#4 Ways Entrepreneurs Can Find Investors To Finance New Projects "Investors will always look for entrepreneurs who show readiness to spend money and have 'skin in the game'"
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The Indian start-up scenario has turned vibrant in the recent years with total venture investment in the sector from 2005 to 2010 being touted to be around INR 1,11,700 crore.
The 8th Annual Report on Indian Venture Capital and Private Equity on Start-ups stated that average yearly rate of increase in the investment flow during the phase had been close to 42 per cent while more than 10,000 start-ups had received funding.
But the picture is not that rosy as far as funding is concerned. The average annual rise in the number of funded start-ups in the last decade in India has been 16 per cent, a figure far from being satisfactory.
The percentage of global start-ups that are able to effectively raise capital in healthcare, grocery and smart home and home improvement are 41, 52 and 36 per cent respectively. The corresponding figures in India are dismal at 5, 10, and 11 per cent respectively.
Why is it that only a handful of entrepreneurs get funded? Is it that only those few business ideas are good enough to succeed?
For a logical explanation to this deadlock, the Entrepreneur India got in touch with Raghav Kanoria, founder and partner at Neoleap Business Ventures LLP, and cofounder at Calcutta Angels Network.
Being an active member of the angel and investment community in the country, Kanoria shared his insights on finding means to address these issues that could also significantly improve the exchange of viable, creative ideas in the country and have a dramatic impact on our economy.
"Venture capitalists and angel investors are flooded with pitches and hardly have time to meet with everyone. Besides, first-time entrepreneurs also need to explore opportunities with more than 50 funding agencies before closing on one. As an entrepreneur, it is important to identify a number of agents, who could take interest in your idea. The bright side is, today a host of resources exist to assist you find the best investors," Kanoria pointed out.
According to him the most important job for start-ups and investors is to find the right "match'. "Ideally a person with domain expertise in the sector should be the lead investor. However, investors will always look for entrepreneurs who show readiness to spend their money and have 'skin in the game'," Kanoria added, recommending some useful tips for fixing meetings with the right people.
Association With Accelerators
"Accelerators can help you find mentors and with the help of their network, they will connect you to right investors A lot of accelerators curate start-ups and then pitch for them to relevant investors in their angel group," he said.
Through E-cells Of Universities
At the initial stage, e-cells of colleges and other education institutions provide support to students in finding right investors through their alumni. E-cells of colleges are connected to the relevant alumni base. For example, IIM -Calcutta has an active alumni outreach programme for the same.
Through Conferences/Hackathons
Angel networks, company-run conferences, business competitions and hackathons can be arranged where investors are called in, he said and added that a starter can look for opportunities or hear about them only by taking part in such events. Such occasions serve as gateway to potential investors and also help in future networking. "If not funding, your idea will be heard and will receive suggestions for way forward in getting funds," he opined.
Through Chambers Of Commerce
It is a good start to be registered with chambers of commerce and make use of their platform to find investors. Chambers of commerce like FICCI, CII, ASSOCHAM, NASSCOM and others hold a lot of events, seminars and symposiums where start-ups can meet potential investors.
