like it's gonna happen. Uh, and you just Have Ali Zewail: Havefaith.Hasan Haider: justlike it's a natural evolution of whatever. Like it's Ali Zewail: Yeah. Hasan Haider: SoAli Zewail: So. Goingback, I mean, to the nitty gritty of your work, I mean, early stage valuation,one way of looking at it is you work back from the exit valuations and you, tosee what's a reasonable, uh, early stage, uh, valuation. So putting that inmind, is there, do you see a balance between current seed stage valuations,especially in the hot markets like Saudi, uh, and UAE, uh, versus the potentialexit valuations?Hasan Haider: no,Saudi, especially in some of the there. I think there is a massive disconnectbetween valuations at seed and valuations. It's serious. A and B and stuff likethat. Valuations. The seat just didn't make any sense. And I think there'sstill some deals that are happening that don't make any sense when you look atit.You look at the metrics, like, okay, you're investing nowbefore any metrics, before any really thing, things are happening. In order tojustify that valuation, what metrics do these startups need to get to? And mostof the time, the answer is like, Oh crap, they're never going to be able toachieve those metrics in the next round.And so I think a lot, there's a lot of inexperience that's inthese markets that has driven up valuations to a level where they're just notgood investment opportunities, right? If I'm investing in a company, I'd see itat a 30 million valuation, and they don't even have product or anything rightnow, like, For this startup's next round to be at a 100 million valuation, arethey going to be able to achieve those metrics for me to get at least a 3x, youknow, write up?And the answer in most situations is no, like no one's reallythought through that. Uh, they're just like, oh, it's hot. Yeah, let's invest.It's okay. It doesn't matter what price we think as long as it's unicorn. Andthat is bullshit. Like it, of course it matters what price you pay it. I hatethat. It doesn't matter what price you pay, as long as it's a unicorn, becauseit does matter what price you pay.Most startups aren't going to be unicorns. And so if you'regoing to exit at 100 million valuation, and you paid a valuation of 30, you'redoing 3x on that deal, and that's crap. Uh, it's a 100 million exit, and you'redoing 3x. What are you doing, right? So, and if you invested at a 10 instead,you're doing maybe 10x on that deal, right?Uh, these are not taking into account dilution or whatever.Like if you take into dilution, put those numbers in half. Uh, but like, butlike, it's like, it's a three X versus a 10 X exit at the same level. So theprice you pay is entirely in your control when you're entering. The exit valueis not in your control.So you need to maximize and make sure that you are paying theright price for that startup at this point. Uh, Ali Zewail: But let Hasan Haider: that'smy rant.Ali Zewail: me playdevil's advocate and say the price you pay isn't really in your control becausethere's a market out there. There are other people willingHasan Haider: No,it's definitely Ali Zewail: thatprice. Hasan Haider: peopleare stupid, you can just not pay that price.Ali Zewail: You'llhave to miss the deal basically.Hasan Haider: it'sfine. I will, I will miss the three X deals. So what? Like no big deal, right?Ali Zewail: Yep. Hasan Haider: Notgoing to be, it's not going to return my fund anyway. Right? So, so it's, it'scrap. Like, no, the price you pay does make a difference.And so you need to be conscious. You need to be investing atthe right valuation and make sure the startup can grow into the next valuationand the next valuation after that. And startups are shooting themselves in thefoot by you. Taking these, they shouldn't be taking money. These valuationsbecause their next round will be a down run.And we saw that we saw so many down rounds last year in 23, somany down rounds, no one was talking about it. Yeah. It's a bridge round. It'sa flat round. No, there's so many down rounds, uh, just for these startups tobe able to survive because they, they didn't grow into the valuations thatthere is that like, so no. Not Ali Zewail: did this.Hasan Haider: good for anyone. Right. So I've taken advantage of it. I've invested in a couple ofdeals that came, did down rounds. I was like, actually now your valuation makessense. Like they had one year, they burned through other people's investment.They got pretty good traction, but it's at a lower valuation than what theywere raising at a year ago.I'll invest. Why not? But it's not the best position to be inas a founder. You need to be really cautious. I need to make sure that you'veplanned it out. You're like, okay, I'll raise it. X valuation. Now I'll raise Xamount of money in order for me to raise the next round at a two to three Xminimum right up.I need