How to Seal the Best Deal for Your Series A Funding? "Negotiation with investors is all about playing hardball for the founder"

By Komal Nathani

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Pixabay

After quitting their respective corporate jobs, when two college engineering friends Nisarg and Jasmin decided to embark on an entrepreneurial journey, all they had was just an idea and nothing else. Like every entrepreneur, they had to go through the similar phase of hardships that included everything from managing finances to capital allocation in business. In September 2015, they bootstrapped the company. It was only two years later that they managed to convince India Quotient, Lets Venture and other angel investors to back them with $500k.

Indian startups attract millions of investments from the private equity funds from across the world, but it is also true that the early stage startups often end up facing difficulties in raising funds.

Entrepreneur India caught up with a few startups that have recently raised Series A funding to shed light on the dos and don'ts while raising Series A funds.

"More than Money, We Wanted a Mentor"

The Hyderabad-based eKincare, a health-tech startup secured an undisclosed amount of Series A funding from a stellar line of investors that include Venture East, Endiya Partner, Padma Shri BVR Mohan Reddy. When Kiran Kalakuntla, the founder of eKincare was asked why he chose to raise funds from a group of investors instead of opting for a bank loan or crowdfunding, he said, "More than the money, we wanted to get the right set of active investors who can help us mentor to scale."

The startup is based on an AI-powered personal health assistant that reads medical data from health records and various healthcare interventions. It also predicts health risks and provides timely personalized recommendations to beat those risks.

Another startup WealthTrust, a fast growing Digital Investment Advisory platform owned by Nisarg and Jasmin shared the same opinion on raising the Pre-series A fund from India Quotient and LetsVenture because the startup wanted to have a mentor by its side.

"They know the struggles, the dilemmas, the nitty-gritties of the how to manage a company during the early stage. This guidance to balance financial prudence and growth is very important for early-stage startups," said Nisarg, founder of WealthTrust.

Here's How to Seal the Best Deal with Investors

Most of the early stage startups face major difficulty in negotiating with investors. Negotiation with investors is all about playing hardball for the founder. The founder of WealthTrust, Nisarg advised never to ignore this point while preparing to pitch before investors. "It is a very important skill where the founder needs to work on," said Nisarg.

On the other side, the founder of eKincare, Kalakuntla advised to jot down major points like company's valuation, number of board members etc. at the time of negotiation. The facts will help you get quick responses.

Dos and Don'ts Startups Should Follow while Pitching to Investors

Dos

  • Investors ask a lot of questions and sometimes you don't have answers to those questions, always maintain your calm in such a situation.
  • Be patient and confident.

Don'ts

  • Do not pitch to every investor.
  • Do your homework and be very strategic in your approach
  • Try and keep the story/pitch short and really simple
  • Do not sound desperate
Komal Nathani

Former Correspondent, Entrepreneur Asia Pacific

A firm believer of hard work and patience. Love to cover stories that hold a potential to change the momentum of business world. Currently, a part of all-women web team of Entrepreneur’s Asia Pacific edition to jig the wheel of business journalism!

Growing a Business

The 10 Best Podcasts Every Entrepreneur Should Listen to for Growth, Strategy and Success

Unlock your potential with the 10 must-listen podcasts for entrepreneurs, offering expert insights on growth, strategy and success.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

News and Trends

PNB to Host MSME Outreach Programme Across 200 Locations on February 13

Attendees can benefit from on-the-spot loan approvals, personalised consultations with PNB's banking experts, and in-principle approvals under cash flow-based schemes like PNB GST Express and PNB Trade Growth.

Business News

JPMorgan Is Reportedly Laying Off Around 1,000 Workers

JPMorgan is also planning job cuts in mid-March, May, June, August, and September, according to new reports.

Side Hustle

This 31-Year-Old Spends 2 Hours Per Week On His $3,000-a-Month Passive Income Side Hustle: 'Trust Your Vision'

Hansel Moore's home office "wasn't cutting it" — so he found another place to be creative.

News and Trends

CAPGRID Secures USD 5 Mn Led by Anicut Capital

The fresh capital infusion will be used to accelerate CAPGRID's global expansion, enhance its AI-driven supply chain visibility and traceability solutions, and strengthen its network of MSME manufacturing partners.