As long as the opportunity is good and offers a compelling solution to a well recognized pain point and offers the potential to scale fast, investors may consider such opportunities
Enterprise Product Company wanting to raise VC/PE Investment.
Akshay Shah:
We are a four-year-old established ERP, SaaS, PaaS Web 2.5 Enterprise
Product company having ERP, CRM, SCM, HRMS, Payroll, Finance, Quality Management, Production and Production Planning Modules and over 25 customers across India. We are now at the crossroads of expansion and scaling up our business. What are our options in terms of raising venture capital and PE investment?
Pavan:
VC’s will consider only those companies that are operating in a competitive vacuum or companies that have demonstrated a compelling value proposition in a reasonable big market. If you are operating in a well established and mature market like ERP which has a number of players, you would need to demonstrate a superior and compelling value proposition relative to the competition. From the various domains/products that you have described, pick one that looks promising relative to the rest, build a business case and then you could approach VC’s.
Investors required for a booming business
Sharat Sharma:
I am looking for investors willing to invest about `50,00,000/- in an auto business being run by me for the past four years. We have been in the automobile business for the past 80 years, I being the third generation. The investment is in liquid capital goods (stocks), the investment is safe as the goods can be liquidated in a very short time frame to raise the entire amount invested. What is the next step I need to take in attracting an investor?
Pavan:
VC’s typically invest larger amounts of capital in a business that can be scaled faster. INR 50 lakhs is a small amount for any VC to consider. In this context, perhaps it is best that you tap into a network of high net worth individuals or angels or if the cash flows are good and stable, even debt financing from banks could be an option.
Seeking funding for tech startup
Omprakash Visvanathan:
Seeking funding for tech startup with fully built product in hand. Product is niche, feature-rich with huge market size ready to be tapped. I am hoping to raise one to two crores to launch the product. How would venture capitalisst evaluate my case?
Pavan:
VC’s would evaluate the idea based on the market potential, pain point proposed to be addressed by the solution and the evidence that the product is offering a real and compelling value to the customers. In addition, the nature and composition of the founding team and the customer traction are also very key evaluation metrics.
Want to meet potential investors for a concept on rural healthcare
Dr. Sanjay Sharma:
I have a concept on remote healthcare services—an end-to-end healthcare delivery system for the developing world. Can you help me by elucidating the steps I need to take for raising angel funding to kick off the pilot project?
Pavan:
First step is to establish the fact that the product once built is solving a real pain or need in the market. This can be done through market engagements in the form of talking to potential customers/users, industry or domain experts and the relevant eco-system players. Once this is done, a brief business plan explaining the opportunity and the outcome expected from angel funding would need to be created and shared with angels who are interested in this space.
Pavan:
It would depend on the specifics of the deal and would vary from investor to investor. As long as the opportunity is good and offers a compelling solution to a well recognized pain point and offers the potential to scale fast, investors may consider such opportunities.
Pavan Krishnamurthy
Pavan has over 15 years experience across various industries such as early stage investing, consulting, venture advisory, research etc. In the recent past, he has worked with Nadathur Holdings and Investments (an early stage venture capital firm focused on technology and life sciences ventures), SRW Advisors (an advisory and mentor capital firm that worked with entrepreneurial ventures in areas such as strategy, business model/plan development, finance, mentoring etc) and Syndicated Research Group (a US-based research advisory firm that provided research advisory services to senior executives of Fortune 500 companies in the domains of human capital strategies and corporate finance strategies).
Disclaimer: The views expressed here are that of the author and do not represent the magazine's.
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