Please read series A funding plan and strategy, the first step of the process - the introduction to an investor, the 2nd step - first meeting and follow up, step 3 - present to the partnership, step 4 – Negotiations and Legal Discussion and now the final step: the due diligence and money transfer. After the investor offers your a term sheet, they [...] Read More
Congratulations, you have achieved what nearly 95% of startups (anecdotal evidence) wont end up doing – getting to a “term sheet” discussion with an institutional investor. After your first VC meeting, usually this step happens about 3-4 weeks later in India and a week or two in the US.
Once you have a series A funding plan and strategy, the first step of the process, the introduction to an investor, the second step the first meeting and follow up, now its step 3 is to present to the partnership. Most times this step is hard to get to. Getting to this step means the key partner who is [...] Read More
You’re set to read the Step 2 of raising a series A, once you’re done with devising a plan and strategy and also the Step 1 of the process. Since you got an email from the investors admin, I’d recommend meeting investors either on Thursday or Friday. Typically the admin will give you 30 [...] Read More
There are 5 important parts of a series A funding process:
1. The introduction and initial call: Since your plan has already given you a spreadsheet with the target investors and possible connections, this step in the process is to either email (or call as appropriate) your connections with a request to introduce you to the investor.
I recommend that you do a quick 15 min brief to your connection about your company so they know what your company is doing and why the connection you are requesting is a good fit as an investor. I would recommend a short 40-100 word email with your elevator pitch, which can be forwarded to their investor connection.
Fund raising is one of the most difficult parts of a founder’s job. Getting money from investors of any type is hard. Dont be fooled by stories of entrepreneurs talking to investors and getting checks in 10 minutes. Those are truly black swan events.
The first thing you have to realize is that you need to develop a comprehensive plan and strategy to raise your series A. Think of it as an effort that’s similar to the launch your product. For purposes of this discussion lets call series A, as your first institutional round. I am also making the assumption that you have a working product, paying customers and are targeting a very large market (>$1 B for US, >$250M in India). If any of those criteria are not met, dont bother trying to raise money in this environment.
Like you, I assumed that all VC’s are risk takers. I mean as an asset class if you have to provide the highest returns over the long term, I would suspect you have to take big risks to get big returns. The average Indian bank has been giving around 8% annual returns on FD (source), [...] Read More
An entrepreneur’s life is fairly stressful. Most of it (in my perspective) is self induced, so the best advice I have ever received is “take a deep breath”. That said the first step to reduce stress is to pinpoint the sources of stress. 1. The stress of “expectations”. This causes serious heartburn and is the [...] Read More
I have several entrepreneurs asking me for templates of our “series AA” or seed series term sheet. Unfortunately, most of our deals are convertible debt (for companies based in the US, even though they have Indian entities). There is only 1 company we have invested in that is incorporated in Indian alone. I asked a [...] Read More
Over a startup event Bangalore a few weeks ago, I had the chance to talk to over 50 budding entrepreneurs about the seed funding scenario in India. It is well known that there is a lot more demand for investments at the seed stage than there is supply. The number of angel investors in India [...] Read More