Got a Funding Jackpot? The Road Begins From Here
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Off late, our business corridors hear discussions about a New India, where start-ups lead the way for economic growth, jobs, and innovation. The first step towards this New India is to ensure presence and interest from investors who trade ideas with funds. Thankfully, the investors have shown substantial confidence in the Indian start-ups.
According to a report by Tracxn, the Indian start-ups received over US$ 12 billion in funding in 2018, through 1097 rounds. However, funding is just the tipping point. The biggest challenge for a start-up is to manage the funding in a way that optimises the business growth and investor’s wealth. Here are the four top priority areas to lose your purse string:
Product Development: After all, your product got you the funding in the first place. The funds can help fine-tune the product, conduct alpha and beta testing iterations, and make it as compelling as possible. Consider setting up the dream team that will take the product to the next level. The reward of investment in product development is unarguable.
Infrastructure: Your office is not only a workspace. It is the laboratory where you and your team would test thousands of ideas, leading to path-breaking products. At the same time, we the humans need to unwind, relax, and zone out. The office infrastructure should allow people to make the most of their day. It should excite them to come to the office and be a part of the organization. Moreover, some technology add-ons like life-size video conferencing, high-speed internet, cloud storage and firewall subscription, low-cost accounting software, or smart air-conditioning etc. could make the work hours more productive.
Marketing- Do not assume that a great product alone can take you long unless the audience knows you in and out. Therefore, if you could not afford an aggressive marketing campaign so far, this is the time. Think of an ideal plan, which may include ATL and BTL activities, digital activations, and policy engagement (if necessary). When you are willing to spend some money for results, you are far more likely to succeed in the long run. The key is to define the objectives at the outset and then map the progress throughout the journey.
Consultancy: While you have mastered your product, there are still a lot of areas where you need support from an expert. Think of GST compliance, go-to-market strategy, conflict management, and presentation skills to convince potential investors, employee training and development programs, accounting, and IT support. Hiring a credible and experienced consultancy on need basis can be an extremely effective way to address these areas. It allows the team to focus on core competence while saving cost and time on other important but non-core areas. The recommendation is to pay for professional advice and you will benefit in the long run.
While there is no universal investment strategy that startups can refer, there are some thumb rules. Whichever industry the startup belongs to- it is important to differentiate between ‘must-have’s’ and ‘nice-to-have’s’.
Once this differentiation is done, the key is to make an investment plan that focuses on the first and follow it to the tee. Needless to say that financial discipline and guidance from mentors is invaluable. Starting with these rules will not only pave the way for greater wealth generation for existing investors but also a promise to the potential ones.