Network to Succeed

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Browsing Venture Funding

What can the budget do for the angel ecosystem?

February27

Saurabh Srivastava has beautifully articulated a set of core recommendations which should go a long way in encouraging the angel and entrepreneurial ecosystem in India. He argues for a thriving MSME sector we need to create a policy environment that would encourage the creation of more seed funds or early stage funds.

Couple of highlights from his post on YourStory.in

- Getting higher equity participation to facilitate better debt-equity mix;
- Encouraging MSMEs to go global and increase their exports;
- Entering into foreign technical collaborations for improving competitiveness.
- The government could have a program on the lines of the highly successful Yozma scheme which was responsible for triggering off early stage funding in Israel, by using some public funds to create more early stage venture funds in the public private model. Similarly, some public funding could be used to help spawn more business angel groups in the country to complete the entrepreneurial ecosystem for nurturing SMEs.Setting up of a separate SME Exchange or platform in an existing Stock Exchange to provide exit route to an angel or venture capital investor, along the lines of AIM, UK.

- Allowing listing of angel/venture capital Funds on the existing Stock Exchanges. This is critical as such funds invest in a seed stage company which is unlikely to be able to go public or be large enough to be acquired in 3 to 5 years. However, the typical portfolio of 15 or 20 investee companies of such a fund would collectively have the required valuation net worth and listing the fund would provide a return to the investors thus encourage more such funds to come up.Besides this there are non-financial issues like liability of an individual Director on the Boards of angel or venture capital Fund which need to be addressed.

To read the complete story, click here.

Investor Focus:One97 Mobility Fund

February8
One97MobilityFund

One97MobilityFund

The One97 Mobility Fund (OMF) is a $100 million fund set to support entrepreneurs who are making, or are ready to make game changing companies in the mobile ecosystem.

Lead by One97 Communications is a leading full service multi-range VAS firm in India with the best team of employees, customers & investors behind it.

They have already invested in two companies:-

1. Oorja
2.Tencube Pte ltd

Would be happy to provide relevant connects to anyone looking at raising money in this space.

For more information on the fund click here

Venture Capital & Basics of Creating a Business Plan

January10

Last week I was invited by TiE Delhi to conduct a small workshop for school students on business planning and venture capital. I highlighted how essential it is to translate an idea to paper as one of the first critical steps towards building a comprehensive business plan & vision path for an entrepreneurial venture.

The journey from being a mere idea in one’s head to paper is not an easy one, as it forces the entrepreneur to think with clarity, logic & see the opportunity in its totality. The presentation also covers some of the aspects on venture capital – their objectives, how they invest and more importantly the essential ingredients that go into structuring a business plan.

For the complete presentation click on the link below:-

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Raising Venture Funding – Kick Starting The Process!

May28

I have had the privilege of meeting many high potential entrepreneurs from diverse backgrounds and entrepreneurial journeys – yet one of the most universally acclaimed challenge which consistently resonates with all of them is the issue of “Venture Funding”.

“Venture Funding” for a lot of entrepreneurs represents the epitome of entrepreneurial success & defines in their minds the difference between success & failure- The reality however is very different, funding is not the bee all & end all of all entrepreneurial success its merely a step towards faster growth & greater scalability both which can be achieved without funding as well, in fact there are countless examples of entrepreneurs who have boot strapped themselves & have made their ventures successful without any funding!

While most of us have heard investors talk and write about what they look for in a business plan, the focus of this piece is hopefully to give you a more holistic perspective covering both the stakeholders in the funding game i.e. the entrepreneur and the investor.

Venture Funding for you?

The first thing for you as an entrepreneur is to actually understand why you should go in for venture funding & what does it actually hold for your venture:

  • Expensive Capital-For an entrepreneur venture funding is one of the most expensive capital out there –Let me illustrate with some data points, for a typical early stage startup, it costs 25-35% of the startup for $1-3 million of investment.  Comparatively, a $ 2 million debt at a 10-15% interest rate, costs $200-300k in interest yearly, much cheaper if you assume the startup will be worth $10 Million in 2 years.  The major challenge faced by most entrepreneurs is that most banks won’t provide $2 Million of debt capital to a young startup entrepreneur. Banks typically look for established entrepreneurs with a proven track record of successful operations backed by stable cash flows before they will even consider evaluating a proposal for debt.
  • Higher Returns-The reality of venture funding is that investors participate in this game for getting higher returns on their investment- for them it’s a high risk & high reward business. Investors do not invest in you because of charity or for good will, they may like you as an entrepreneur but more than that they believe in your potential to excute – this is important for entrepreneurs to understand, investors invest in your business and because they believe you have the potential to scale the business which in turn will give them higher returns of course!
  • Size- Venture money is right for you, if you are looking to build a big business; Rohit Agarwal CEO techTribe describes a big business as $20 million dollars over 3-5 years and ideally a $100 million dollars business over 5-7 years. In fact more often than not I have heard several investors’ especially international investors crib as to why entrepreneurs just can’t think BIG.  Investors look for big opportunities and are not impressed by a small market opportunity no matter how good the idea may be.
  • Exit- Your business can go public or be acquired for a very large amount, remember investors are investing because of returns which can only be achieved with a successful exit.
  • Involvement- Venture funding can entail significant involvement from investors on strategic operations of your business and key decisions, as an entrepreneur you need to prepare for a change of mindset from being a single owner who is completely in charge to being a more accountable CEO of the company, the magnitude of change is case to case.

Seeking venture funding essentially means you are looking at a scalable business and are willing to take the necessary steps to grow quickly which include and not limited too a robust infrastructure, high potential talent base, sustainable  processes and structures which are needed to support a scalable business.  Venture funding is quite like a marriage, you need to carefully choose the right partner who matches your overall mindset and vision for your company.

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This is a forum for entrepreneurs and professionals to connect, learn and grow with each other. The objective of this blog is to give you access to relevant resources, business opportunities and networking opportunities to enhance your entrepreneurial and professional lives.

About Author:

Digbijoy has a wide ranging experience across diverse sectors, initially started his career in education marketing with reputed educational institutes and then subsequently joined the advertising and events industry to execute several projects including a state election campaign for a national party, conceptualizing and running a restaurant chain in Delhi and several other projects.

He joined the Delhi chapter of The Indus Entrepreneurs (TiE Delhi), where he worked for over 3 years and drove various key initiatives like mentoring, deal flow, marketing, sponsorships etc and left his last position as Associate Director of the chapter in 2008 to pursue his entrepreneurial ambitions. He subsequently joined techTribe- India largest Career Networking platform where he served as director strategic relations and drove unique initiatives and partnerships for building and sustaining community engagement. Post techTribe he co founded an online supplemental education start-up – TenMarks Education INC. which was acquired by Amazon.com in October 2013.

Post TenMarks he lead Ennovent India as its country director which is an innovation accelerator. Ennovent provide services to accelerate innovations for sustainability in low-income markets in developing countries. It specializes in helping clients discover enterprises with novel solutions, develop business models to start-up enterprises, provide finance by facilitating early-stage investments and grow operations to scale profit and impact. Since 2008, Ennovent has worked with over 4,800 Network members, 15 Circle members and 10 Solution clients to accelerate over 80 innovations in 10 countries.

Currently Digbijoy Co-leads the Startup Program for Amazon Internet Services Pvt Ltd enabling the best startups leverage the power of cloud.

Lets Connect:-
Email: digbijoys@gmail.com
Linkedin: http://in.linkedin.com/in/digbijoy
Twitter: http://twitter.com/digbijoy

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