Seminar on raising funds for startups

Due to raised excitement and overall awareness since past few years around new startups, the question of funding has come to the forefront now. Otherwise, venture capital circles have been always small in numbers and not so easily accessible. Venture capital(VC) community is essential part of startup ecosystem. Still startups/entrepreneurs have love-hate relationship with them, because of which they are referred as vulture capitalists. Today I happened to attend a half-day seminar on raising funds for startups. This was organized by Pune Open Office Club(POCC). During my own startup venture, we did not really go beyond initial funding, I was little curious myself on this.

There were 4 sessions in all. The first one was Suketu Talekar Co-founder, BrewCrafts Microbrewing Pvt. Ltd, more commonly known as Doolally on “Setting the context right”. Before he began Sandeep Saxena who is part of POCC introduced the seminar agenda to the audience, and also go them into some conversation on topics related to funding. Sandeep also happens to be ex-entrepreneur in the life-sciences domain , now working at Persistent, handling their life-sciences business development. Suketu talked about his views on funding, in a no-nonsense manner sighting examples from his own venture. His advise was completely against the agenda of the seminar. He has been running his business without that, and advised to do the same to others. He, of course, was coming from the point, that if you take care of EBITDA(which is earnings before taxes etc), you generally would not need VC funding.

The next session was interaction with Murali Cherat, Business Mentor & Serial Entrepreneur and Harshad Lahoti, Founding Partner & CEO, Ah! Ventures. This session provided real answers directly from investors, was very useful. They explained differences between seed, angle and regular funding, and talked when to approach and when not to. There were lot of interesting questions from the audiences as well. Murali particularly brought that fire to the discussion, with his passionate, words of wisdom, from a mentor that he is has been. In response to the question related to valuation, he state that it is in the eyes of beholder, and many times may get driven by greater fool theory.

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Then followed an interview with Dr. Anand Deshpande, founder/CEO of Persistent, by Akash Sureka who had sold his venture Hoopz Planet to Persistent, and now works at Persistent. Akash quizzed Dr Ananad on his journey, and various aspects of raising money at Persistent. As we know Persistent began way back in 1990, when IT scene was still in its infancy stage. He rightly pointed out that he did not need external funding, due to nature of the business which IT outsourcing/services, to which I could not agree more, as I also had experienced similar during my own stint. He also elaborated his experience of VC funding with Intel Ventures and couple of other rounds of funding, before eventually they went public, which was essentially exist route for investors. He also had strong views and advise on VC funding to budding entrepreneurs, to be careful about the contracts. He also suggested to consider other types of funding such as debt funding and also customer funding. Before concluding, he also spoke about Persistent Venture Fund and also about a fund for social upliftment called deAsara.

The seminar ended with a passionate talk by Dr. Ganesh Natarajan, who has been CEO of Zensar, and also now started his own venture capital fund company 5F World. His talk revolved around his own journey of turnarounds at APTECH and ICIM(now Zensar). Before talking of 5F World, he also spoke passionately about his association with government for Pune Smart City mission, and various other related social entrepreneurial initiatives. He spoke about interest areas of 5F World fund which being edtech, community building.

Let me conclude this blog by stating my key take away points. Entrepreneurs need to have focus and clarity of thoughts, plans on exit, and clarity on why that money is needed before going to VC for funding. There are other avenues of funding, which needs to evaluated. VC funding contracts terms are 100% negotiable. Need to lay down outlook for 15-18 months, which is matters the most. I am also looking forward for on module on funding which is coming up as part of entrepreneurship related course I am taking these days.

 

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