An overview of our performance

Photo by Ian Schneider on Unsplash

Passion indeed brought us together and inspired us to contribute to the development of the startup ecosystem. Passion helped us define our values and vision. As all of these crystallised, we saw a clear path and purpose for our existence.

We believe in entrepreneurs who strive to build a better world. Our aim is to amplify their passion, skills and strategize their execution. We exist to make funding more strategic, accessible and less painful.

But passion alone cannot keep a business alive, you need revenue! Hence we spent time in finding a balance between supporting the ecosystem and closing deals. It also helps us to understand the diffusion and evolution of entrepreneurship in the country. With that said, we thought of sharing our performance information with the public. Our goal is for people to question us, challenge us, and connect us with those who share our passion for fueling the Sri Lankan startup ecosystem.

Fundraising Timeline

CrowdIsland was launched in February 2016. We weren’t able to raise any funds for the first 16 months. It took us 12 months and 6 pivots to identify a repeatable business model. And then we took another 4 months to test and validate the same. We improved our efficiency by benchmarking what ‘fundable’ means to us. This helped us to educate both founders and funders as well as streamline our processes. By benchmarking and streamlining; we reduced the time taken to make a startup investor ready to 2.5 months from 4 months. It takes another 2 months on average to raise the funds depending on the size of the round. All our legal work is managed by our friends at D. L. & D de Saram, hence closing is swift.

CrowdIsland Performance
  • Jun 2017 — LKR 4Mn : 1 angel
  • Jul 2017 — LKR 5.25Mn from 4 angels
  • Nov 2017 — LKR 20Mn from 3 angels
  • Feb 2018 — LKR 16.5Mn from 6 angels
  • May 2018 — LKR 14Mn from 4 angels (follow-on round, not considered in the total)
  • Jul 2018 — LKR 10.5Mn from 2 angels
  • Aug 2018 — LKR 20Mn from 3 angels

The Angels

While our focus is on angels, we do receive considerable interest from corporates and VC funds. However, all the funding thus far has come from angels. From what we have seen, angels also help founders mature in their decision making. Sharing operational best practices and opening doors are the key value additions they bring to the table. Given that our fundraisers fall between US$ 35,000 & US$ 300,000, working with angels makes more sense. Furthermore, we learnt that sweat equity deals, if not structured properly, can hurt the startup downstream.

CrowdIsland Performance
  • 16 unique Sri Lankan angels investing in our portfolio startups
  • For 8 angels, it’s their first-time investing in a startup
  • 3 of the angels are Sri Lankan expats
  • 3 angels have invested in more than 1 startup
  • 3 angels have invested in a follow-on round
  • Largest investment by a single investor, LKR 15,000,000
  • Lowest investment by a single investor, LKR 700,000

As we gain momentum, we’re seeing the emergence of the next generation of angel investors. The first wave of angels have laid the ground work for them to learn from their mistakes as well as best practices. We also see interest among Sri Lankan’s living abroad. In fact, 53% of the total funds we have raised have come from Sri Lankan expats. We believe this to be a good channel for local startups to enter into international markets.

The Startups

Since raising funds with us, the first two startups have done extremely well. One startup has grown 10X in valuation while the other is expanding overseas. We have now realised the value of our methodology and have productise the same. The rest of the startups continues to face their fair share of challenges as they steam ahead. The average age of a founder in our portfolio is 31 with at least 3 to 5 years of work experience. They have all spent 3 to 6 months understanding the problem prior to building a solution.

Every morning in Africa, a gazelle wakes up, it knows it must outrun the fastest lion or it will be killed. Every morning in Africa, a lion wakes up. It knows it must run faster than the slowest gazelle, or it will starve. It doesn’t matter whether you’re the lion or a gazelle; when the sun comes up, you’d better be running. Christopher McDougall