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Startup and Capital

, April 28, 2015, 0 Comments

Startup capital-MarketExpress-in
Every Startup company requires capital at some point of time, whether it is for sustenance, growth, development or scaling up. Depending on the need, one has to decide on the timing and also choose the source of the capital. While timing plays one of the prime role in raising capital, the source of capital can have a multi-fold impact on the Startups present and future. Another common pitfall to watch out for is, being influenced by other Startups, who are in a capital raising spree running into millions and millions. . We need not get carried away in this environment. At this juncture it is important to take stock, analyse and evaluate the options: the need and the sources of raising capital clearly and objectively.

While formulating the plan to raise capital, one should keep this pointers in mind:

At what stage is your company in, as on today? The rate of growth it is clocking: high, medium, low growth

Are you willing to work under investors guidance? While some investors could be very demanding, possibly seen as intrusive or some who would like to partner with you in a collaborative approach and be ready for unforeseen eventualities,

Have you studied and taken cues from your industry, local and global peers? It is pertinent to take an assess the current realities within the company and the environment it is operating in and how the capital infusion can change your company fortunes and growth.

Listen to yourself and advisors, take in feedback from all these quarters, before arriving at a decision.

Once you have validated the need for raising capital, study the possible routes for raising capital and the complete process to make it happen. One can start with the simple exercise of using a spreadsheet (using Libre Office- open source software are good) to jot down the pros and cons of each ways. Not only PE or VC is not the only way to raise capital. HNI’s and angel investors too can also fund your capital needs. May be the fund inflow will be in a staggered way, based on performance matrix, yet it gives you ample room to maneuver and change the plan as required and to your liking. With HNI’s and Angel Investors (H&A) there is a good chance of bringing them on board in crucial decision-making process, so they can understand your team and trust your leadership . This will help H&A investors to create a bond with you and your company. Which in turn will give them the confidence to invest more, also bringing more investors and they can also be your company’s evangelist. Ultimately do what you believe in ,stick to it, have an evolving thinking process. Rest everything will fall in place. Be happy in chasing your dreams… people will have opinion – let them have it. De-focus them, stay focused on your startup’s vision, enjoy the ride with your venture…nurture it, growth will happen eventually !