Ways to Impress a Leading Investor for Your First Venture Capital Fund
Entrepreneur's New Year’s Guide
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Today with the entrepreneurial wave having caught the fancy of a comparatively wider section of people, the community has increasingly been looking at beginning ventures on their own and seeking active mentorship from leading venture capitalists (and angel investors). However, with the startup sector having witnessed a boom; it only becomes a challenge for investors as well as startup owners to establish right connect and get mentored (and funded) along the way.
In this regard, two recent startups serving different sectors have managed to raise their first round of venture capital from investors such as LetsVenture, and Fireside Ventures. Although the venture capital raised by these startups is marginal (less than INR 10 crores) in their respective funding rounds, the connect established with investors; in today’s crowded startup ecosystem; proves that solving issues plaguing the vast majority is accorded utmost importance.
Connecting with investors under, to solve challenges
“It is all about sheer perseverance, coupled with a robust business model that has the right amount of expertise, quality, and the potential to grow,” states Aman Gupta, who is Co-Founder of consumer lifestyle technology startup boAt, to Entrepreneur India. Aman, along with his team, very recently managed to raise INR 6 crores venture capital from Fireside Ventures.
Aman believes that embedding the appeal within the brand is the key to connecting with equity investors.
“Our focus was to ensure ease and efficiency for customers as well as generating accurate data and analytics for our back-end support team,” states Dhiren Makhija who is Founder at Peer-to-Peer lending platform Cashkumar, to Entrepreneur India. Cashkumar recently raised a single Pre-Series A round of Rs. 5 crores from various investors on the LetsVenture platform.
Makhija also adds that alongside development of a feature-rich platform, it is also vital to showcase these clearly to investors (and mentors) along with demonstrating a long-term product roadmap of innovations.
Also, modern-day investors are engrossed in actually mentoring interesting startups, apart from conventional funding. This aspect is not an exaggeration considering the fact that boAt’s investors Fireside Ventures (with Kanwaljit Singh as Managing Partner) has also been offering expertise as an active mentor to the startup.
Benefits, of having lead venture capital (VC) firms mentor startups, include access to mentor networks of portfolio brands to enable startups to learn from industry leaders. The leadership also offers strategic advice and guidance to ensure that the brand is prepared for future funding.
Developing robust technology-driven models - Another key to getting funded
Today’s investors are undoubtedly looking at technology-driven startups with a difference. The best illustration here is Flipkart which managed to introduce the right technology-driven models at a time when people had to wait endlessly to buy products of their choice. With Walmart now having acquired majority stakes in Flipkart, more technology-driven models could potentially come to the fore.
This approach could yield results to the newbie startups as well as far as finding connect is concerned.
“We approached our complete technology stack with a very lean tech team,. Our focus was to ensure ease and efficiency for customers as well as generating accurate data and analytics for our back-end support team,” informs Makhija.
For the newbies – From a fundraising perspective
For newbie startup owners, looking at raising venture capital, there is a network effect to raising a funding round especially in the early stages.
Experts advise that founding team at these startups should persevere to convince some noted investors to create a domino effect and get others on board. While it is a long road of pitches and persuading people to the promise of this category, the pay off in terms of learning is tremendous.
“While raising funds is just a step towards your goal, believing in yourself, being open to feedback and accepting change would be key contributors to growth,” adds Makhija.
On the other hand, Aman Gupta states that for new entrepreneurs, desirous of making their mark in the technology-driven consumer lifestyle domain, getting an introduction through trusted sources to seek funding (and mentorship) is the key.
Funding thus raised could be used by startups to fund their working capital needs, and to primarily enhance their Research & Development (R&D) operations to offer state-of-the-art technology-driven solutions to customers.