How to Avoid Predatory Investors and Master the Real Fundraising Process

What to Do When an Investor Demands 51% Control

Henri Suhardja, Co-founder & CEO of Titipku (YC S21), shares a cautionary tale from his early days in Jakarta. Just months before a pitch event, he met a wealthy investor who, after a brief handshake, demanded 51% ownership and full control. "I must follow my orders. You ask for 10 million dollars, I’ll give it. But I must control everything," the investor said.

Henri didn’t hesitate. He stood up and left. "I immediately realized this wasn’t the right person for us," he said. The lesson? Not every investor who offers money is a good fit. "Don’t be blinded by the number. Look at the terms. Look at the values. If they want total control, they’re not a partner—they’re a master."

"Don’t accept money if it means becoming a slave."

Many founders, especially early-stage ones, fall for the trap of seeing only the dollar amount. But Henri warns: "If they’re willing to say ‘I’ll kill someone’ or ‘I’ll jail someone’ as if it’s normal, then you’re not dealing with a business partner. You’re dealing with someone who sees people as tools."

Why Fundraising Is Not Like Shark Tank

The biggest misconception, Henri says, is that fundraising is a dramatic, fast-paced performance like on Shark Tank. "It’s entertainment. It’s not real."

He compares it to Korean dramas about startups—glamorous, emotional, and full of sudden breakthroughs. But in reality, the process is slow, methodical, and often invisible. "You’re not walking into a room, showing your deck, and walking out with money. That’s not how it works."

"Fundraising isn’t a show. It’s a relationship."

The real process starts long before the pitch. It begins with building trust, not with a deck, but with coffee. "The first meeting isn’t about showing your business. It’s about understanding the investor. What do they care about? What’s their background? What’s their impact vision?"

The Real First Step: Building Relationships Over Time

Henri emphasizes that relationships aren’t built in one meeting. "I’ve known some investors for eight years. They didn’t invest until recently. But the connection was already there."

He advises founders to:

1. Attend events and engage authentically — not to pitch, but to listen and learn.
2. Follow up with personal messages — not cold DMs, but thoughtful notes based on real conversations.
3. Let the relationship grow naturally — don’t expect immediate interest.

"You can’t just show up with a laptop and say, ‘Invest in me.’ That’s not how it works."

The first meeting should be about mutual discovery. Ask questions like:

• What kind of impact do you want to create?
• What’s your experience with startups like mine?
• What would you change about my business?

This builds trust—and trust is the foundation of real fundraising.

Why Preparation Is the Real Pitch

Henri stresses that the pitch deck is just one part of the process. The real test comes after the pitch: the data room.

"The data room is not just financials. It’s legal, operational, technical, and cultural."

He explains that a well-prepared data room shows you’re organized, transparent, and serious. "If an investor says, ‘I want to see your data room,’ and you take a month to send it, they already think: ‘This founder isn’t ready.’"

Henri’s rule: Send the data room within one hour of the request.

"If you’re not ready, you’re not ready. Don’t waste their time."

A clean, well-structured data room also helps investors spot strengths and weaknesses quickly. "If they see something wrong, they’ll ask. If they see something strong, they’ll say, ‘This is great.’"

But here’s a critical tip: Only share what’s asked for. Don’t overwhelm with extra documents. "More documents mean more questions. More questions mean more risks. And some questions are traps."

The Hidden Danger of Term Sheets

One of the most overlooked risks? Term sheets with hidden conditions. Henri warns that many startups in Indonesia believe a funding announcement means the money is in the bank. It’s not.

"Just because they say ‘we’re investing’ doesn’t mean the money is transferred."

Some term sheets include clauses like:

• "We’ll fund you only if you hit $X in revenue."
• "We’ll release the next tranche only if you achieve Y milestone."

If you don’t hit those targets, the investor can walk away—without paying a dime. And worse, they may use that as leverage to force a shutdown.

Henri shares a real case: a startup he knew was pressured to liquidate—despite running well—because the investor had a clause allowing it. "The founder lost everything. The investor didn’t lose anything."

"A term sheet is not a promise. It’s a legal document. Read it. Understand it. Get legal advice."

He advises founders to:

1. Get multiple term sheets to build leverage.
2. Never sign without legal counsel.
3. Treat every investor as a potential partner, not just a source of cash.

The Reality of Decision Speed: U.S. vs. Indonesia

Henri contrasts the fundraising speed in Silicon Valley with Indonesia.

In the U.S., after a pitch:

• If the answer is "no," they say it within 1–2 days. No follow-up. No data room.
• If the answer is "yes," they move fast: data room in a week, term sheet in a week, money in the bank in a week.

"In YC, we were funded in under a week. That’s the standard."

In Indonesia, the process is slower, less clear, and often deceptive. "We’ve had investors say ‘we’ll fund you’—then a month later, they announce they invested in our competitor."

One investor even contacted Henri every year to request data room access—just to compare Titipku with their portfolio company. "They weren’t interested in investing. They were just gathering intelligence."

"If they’re not asking for your data room to invest, they’re asking to copy you."

How to Handle Rejection Without Losing Your Mind

Henri has been rejected over 100 times. "I’ve had three rejections in one day. I woke up to one. Ate lunch to another. Had dinner to a third."

But he didn’t quit. Instead, he adopted a growth mindset:

"One rejection is not failure. It’s $1,000 in value."

He reframes each rejection:

• If I’m rejected 100 times, but get $1,000 on the 101st try, that’s $10 per rejection.
• If I get $500,000 on the 102nd, that’s $5,000 per rejection.

"Every ‘no’ is a step closer to ‘yes.’"

He encourages founders to:

1. Ask for feedback after every rejection.
2. Use it to improve the pitch, data room, or product.
3. Remember: Even unicorn founders were rejected dozens of times.

"You’re not weak because you’re rejected. You’re strong because you keep going."

Key Takeaways

• Never accept 51% control. A true investor is a partner, not a boss.
• Fundraising is a relationship, not a performance. Build trust over time.
• Prepare your data room in advance. Send it within hours, not weeks.
• Read term sheets carefully. Many include hidden conditions that protect the investor, not you.
• Rejection is not personal. It’s data. Use it to grow.
• The process is longer in Indonesia. Be patient, but stay alert for red flags.
• Your mindset shapes your outcome. A growth mindset turns rejections into fuel.