A Few Tips On How To Raise Venture Capital For Your Startup

Raising Venture Capital

Raising Venture Capital

Raising seed stage venture capital is one of the toughest challenges you can ever face. However, despite fierce competition, potential startups always somehow manage to find capital and reach a successful position. Over these years, I have seen many startups succeeding and many failing in their endeavour to raise capital. No wonder, there are certain aspects that many entrepreneurs fail to understand before their first meeting with a potential investor.

So if you are a first-time entrepreneur, here I am listing some very basic tips on how to raise capital from a VC for your startup. The points may seem very obvious but you will be amazed to know that most of the failed attempts are due to lack of one or more of these obvious aspects. So before you take your first attempt, make sure you have all the prerequisites with you that will enable you to convince a VC easily.

Quick Tips On How To Raise Capital

1. Know Your Requirements

What you want and how much you want should be very clear to you before you look into any other aspect. Unless you know about your requirements, you won’t be able to express your thoughts in front of an investor which will indicate lack of transparency on your part. If you don’t know what you are looking for, how will the investors know what they are investing for? Make a list of your requirements so that you can ask for the justified value for the first round of investment.

2. Create An Efficient Management Team

An efficient management team is the life of a company that executes all major operations ensuring smooth functioning of the company. Investors are, therefore, very particular about the quality of a team before investing. They usually look for a team that is smart, talented, committed, honest and expert in finance and management. The better the teamwork, the brighter the outcome, so make you manage to bring great talents under a single roof.

3. A Strong Value Proposition

Why would a customer pay for your product is the first critical question you have to answer so make sure you have something very impressing to say to the investors. If possible you can demonstrate a strong value proposition with the help of a group of beta customers from your target market. First come up with a working model of your product or service and then demonstrate why customers would come to buy that from you.

4. Proceed With The Right Attitude

Attitude is very important while dealing with capital raising. While wrong attitude can lead you to nowhere, right attitude can take you straight to your investors’ table. So try to maintain a pleasant and positive attitude and a great power to handle rejection. You never know when someone can introduce you to a potential investor so it is a must for you to be friendly with everyone in your network.

5. Choose Your Investor Carefully

Venture capitalists vary in their preferences; some invest in seed stage while other are interested in growth stage startups. Some invest in technology while some in energy or finance or maybe some other sector. Basically, you have to identify the right investor and then start chasing or it will all be a waste of time and energy.

Conclusion

These simple and basic things are highly effective in making a business look attractive. Remember, the eagerness with which you are looking for business capital is no less than the same with which investors are looking for investment opportunities. So if you can manage to offer them a lucrative investment opportunity, they will jump into it before you take it to some other investor. This means, there is no dearth of money in the market. All you need is the right set of things to raise it easily.

For more information on how to raise capital for your startup, feel free to visit Merger Alpha.

Good luck!

Top 12 VC Firms You Can Approach To Raise Capital In India

Over the years, I have seen so many entrepreneurs toiling to raise capital in India for their dream startups – some failing while some succeeding. And, the one simple thing I repeatedly realized is that no matter how talented and skilled you are, it is only “Capital” that ultimately allows you to execute your plans. The challenge is even higher at seed stage as the avenues to raise capital are very few compared to growth stage. The reason is the huge amount of risk, usually, associated with seed stage startups that keeps banks and other financial organizations from investing.

However, witnessing the huge pool of talent and surge of technological innovation in India, many venture capital firms from across the globe have started setting their offices in India with an aim to invest in high-risk startups.

Today, there are large numbers of local and global venture capital firms that are ready to invest in your ideas provided you offer them a unique product or service with a highly scalable market. If you have these two prerequisites, you are almost halfway towards your goal and that’s why I am providing you with a list of some of the top VC firms in India that are actively involved in pushing potential startups towards success. Try to approach them only based on the suitability of the industry and stage of investment so that you can save both time and money.

Top Venture Capitalists To Help You Raise Capital In India

Accel Partners

Location – Bangalore, Karnataka
Industry – Cloud enabled services, Mobile, Software, Internet and Consumer Services, Infrastructure, etc.
Stage – Early stage investments.

Band Of Angels

Location – Mumbai
Industry – Software, Health and wellness.
Stage – Seed, early and later stage investments

Bessemer Venture Partners

Location – Mumbai
Industry – Enterprise Software, Software and Mobile
Stage – Seed, early and later stage investments along with Private Equity and Debt Financing

Battery Ventures

Location – Mumbai
Industry – Software, Enterprise Software and Analytics
Stage – Seed, early and later stage investments along with Private Equity and Debt Financing

Canaan Partners

Location – New Delhi, Delhi
Industry – Healthcare, Software and Biotechnology
Stage – Seed, early and later stage along with Private Equity and Debt Financing

Helion Venture

Location – Bangalore and Gurgaon
Industry – Enterprise Software, Online Services, E commerce, Mobility and Outsourcing Services.
Stage – Early to mid-stage financing

Jumpstart Ventures

Location – Bangalore
Industry – Internet, Software and Ecommerce
Stage – Early and later stage along with Debt Financing

Light Speed Venture Partners

Location – New Delhi
Industry – Mobile, Software and Enterprise Software
Stage – Seed, early, later stage, Private Equity, Debt Financing and Grant Investments.

Matrix Partners

Location – Mumbai
Industry – Enterprise Software, Software, Mobile, Financial Tech, SAAS and E-commerce.
Stage – Seed and Early stage investments

New Enterprise Associate

Location – Bangalore
Industry – Mobile, Software and Biotechnology
Stage – Seed, early and later stage along with Private Equity and Debt Financing

Nexus India Capital

Location – Mumbai
Industry – Business Consumer Services, SAAS, Consumer Internet, Mobile and Enterprise Technology.
Stage – Seed, early and later stage investments.

West Bridge Capitals

Location – Mumbai
Industry – iPhone, Android and Mobile
Stage – Early and later stage investments.

Conclusion

One thing that is critical to venture capital raising is networking. Having a strong network will make it much easier for you to find an investor as there will definitely be someone who can introduce to a potential investor.

Another easy way is to become a part of an intelligent network like Merger Alpha that brings together buyers, sellers, financiers and advisors under a single roof. The network not only allows you easy access to a VC but also gives you a scope to learn successful business strategies from other influential people in the industry.

For more information on how to raise capital in India, feel free to visit http://mergeralpha.com.

Do share your thoughts and experiences with capital raising in the comment box given below.

Good Luck!