Planning To Raise Capital In India For Your Tech Startup? Avoid These Mistakes!

With technological innovations touching new heights, it isn’t surprising to see a VC getting attracted to the industry. And, when it is India, one of the fastest emerging software superpowers in the world, you can’t wrong with a hi-tech idea as there are countless potential investors awaiting a lucrative investment opportunity. So if you are planning to raise capital in India, there’s nothing wrong in building a strong strategy for fundraising, but, there are certain fine things that can emerge as big mistakes if neglected. As a result, you may have to spend more time and effort finding capital for your startup.

Here are some mistakes that you should avoid while raising venture capital in India.

Capital Raising Mistakes You Must Avoid

1.  Not Considering Fundraising As Optional

There are few achievements in life as satisfying as raising capital for your own dream startup. Now despite the fact that capital is one the major prerequisites for a successful business, you should still consider fundraising as an optional thing and not compulsory. You will be amazed to know that the very idea can form the base for a strong and attractive business.

Try to go as far as you can without the help of any investor and you never know when a potential investor might start chasing you! So which sounds more exciting – you chasing an investor or an investor chasing you? You know the answer, right?

2.  Raising Very Little Or Too Much

How much is too much or how little is too little is a big question that has forever threatened entrepreneurs around the world. No doubt the value is directly related to the outcome of your business valuation, there is still some amount of probability that works on both sides.

Always remember that you are running a newly-started business which still has a lot to see such as new employees, new equipment or maybe, a new office too so there is no crime in securing some extra cash that can cover up these essentials. Similarly raising too much capital can again lead to unwanted expenditure as it is quite obvious that where there is money there is expenditure. You have to remember that you are raising your business with other people’s money and you have to return the profit as per the amount you are raising, so a balanced approach is a must.

3.  Chasing The Wrong Investor

When you are planning to raise capital in India, it isn’t just the capital that you are running after. There are many more additional things that an investor should be able to offer you such as guidance on management and finance, valuable opinion during critical decision-making, sharing invaluable contacts and helping you boost your networking. Keeping your arms open for dumb money is not always a good idea so look for investors who are familiar with the industry you are dealing with so that you can reap maximum benefits from the partnership and accelerate the growth of the business.

4.  Choosing A Wrong Time

There is always a right time for everything you do, be it flying a kite or chasing a VC. Before you start, do a proper research on the VC industry to know the time of the year when the VCs are most active. Keep your eyes on the latest news updates and on social media to track the investors activity and figure out if it is the right time to chase them.

Moreover, every VC firm has its own preference regarding the stage of investing – some prefer to invest at seed stage while some prefer to invest a later stage. At the end of the day, you may not want to spend a whole year in chasing and not making it to the next level.

Conclusion

These are some of the very common mistakes that you can avoid only by playing little smart. After all, it is all about showing a VC that your startup is just the right thing they are looking for and it is only possible when you show the right idea to the right person at the right time at right place.

For more information on how to raise capital in India, feel free to get in touch with us at Merger Alpha.

Good luck!

Thinking How To Raise Venture Capital In India? Check Out These VC Firms

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Raising a business in India is a great challenge along with excitement. An an entrepreneur you need to devote a significant amount of time in accumulating all the resources that can ultimately help you get started. Needless to say, the most crucial of all is the capital which determines the successful execution of your unique idea. Even the best of entrepreneurs get access to their potential investors after months of efforts in building their capital raising campaigns. If you too are wondering how to raise capital in India, the venture capital industry definitely has a lot of scope these days.

Today, there are large numbers of local and global VC firms operating from various cities in India bringing up ample opportunities for entrepreneurs like you to fulfil your innovative dreams. If your product or service has great potential, it won’t be very difficult for you to attract these investors to offer you the much-needed capital.

Top Venture Capital Firms In India

  1. Canaan Partners – New Delhi

Industry – Healthcare, Biotech, Software. Offers seed, early, later stage VC investments, Private equity and Debt financing.

  1. Band Of Angels – Mumbai

Industry – Software, Healthcare and others. Offers seed, early and later stage investments.

  1. Bessemer Venture Partners – Mumbai

Industry – Mobile, Software and Enterprise Software. Makes seed, early and later stage VC financing.

  1. Accel Partners – Bangalore

Industry – Cloud Enabled Services, Mobile Software, Internet and Consumer Services and Infrastructure.

Makes growth stage investment.