to hit X amount of traction. Can I hit that with themoney that I'm raising? Yes. Great. Okay. Let me do this deal. If it's a no,then you need to think about how much are you raising or what's the valuationat? And usually the, what's the valuation at is a much easier factors tocontrol control than how much are you raising.Right? So, yeah, it's, it's one of those thingslike Isaid no to a lot of deals because the numbers just didn't makesense in 21 and 22. I was right. And so I thought I was crazy at some point. Iwas like, am I wrong? Like, should I be paying these stupid valuations? I wasseriously like, Considering that maybe I've just become too old in thisecosystem.And like, I remember the days when deals were sub milliondollar valuations. Right. So I was like, am I just a dinosaur? Am I like out ofit? I'm like, am I expired? And thankfully, no, like everyone else was wrong.Ali Zewail: Nowyou're feeling good.So if you could, if you could wave a magic wand and, uh, change something aboutthe regional ecosystem, what would it be?Hasan Haider: itwould just be the availability of LP capital. I think that's, it all flows downfrom there, right? Like if you want to build a strong ecosystem regionally, youneed a broad pool of financially emoted LP capital investing in RE, and that'snot there. If we get that, then all the other things would get fixed, uh,because financially motivated is a key one because they wouldn't invest inmanagers that don't know what they're doing, but they might invest in emergingmanagers if they had someone help them and support them and they guide themlike it is guidance that's needed.You don't just give someone money and let them learn. Give themmoney, give them a bit of guidance and let them learn that way. Right. So Ithink that would, so large pool. Financially motivated LPs would fix a lot ofthe things that are, that I think are fixable. Ali Zewail:Absolutely. LP money is always good for, for, for an ecosystem.Hasan Haider: Yeah.But it's, it's a broad pool. It's not just one singleAli Zewail: Yeah,exactly. Hasan Haider: betypes of LPs, lots of different mindsets. and all financially motivated. That'sthe key thing.Ali Zewail: That's agreat point. Um, so do you take board seats?Hasan Haider: I trynot to, I hate taking board seats, like waste of time. Uh,Ali Zewail: but, butyou do sometimes, I mean, do you choose to, I was going to ask you about whatyour thoughts are on, uh, being a good board director. What's,Hasan Haider: Ohyeah. No, I've taken board seats when the founders have really asked me to takethose board seats. And, um, yeah, it's, it's only because they really asked alot and then I really want you really need you. Then I eventually give up, givein and say, okay, I'll sit on your board. My role as a board member is usuallyreally to support the founders Uh, to make sure that they're going in the rightpath, they have a smooth board, everything's working well.Um, that's what I would do, but honestly speaking at seedstage, it's stupid to take a board seat. Like the company is not even fullyformed. Like what are you going to hold them accountable to? So yeah.Governance is super important, and I think that's something that definitelyneeds to be there when you're playing it.Series A and B on higher than that one. There's millions ofdollars at stake, but it's each stage. These startups aren't even fully formed,right? So they need the ability to to pivot to figure out things. Uh, and allyou're getting yourself into at seed stage is a headache. I used to take boardseats at seed and I don't want to do that again.It's just not worth it. So we afford, we provide as much valueas we could on the board, but we just don't take that seat. We tell you, we, weguide with, we support with fundraising. We support with guidance, whatever youneed. We're here. We're present for our portfolio companies. But I don't wantto sit once a quarter like what value am I gonna give at that stage?It's useful like I want more regular Interactions. Let me helpyou when you need help rather than let's sit on a board and meet every quarteror whateverAli Zewail: yeah, itmakes sense of course, with, with your huge, uh, portfolio. Uh, what are thecharacteristics of the best investors that you, you've seenHasan Haider: I don'tknow. I think best investors I think the best investors play two roles. One ofthem is support the founders to get to where they need to go. And that's in twoways. One is, you know, provide the resources, but also the guidance and thehelp. And, you know, just the mindset that the founders need to get to wherethey need to go.Um, and sometimes that's like tough conversations, like, Hey,why aren't you? What's going on with growth? Why haven't you expanded intoSaudi yet? What's stopping you? Oh, yeah, your product isn't ready yet? Well,you didn't even have a product when you