Investors Fancy Startups that are Solving Larger Problems

The company CEO feels in any part of the world, startups should be working to solve a large problem that concerns many to get investors' support

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Raising funds is one of the challenges that entrepreneurs face and often fail to deal with while starting up.


Fundraising is a frustrating process because of the uncertainty in terms of the outcome. Many founders aren't even sure what they should do to "convince' investors. So how can one actually go about it?

In a chat with Entrepreneur India, Umesh Sachdev, CEO and Co-founder of Uniphore Software Systems, gave some handy tips that entrepreneurs should keep in mind while looking for funding.

The Chennai-based company has recently raised an undisclosed amount as part of its series-B round of funding from investors, including IDG Ventures and Cisco Systems, a global giant in the networking hardware space.

John Chambers, executive chairman of Cisco Systems, has also picked up 10 per cent stake in the company.

Before you even think about approaching an investor, take onboard some of these important pieces of advice.

Find Problems Worth Solving

Sachdev said in any part of the world, startups should be working to solve a large problem that concerns many to get investors' support.

"It has to be disruptive and innovative. At the end of the day, startups are smaller in size but they end up competing with larger competitors or larger problems. It requires courage, disruption, and technology innovation to disrupt markets. Founders should keep in mind the areas they choose and the kind of problem they are solving. It has to be a large, unsolved disruptive area," he explained.

Focus On Biggest Problems

Most startups shut shops not because they fail to build a solution, but because they fail to solve a "big enough" problem. As a company grow, it's important to give evidence of being able to solve that problem.

"You may have solved that problem for one or two customers or areas but to be able to do it on a global scale, you need a team that is efficient enough to take your startup global," Sachdeva emphasized.

It's very important that the first few customers give positive validation. "While scale and speed are important, it's very important to have the first set of customers or direct enterprises who will vouch your product or services, saying what's delivered to them is of great value," he added.

Hence, it's very important for startups to focus on satisfying customers with their offerings.

No Dearth Of Funding Opportunities For Startups

Sachdeva added as long as these criteria are in place and there is evidence of early validation by customers, team which is able to cash in on this goodwill will bring success to the startup. If the problem is big enough and concerns many, then there is no dearth of funding in a country like India.

"We have investors who come to us for recommendation before investing in new startups. I think there is no dearth of venture capital whether it is an angel investor or a VC in this country. It's just that we have to be courageous to be solving large problems and put the right organizational structure in place," he concluded.