Starting Up and the Founder

Updated 29Jul24

#fundraising #founder #team #responsibility #ceo #director #India

Dear StartUp Founder

Some points you may want to keep in mind

Fund Raising

So do keep this in mind while raising - if there are two founders, one of them will have to more or less take up the job of fund raising almost full time till the raise is complete - fund raising does take a lot of effort and time - and does involve getting the right content ready, interfacing with investors, building up documents, handling questions relating to the StartUps on legal, regulatory, financial and getting a good data room ready. Do also be ready to meet up with investors per their timelines, and be on time for meetings, and yes they do want to see you when you are presenting, so you will need a presenting view and one view for your face

What the StartUp does

If the StartUp Founder can explain what the StartUp does in around 10 minutes then the Fund Raise will proceed well.. But if you are unable too then do figure this one out - if you cannot explain your StartUp to anyone in the 10 min who will? The Pitch Deck needs to be in tune and never more than 15 or so pages, the deck is an initial introduction to the company, you can always send more information later, if the investors ask for it

Patience

Fund raising does take time and patience is the key, it does take time to raise. You can learn from every pitch, and this makes the process iterative

Founders and Involvement

Regardless of how many founders you have do sync with each other often and define roles and responsibilities so that each founder is building up their segment of the business and then there is a clear sync on achievement

The Founders must be 100% involved in the business, if they are not they need to answer why they moved away from the business or how they are supporting the business from outside. Investors in general are not impressed with part time founders. Most investors want the founder to be involved in only one business

In Indian StartUps the Founding Team must have a large stake in the organization for a Seed Raise, so in a Seed Raise situation around 80% atleast and preferably more

Attitude and Responsiveness

During calls with Investors and at all times be Positive.. this helps the raise and allows for a Strong and Faster Fund raise. Do share information asked for on time and do not duck communication with the Investor (if you do you may score a duck in investment too) Attitude of the Founder during a Fund Raise is very important - do remain positive, and be helpful to the proposed investor. Do provide the investor with information they asked for within say a max of 3-4 days

Responsibility

If other Founders do not take up the Responsibility you have a Solid Red Flag - maybe you are Founding/Founded with the wrong people? If this has happened do act on this fast and find people who can actually work with you in the business - StartUps do not have place for place holders..

Building up the Team

If you are too occupied in running the business, do hand fund raising over to other members of the Team (ideally the co founder) this may also be a great time to build up the Team even better by allotting more Trust and Responsibility to the Team, and making sure the Founder does not have to be involved in everything. A Founder involved in everything in the business and not handing parts to others is a huge negative signal to an Investor

Documentation

Do get your Documentation in order, otherwise regardless of what you do, you may not get your funding, it is very important to get your MCA filings, Tax filings (TDS/GST) in order too. Always keep your data ready for Due Diligence in a Folder properly labelled and protected with passwords - this will also help in the DD process. A key point here - the DD process tends to be very extensive, so do keep all the documents ready and do not try to hide facts - it will not work

Use cases

Use cases are so important to explain how your StartUp works to help the Customer. These are especially useful when you explain your business to an investor - keep them ready with a process chart

Video

If you have a 10 min video of your StartUp, with Who What Why When and How it really helps to showcase

Customer opinion

Customer opinion is so important, do keep a single pager ready with opinions, if you have a video this helps even more

Runway

Fund raises do take time, so plan the runway so that it lasts till the time of the fund raise, in general nowadays a runway of around 6 to 9 months is required and that can be a good point to start the fund raise

Valuation

Yes there will be different times and opportunities and each time has a different valuation. Do understand the valuation being offered and sometimes you may have to settle for a down round to raise money.

All the best in your Fund Raise - you can send me an email on [email protected] if you need any help on the above points