entrepreneurship and building businesses (1)
TRANSCRIPT
Entrepreneurship and building businesses
Identifying and Funding Entrepreneurial Projects
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Agenda
1. Types of funding. 2. Funding opportunities. 3. Agencies/ opportunities where young
entrepreneurs could tap into for funding. 4. What do funding managers/firms look for? 5. What else?
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Types of fundingDEBT EQUITY
Interest/ EMI based Share profit and loss
Near zero interference Active participation
Need 3 years financials at a minimum
VCs will fund greenfield projects
Low risk-takers. Low return expectation
High risk-high return
Need collateral/ cash flow to assure repayment of loan
Need confidence from management team!
Will not enter first-time sectors
VC/ PE focuses on ‘sector/ category creation’
Satyam, Kingfisher etc. Flipkart, InMobi, etc.
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Agencies/ opportunities for startup funding
4Fs of startup funding
Family
Friends!
Fools!
Foes
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Agencies/ opportunities for startup funding
• CGTMSE – SIDBI | 80% upto INR 1 Cr, 5 years.
• TDB – 50% no limit, 5%, royalty, equity, etc.
• TBI – INR 25 Lakhs to 50 Lakhs | IITM, Univ of Madras.
• SPREAD – ICICI | Specific sectors | 50% | Flexible repayment.
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The VC ecosystemSource:
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Typical VC Deal Cycle
Deal Sourcing Deal identification
Business Due Diligence Termsheet Legal
agreementsFunds
Transfer
1. Stage 2. Sector3. Size
What do VCs look for?
A great business plan!
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Business Plan
A Business Plan is a base document for decision-making.
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1 People
Oppty2 What? To whom?How big?
How fast?
How much? Barriers
3 Context
4 Risk and Reward
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1 People
Oppty2 What? To whom?How big?
How fast?
How much? Barriers
3 Context
4 Risk and Reward
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1 People
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Studied together
Relevant to area of business
Professors know youOh! Ivy League?
Quick closure!
Worked together
Relevant to area of business
Accomplishments
Skills, abilities & knowledge
Reputation
Ability to deliver quality on time Recruitment
pattern
Ability to realistically assess chances of
success
Response to adversity? Have they seen enough
before?
Commitment levelsMotivators
Maturity to make the hard choices
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25% DONE
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Oppty2 What? To whom?How big?
How fast?
How much? Barriers
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“There is a fractal self-organization within natural language”
Search for and organize both items and people
What do you do? For whom?
Design and Manufacture low cost ATMs
For Banks
NEEDWhy do you exist?
To enable financial inclusion
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Why do you exist? For whom?NEED
Unmet
Incremental
Current Future
Business
Business growth
Time
DIMENSIONALIZE
Overall
Relevant
Addressable
Sales calls per day
GAP
ROI
FEATURES
BIZ MODEL
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The business needs to appear as an opportunity.
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COMPETITION INNOVATION SALES AND MARKETING
USER EXPERIENCE DISTRIBUTION CHANNEL
An entry barrier is something that can be done well only by you
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50% DONE
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3 Context
4 Risk and Reward
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Business
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75% DONE
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I won’t leave my job syndrome
Market slide first
Stories!
Disclose interaction with other VCs
35 slides 2MB
ValuationFinancials
Listen!
EXIT!!!
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100% DONE?
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Questions please…
Thank You!
Aditya Nataraja