3 Things Entrepreneurs Need from Investors Ecosystem Besides Capital
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Angel investors, venture capitalists (VCs) and private equity (PE) funds are pouring money into start-ups like never before. And there is no dearth as India-focused dry power—capital available with PEs—is a healthy $11.1 billion, according to a report by Bain & Co.
But, as some successful entrepreneurs say, that’s not all they need or look for from the investor ecosystem.
Apart from capital, investors can chip in with tips on strategy and governance to help entrepreneurs scale their businesses. Four successful founders share three key things that entrepreneurs need from the investor ecosystem to be able to unlock the full potential of businesses that they create.
Learning from the Entrepreneurial Journey of Investors
Knowledge, experience and learning of investors from their own entrepreneurial journey are of invaluable importance to budding entrepreneurs, said Akhil Gupta, founder, NoBroker, while speaking at the recent TiE Global Summit 2019.
“In India I have rarely seen entrepreneurs-turned- VCs share their knowledge of running a startup with entrepreneurs. Learning from their experiences can be extremely useful for fellow entrepreneurs,” he said.
Having been on both sides of the table, entrepreneurs-turned-investors can share knowledge of having built and run a company to help entrepreneurs learn and avoid the mistakes they have themselves made.
Support to SMBs Beyond the Metros
For a first-time entrepreneur, getting that first fundraise is the biggest struggle. The struggle manifolds when you are a small to medium business (SMB) operating out of and catering to customers in a small city.
Related Read: 5 Tips on Raising Funds
Shreyans Mehta, founder of MedCords, a Kota-based telemedicine start-up that largely caters to customers in villages and towns, shared his experience from six years of his entrepreneur journey during the summit: “Whenever we would go to big corporates or providers in the ecosystem, the recurrently asked question would be where have we done our first pilot. There has to be someone who will have to give the first pilot, otherwise how will an entrepreneur start? So, it is important that different corporates give small pilots, which would not have a cost impact, to young entrepreneurs as it will help them to know how their product is and boost their confidence.”
Also, the problem is not confined to getting a head start, stated Madhav Krishna, founder and CEO, Vahan, a tech firm that uses artificial intelligence to match job seekers with employers through messaging apps. “Tools for building start-ups and companies have been democratized to a large extent with tools like EWS and Jio Cloud coming up soon, but the knowledge for building those companies, especially those companies that are solving India-specific problems, has not been democratized.”
He added the knowledge for building companies exist in bubbles and investors should figure out a way to get that knowledge across to SMBs functioning in smaller cities so that it can be used to build companies that can serve the next billion people.
Mehta concurred. “Investors should think beyond metros as India’s problems are quite unique when you go deep down to the grassroots. For such problems, there are no benchmarking models from the West that can be directly copied.”
It is difficult to hire good people or do tie ups as not many people are willing to travel to remote areas, Mehta said.
Getting the Right Talent
In the early stages of building a company, hiring the right talent is a major challenge, said Gupta of NoBroker. “It is tough to convince good talent that this small idea will be a multi-billion company tomorrow and get them on board.”
Investors can use their networks and chip in with human resource to hire the right talent for early stage start-ups.
Aanchal Saini, co-Founder and CEO, Rent It Bae, an apparel rental platform, pointed during the TiE summit that lack of skilled workforce is also a major issue. “Apart from technology roles, it’s difficult to find skilled workforce in other departments.”