launched in your home market, so whyare you taking so long?Just go, like, kick your ass and get into that market. Like, beuncomfortable, you know? Um, A board, a board member should never tell astartup what to do. They need to be there to encourage, advise, and help thefounders to find the answers themselves. I think that's the, uh, and hold themaccountable for the questions that they want to ask.And I think that's, that's important at the early stages andlate stages. It becomes more of a, you know, you've got to, it's a financial fiduciary you've got to do with governancestuff. So it's different board roles at different stages, but at the stage,which I like, it's. It's really that you're going to just hold them accountableand be there to help them get to where they need to go.Ali Zewail: Okay. Solet's start getting ready to land this plane. Uh, maybe we can do some, uh,quick, uh, questions to wrap up. Uh, the first one is what book do you like to,or books do you like to recommend to others?Hasan Haider: Oh, uh,I read mostly science fiction books. I don't know if people would really like,uh, the selection, you know, like, and they're old books, like Dune and stufflike that. So I really love old Asimov series, like any, like, very geekyscience fiction stuff. Um, even like Douglas Adams and all these sort ofthings.So, but anyway, like, Um, for VC stuff, I guess, you know, thehard things about hard things is pretty good. Uh, you know, uh, I don't know.There's a lot of really good books. I read a lot, so I don't need to have,like, one book. And I guess the real suggestion is read a lot of everything asmuch as you possibly can.Like, read short articles about everything and, like, that'sit. It's probably super valuable now.Ali Zewail: Uh, okay.Second question. How do you unwind and how do you stay like, uh, energized?Hasan Haider: Oh, I,I watch a lot of TV and movies. So that's, that's, that's pretty much it. Ali Zewail: love thatsince your first startup.Hasan Haider: Yeah.I'm always gonna love that. I guess my. That's my thing, TV and movies,especially science fiction shows. I'm a geek, so like, I love that stuff. Iused to read comic books, but I don't have as much time anymore as I used to.There's some really good comic books out there, like super,super good ones, like Sandman and stuff. Um, but I just don't, I don't havethat time to read those. So I read the other stuff, which is useful, and not somuch the comics anymore. Ali Zewail: Yep. Yep.Hasan Haider: playvideo games with my kids, that's always fun.Ali Zewail: That'sfun. Um, That's actually a lot of fun. So who do you think we should have as aguest on the podcast?Hasan Haider: Uh,everyone,Ali Zewail: Anyexamples? Yeah,Hasan Haider:probably reach out to some of the top founders that have been able to reallyget their companies to a hundred million plus valuations, and I think a lot ofthem haven't really told their stories as much as they should, uh, and there's,I can give you a list of 20 of them that if you'd like, uh, but yeah, I think,I, I think we're not seeing those stories as much as we should.We're seeing some stories over and over again, but we're notseeing all of the stories.Ali Zewail: you'reright. So what question should I have asked you that I didn't?Hasan Haider: Uh, Idon't know. I talk quite a lot. So I'm pretty sure I answered questions youdidn't even ask. So, uh,I don't know. Yeah, I think you answered my questions. Allgood.Ali Zewail: Uh, so Ilike to always wrap up with, um, on a note of gratitude. So what is a giftsomebody has given you? That has made a positive impact on your life.Hasan Haider: I thinkit's time. I think it's the mentors that really gave them, gave me their timeand their attention. Uh, you know, Sami Jalal, Fawazel Ghaslaibi. Dave McClure,like, they've all really, um, it's that time and attention that's helped morethan anything else. I think that's really the key thing. Um, so time is themost valuable gift.Ali Zewail: Yeah,time and their wisdom, sharing their wisdom. That's a great note to end on. Weshould all be trying to spend, you know, some of our time helping others andsharing our wisdom with them. And with that, thank you very much for your time,Hassan, and for your wisdom. for coming on the pod.Hasan Haider: Thankyou for having me.Ali Zewail: Thankyou. Thank you for listening to this episode of startups Arabia podcast. Ifthere was something you really liked about what the guests said today, reachout to them on social media and tell them what you liked. And of course, if youhaven't subscribed yet, what are you waiting for? You don't wanna miss any ofour great upcoming episodes.Also, please rate us and give us comments on our social mediaaccounts so that we know how to improve. And also tell us what you like. Wedon't mind hearing that either. Until next time, this was your host Addie'swhale.
