
8 years ago, I secured a 7-figure investment deal from a Saudi investor. When I got his signature on the investment contract, I thought I had made it. The investment project wasn't a big promising tech startup, but rather a solid investment in a new consumer brand that was showing early signs of success.
It was in the luxury goods segment, which just 6 months after being launched in Dubai, attracted attention and interest from several local retailers and needed additional capital to fuel new production and marketing campaigns.
When the brand first launched, I started looking for investors, asking everyone in my network if they were interested. A few people showed initial interest, but nobody followed up. My potential investor was one of them. After a few months, he called me and said, "Send me the business plan of your project again." When I did, he called me after a day and said, "I'm interested, let's have a talk."
I flew from Dubai to Riyadh, and we met. He asked questions about the product and our current position, and in conclusion, he expressed interest. The next few months, I tried to follow up with him occasionally, without being too intrusive. I also attempted to meet him whenever I was in Riyadh, which was almost every 6 weeks.
Meanwhile, our brand was making progress and attracted serious interest from one of the biggest retailers in its niche. We even secured a joint event attended by local VIPs and made our first sales.
As a result, we signed an initial partnership deal with that retailer, requiring us to supply a certain amount of our items to their stores. The deal didn't involve any payment until the goods were sold in the stores, so we needed additional capital for production.
That was the first time I pushed my potential investor. I sent him a message saying, "If you're interested, let's do it now, otherwise I'll have to go for this company on my own." In 20 minutes, I received a reply: "I'm in. Send me an agreement."
I sent him an agreement, and we had a quick call. He negotiated about our shares in the deal and successfully got me to lower my initial terms. It was crucial for me to secure an offer, and he was my only potential investor, so I agreed.
He was supposed to send money to finance the initial expenses, and this is where problems began. He had to pay for company and office expenses but failed, promising he would pay "tomorrow inshallah" repeatedly. I paid those expenses myself, keeping the shares in the company as initially agreed.
Then he was supposed to pay for production costs, which he delayed again, explaining he had issues with courts and business partners in Saudi Arabia. Again, I didn't renegotiate anything, but I did not have money to finance that on my own, so I just waited and reminded him every few days.
After months of delay, I received an email from the retailer saying they were backing out from the deal. We still had a few more retailers on the line, and my investor finally put in some money for office expenses, but still delayed to finance the production. As a result, I broke promises made to several more retailers and eventually closed the project. My investor never fulfilled his commitment.
Once it was over, I obviously tried to blame the investor, like most of the people in my situation would do.Of course I did not send him and blaming messages, but rather did that in my thoughts. Then my thinking turned to self-reflection: what did I do wrong that made him act that way?
I knew the initial amount he had to pay was not a big deal for him, even considering his financial problems he was briefly talking about. While we were meeting and talking, I saw him spending tens of thousands on luxury goods, staying in the most luxury, hotels and living the life I could not afford for myself back then. At the same time, he couldn't manage to pay the basic office and company expenses for one year.
The main conclusion I came to after that self reflection was that the key person responsible for the outcome was me. I was too eager to get his investment, which he likely sensed through my numerous follow-ups and meetings. I was too flexible and didn't renegotiate when the money wasn't coming. I allowed him to keep his shares while I was putting in money instead of him.
I treated him like a superior, which gave him the sense that I needed his money more than he needed a stake in our joint business. The outcome was logical. That failed investment deal taught me several important lessons I still keep with me today:
Always treat your partners, investors, clients, employees, and whoever you're dealing with as equals. Every deal—whether it's an investment, sale, labor contract, or partnership agreement—should always be a fair exchange, with or without money. All energy we put in through money, time, attention, and expertise counts as input, and we must get an equal return. That's the only type of collaboration that lasts.
Don't follow up on your proposals. Even with only one potential buyer or investor, the interest must be mutual and equal. If they're interested, they'll get back to you. If they're not interested, it could signal that you need to work more on your product, presentation, negotiation skills, or value proposition.
Try to make profit without investment instead of chasing investors. In the early stage of that project, I had opportunities to get small profits by investing small amounts of money, but I overlooked that and went for the big stakes.
Don't believe in promises. See people in action. If they fail to deliver, it's better to part ways as early as possible.
Don't chase big money. If you pursue it too aggressively, it will run away from you. Which was exactly my case with the Saudi investor.