Everyone thinks that to hit the startup, you need a funds, but that is half-truth. Getting a fund should not be the objective, it should be Plan B, in case you need it. Funding should require to scale up business and should not for building up, there might be some exception like where in prototype needs huge funds or some fintech’s where they need to keep some deposits to regulation authorities.
Everyone’s idea, plan or model is unique, agreed, but not from investment perspective. More than 2,00,000 startups / companies are registered in India every year, comparatively funds from Angel’s and VC’s are limited and not growing in that proportion. So, investors are having great choice option with their capacity and result is rejection number and percentage are getting higher so that’s why we see people talking about inactiveness of Indian investors. Out of 100 only 5 business ideas have the potential to make it big in the long term. There are many investors who can bridge this up & might be are to invest in startup.
If you have got that kind of idea and needs some funds, first try these – Family, Friends, Paying Customer, Outsourcing, Sharing economy. The best way is get paying customer.
Still if you are looking for funds then go strategically, plan it much ahead of time. Spend time of making your and your startup’s worth investing. Try and understand “What investors looks for? And What kind of investor you are looking for?”
Let me give you some insight. The major factors are, every investor has different interest, and each one has their own set of criteria. Decisions of investors may differ on the basis of facts; other’s might be on the factor they feel for the people at the situation they came from or how they are struggling to make their startup run or how they present their idea in the equation. Some may be in the right frame of mind for risk-taking; others might be playing it safe for a while or waiting to see how out-standing investments play out.
What investors looks for?
- Business Idea – Innovation, Differentiation, Value Proposition
- Business Model – Product, Services, Business Development, Revenue Source, Process
- Market Potential – Market Adoption Index, Average Ticket Size
- Scalability – Geographical, Technological, Target Size
- Team – Credential, Skills, Confidence, Attitude, Business Acumen
- Traction – Customer, Sales, Revenue
- Future Roadmap – How big and practically you are planning.
- Your Ask? – Investment Required – Too less or Too more
- Equity Offered? – Realistic and acceptable startup valuation.
- Exit Value – To compare ROI from different options.
- Exit Options – How easy or difficult will be?
What kind of investor you should be looking for?
- Domain Expertise
- Ready to Mentor
- Who can help in scaling up by providing connects, associates and opportunities.
That’s it. Yes, there are many factors unnoticed and not covered in this article. But now you have got a thread to start funding strategically.
The person behind this effort is Ms. Minal Bawane – Digital Marketing Expert and it is moderated by Mr. Yogesh Thite – Founder & CEO – Meticulous.