These #12 Tips From VCs on Capital Raising & Management During 2016 Will Remain Evergreen
The Indian ecosystem saw a large number of early funding rounds and the inflow of foreign funds in 2016. Despite this, what acted as a spoiler were the string of markdowns and pessimism around valuations, which had in turn made investors very knit picky this year.
2016 saw investors stress more about saving the available funds rather than raising more funds and swelling up valuations. Startups also saw a number of corporate money and government-backed funds come into the foreplay with their funding specifications.
Entrepreneur India spoke to a number of investors during the course of the year, and each one of them shared the most valuable advice about fund raising for entrepreneurs. Take note!
“....my two cents to entrepreneurs would be go back to the drawing board, build real start-ups which have the potential for real revenues,” – Subrat Mitra , Accel Partners
My advice to everyone would be, raise money and keep the money in your bank, and don’t be deterred by cash because if you’re gaining money and losing cash you’re going to run dry – Mohandas Pai, Aarin Capital
Keep the fixed cost as low as possible. Keep the variable cost directly proportional to the revenue. So that when the revenue goes down, the variable costs go down – Kris Gopalakrishnan, Axilor Ventures
“...if the company is not able to make it, it’s better to cut the flow of capital, because good money after bad money will not make a great company.” Sudhir Sethi, IDG Ventures India
A focus on sustainability (+ve net margins, path to profitability, +ve unit economics) are no longer a nice-to-have, they are a must-have criterias – Sanjay Nath, Blume Ventures
It’s very important to approach the right investor at the initial stage. One needs to understand which investor has the appetite for your vertical – Anil Joshi, Unicorn India Ventures
Startups thrive on disruption, which means challenging the existing business model and making it work and ensure it is a scalable company – Mohan Kumar, Norwest Venture Partners
The more competitive advantages a business has, the more defensible it becomes and hence maintaining market share becomes less of a concern– Vivek Gupta, BMR Advisors
Entrepreneurs should have a clear vision about what they want to solve and also try and keep it simple.– Hiro Mashita, M&S Partners
I look at profit and loss as an important factor for any decision. I am not the one where I would go about spending money acquiring customers and you hope to build a business sometime in future – Sajal Gupta, Venture Factory
In a situation where VC money is not easily available, venture debt helps increase runway and also allows the companies to have more time to experiment with strategies or build out their plans – Vinod Murali, Innoven Capital
It’s very important that an entrepreneur is arrogant in certain aspects; they know their vision and know what they want to do. – Wilson Cuaca, East Ventures
One hopes to see more such funds come into the foreplay and invest in the best and most innovative business models in 2017.
Entrepreneur India wishes all its readers a very happy 2017!