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