  1. Helion Ventures – Gurgaon and Bangalore

Industry – Outsourcing, Enterprise Software, Mobility, E-commerce and Online Services. Offers early to growth stage investments.

  1. Light Speed Venture Partners – New Delhi

Industry – Software, Enterprise Software and Mobile.

Offers Seed, early and later stage vc financing, Private equity, Debt financing and Grants.

  1. Matrix Partners – Mumbai

Industry – Software, Enterprise Software, Mobile, etc. Makes seed and early stage investments.

  1. New Enterprise Associates – Bangalore

Industry – Mobile, Software and Biotech. Offers seed, early and later stage investments, Private equity and Debt financing.

  1. Jumpstart Ventures – Bangalore

Industry – Internet, Software and E-commerce. Offers early and later stage, Debt financing.

  1. Nexus India Capital – Mumbai

Industry – SAAS, Business Consumer Services, Mobile, Consumer Internet, etc. Makes seed, early and later stage investments.

Conclusion

Ideally, you should try the other options before raising venture capital as it will make it much easier for you to convince one or more investors at a time. Try to be your own investor first which is a great advantage in capital raising as it shows your confidence in your idea. At least 10 to 25 percent of the initial investment from your personal savings can attract many venture capitalists so it is worth spending it.

For more information on how to raise capital in India, feel free to visit Merger Alpha.

Know Them Before You Raise Capital In India

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Are you dreaming to raise capital in India for your newly-started business? If yes, it is indeed a wise decision as the startup ecosystem in India has already started grabbing the attention of local and global investors with its ocean of talent and innovative ideas. If your idea has the potential to form the base for a huge revenue, you can easily find investors peeping from here and there.

When it comes to capital raising, there is simply no substitute to networking – in fact, consistent networking. Hoping that you are already doing your best in that sphere, we are here with a list of some of the top venture capital firms in India about whom you must gather some basic knowledge so that you can save your precious time by chasing the right investor.

Venture Capital Firms In India

Blume Ventures

Founders: Karthik Reddy, Sanjay Nath
Industry Mobile, Internet
Seed and early stage investments
Fund size $ 50K – $ 250K

Sequoia Capital

Founder – Don Valentine
Industry – Healthcare, Energy, Enterprise, Financial, Mobile and Internet.
Seed, early and later stage financing
Fund size – 1M – 100M

Inventus Capital Partners

Headquarter – Menlo Park, CA
Industry – Finance, Mobile, Advertising.
Seed, early and later stage financing
Investment size – $ 0.25M – $ 10M

IDG Ventures

Founders – Sudhir Sethi, Manik Arora, TC Meenakshisundaram
Industry – Software, Security, E commerce
Seed, early and later stage financing
Investment size – $ 1M – $ 10M

Steadview Capital

Headquarter – Hong Kong
Industry – E commerce
Early and later stage investments

Warburg Pincus

Headquarter – New York, NY
Seed, early, later stage and PE investments.
Industry – Biotechnology, Ecommerce, Software

SAIF Partners

Headquarter – Hong Kong
Seed, early, later stage and PE investments
Industry – E commerce, Advertising, Software

Axon Partners Group

Headquarter – Madrid
Seed, early and later stage investments.
Industry – Security, Games and Software

Ascent Capital Advisors

Investment size – $ 10M – $ 30M
Early stage investments
Industry – Infrastructure, Healthcare, Technology, E commerce, Financial Services.

Bain Capital Private Equity

Investment size  – $ 5M – $ 1B
Early and later stage financing.
Industry – Energy, Technology, Media, Telecom, Financial and Business Services, Consumer, Healthcare.

SeedFund

Investment size – INR 1 to 5 crore
Makes early stage financings
Sectors – Telecommunication, Internet, Mobile, Media, Consumer, Retail, Technology.

Unitus Seed Fund

Investment size – INR 50 lacs to INR 1 crore
Makes Seed stage financing.
Sectors – Agriculture, Healthcare, Mobile commerce, Retail and Distribution, Water and Energy, Education.

Conclusion

There you go. The above list of investors should give you a fair knowledge of some of the most active VCs eyeing the Indian startup industry across various stages of development in various sectors. So depending on your suitability, you can target the right investor and start chasing them diligently across various platforms like social media, forums and other intelligent networks such as Merger Alpha.

If you have any more queries regarding how to raise capital in India, feel free to visit http://mergeralpha.com/.