Often in an entrepreneur’s journey, questions arise in her or his mind about the timing of raising funds, the revenue model to follow and how to approach an investor.
During a panel discussion at Lufthansa Startup Expo hosted by former venture capitalist co-founder and CEO of Indifi Technologies, Alok Mittal, participants answered entrepreneurs’ questions on structuring investments and negotiating fund-raising.
The panelists included Vaibhav Agarwal, Associate Partner at Lightspeed Venture Partners; Pushpinder Singh, CEO of Travelkhana; and Mrigank Tripathi, founder and CEO of Capabiliti.
They had some words of wisdom on a range of subjects:
1. Stage at which startups decide to fund-raise
Pushpinder Singh, CEO of Travelkhana said that one needs a proof of concept to raise funds. “A lot of entrepreneurs these days come with a presentation, which doesn’t work,” he said, adding that it is unfair to approach an investor without a proof of concept.
Mrigank Tripathi, Founder and CEO of Capabiliti, said that videos and presentations don’t work for investors. “Entrepreneurs should realise what investors are looking for – whether you are investible. Secondly show proof to the investor of what you have done, show them some fraction of it. Show the investor the possibility of making it big.”
2. What to keep in mind before reaching out to an investor
Vaibhav Agarwal, Associate partner at Lightspeed Venture Partners, said that the most important factor is to know the size of the market, have insights into it and know how it is different.
“At the seed stage, the investor is looking for validation and value proposition,” he said.
3. Should an entrepreneur build a business based on trending themes?
Vaibhav Agarwal and Mrigank Tipathi said that the consumption of video and content is on the rise and vernacular videos will be in demand.
But Pushpinder Singh said entrepreneurs should not be bothered about such trending themes. “As an entrepreneur one should try to solve the problem and India as a country has many problems,” he said.
Mrigank Tripathi advised entrepreneurs that there are more opportunities than the structured ones like artificial intelligence and chatbots.
He added that if you are not solving the problem where the customer is willing to pay then there is no point in having a startup.
The thought leaders at the Startup Expo also said that in case of a conflicting opinion for a business model with an investor, it’s best for an entrepreneur to part ways early rather than engage further.
Read more: Moneycontrol