The third panel at our June event CoE E-Commerce, Show Me The Money, Part 2: Investing in E-Commerce, moderator Chris Schroeder interviews Pamir Gelenbe, Venture Partner at Hummingbird Ventures, James Chan of Neoteny Labs and Elie Habib of Riyada Enterprise Development and Aureos Capital about what investors think about plans for profitability, and the ideal relationship an investor should have with a portfolio company.

On business plans, "if you knew what goes into the making os sausages, you would not be eating them. Business plans are the same," says Gelenbe. 

"If anyone pitches me and shows financials, I'll get turned off," says Chan. "I always hope that the entrepreneur shows his product first. When you can nail how you bring value to users, it's not hard to then hire an MBA to tell you how to make money."

Elie Habib [please note that the caption here is wrong; this is Elie Habib, not Habib Haddad; this will be fixed] points out that in MENA region, however, the lack of startup funding, and the fact that the investor market is still evolving means that profitability becomes important sooner. Startups have to think sooner about what the next round of investors will be interested in. 

Schroeder also asks about the ideal relationship that investors should have with their companies, and all three investors confirm that they are there to support entrepreneurs, and that investors should take a minority stake in the beginning and not seek to run the companies they invest in.

"We look for founder-led businesses," Gelenbe confirms, pointing out that giving up a majority share to an investor upfront is never a good idea.