1. www.letsventure.com
Shanti Mohan, Founder & CEO
LetsVenture
Twitter: @shantimohan, @letsventurein

2. CAPITAL
…itself is NOT the goal, it is the enabler to get to
THE GOAL.
www.letsventure.com

3. www.letsventure.com
FUNDING
LANDSCAPE
IN INDIA

4. Funding Sources
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5. Startup Trends
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Based on Sectors
Scenario : India vs US

6. Sources of Capital
Seed Funds
- Funds focused on early
stage (IDG, Sequioa,
SAIF)
- Smaller Funds (India
Internet, Snapdeal, India
Internet Fund, Wipro etc)
www.letsventure.com
Individual Angel
Investors
- Professional
Contacts
- Member of
Networks (IAN,
MA, HA etc)
- Members of
LetsVenture!
Friends and Family
Incubators and Accelerators

7. STARTUP
STAGES
www.letsventure.com

8. Startup Stages
www.letsventure.com
Ideation
POC / Beta
Launched
Revenues
/ Traction
Scale/Growth

9. Ideation
If the world is cold,
make it your
business
to build fires
www.letsventure.com

10. POC / Beta Launched
Fast Market testing of a product or feature to get
qualitative or quantitate feedback
Find your early adopters / customers
Be Lean
Focus on providing value to your customer
Use validated Learnings / Pivots and iterations to
move towards PM fit
Borrow or Steal
Ideally boot strap!
www.letsventure.com

11. Revenue / Traction – Moving towards Product Market Fit
Product/Market fit means being in a good market with a product that can satisfy
www.letsventure.com
that market.
And you can always feel
product/market fit when it's happening
The customers are buying the product
just as fast as you can make it -- or
usage is growing just as fast as you can
add more servers. Revenues are
building, team is growing. Reporters
are calling because they've heard
about your hot new thing and they
want to talk to you about it. You start
getting awards and VC interest!
You can always feel when
product/market fit isn't happening.
The customers aren't quite getting
value out of the product, word of
mouth isn't spreading, usage isn't
growing that fast, press reviews are
kind of "blah", the sales cycle takes
too long, and lots of deals never
close.

12. Rachleff’s Corollary of Startup Success
The only thing that matters is
getting to product/market fit.
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13. Fund Raise Stages
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Ideation
POC / Beta
Launched
Revenues /
Traction
Scale / Growth
Finding Problem / Solution Fit
Finding Product
(Service) / Market Fit
Finding Business
Model Fit
Bootstrapped/ Friend
and Family
Angel, Seed Funds ->
VC Rounds (A,B,..)
Revenue / Traction
Time

14. VALUATIONS &
TERM SHEETS
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15. Valuation
www.letsventure.com
Your business is worth what somebody is willing to pay for it..
Valuation at Early Stage
more of an
Art than Science

16. Definitions
Pre-Money = the value of your company now
Post-Money = the value of your company after the investor put the money in
www.letsventure.com
Ask – How much money should I raise?

17. Valuing an Early Stage Startup
www.letsventure.com
Supply and Demand
Your Industry / Sector
Other Factors specific to Your Business!
Finally, Understand ‘Equity Planning’
factors

18. Supply and Demand
www.letsventure.com
• Supply and Demand
 Patented technology
 Exclusive market partners
 Improved Traction
 How many more Angels / VC’s willing to invest?
• Before you start Fund raise, make sure your business is
perceived as ‘new’, ‘unique’, ‘exciting’
• Are you a ‘Me-to’, ‘commodity business’ ?

19. Industry / Sector Dynamics
• Each Industry / Sector has unique Valuation
Dynamics
 Study valuations of similar startups in your
www.letsventure.com
space
 Study exits that happened in this space
(acquihires, M&A)
• Study EBITDA (earnings before interest, tax,
depreciation, and amortization)
• Understand growth metrics in your industry
 Understand growth metrics

20. Other factors Specific to Your Business!
www.letsventure.com
• Stage of the startup
• Will you survive the next 5 years?
• Cost to grow the business (Customer Acquisition cost,
Technology costs)
• Scalability of the business (global versus local play)
• Founding Team Profile
• Advisory Board / Mentors Involved
Equity is the most expensive instrument to finance your startup
Customer Money is Cheapest Money!

21. Finally …
• Try and get term sheets from multiple investors
 How many investors are willing to invest?
www.letsventure.com
• How desperate is the Entrepreneur?
• Think a valuation that gives your Investors 10x!
• Founder Vesting
• Understand the details of a Term Sheet (some parameters
could impact the value of your startup!)
 Liquidation Preference (could tilt outcomes on exit)
 Dilution (and anti dilution)
 Option Pool (on pre-money or post money?)

22. Term Sheets
www.letsventure.com
1. Liquidation Preference (could tilt outcomes on exit)
Participating or Non Participating:
 Non Participating (as per LV) – Investor gets to take back his money or
participate pro-rata.
 Participating: Takes his money out and then participates in the round
2. Anti dilution:
Taken money at x valuation. If there is a down round, additional shares will be
given to investors (full rachet) – broad based weighted average
compensation.
3. Option Pool (on pre-money or post money?)
4. Board Composition
Look for 1 director,
1 observer (not recognized by Indian law) but a backup if board director may
not be available
Understand the details
of a Term Sheet
(some parameters could impact
the value of your startup!)

23. WHAT DO ANGEL
INVESTORS LOOK FOR?
www.letsventure.com

24. Team
www.letsventure.com
1. Passion, Purpose and Integrity
People don’t buy what you do but Why you do
it!
2. Chemistry (with Investors and among the
founders)
3. Ability to execute
4. Coachability
5. Complementary skills
6. Skin in the game
7. Think BIG!

25. Product and Market
• What problem are you trying to solve?
• Is the product / idea disruptive or innovative?
• Is there differentiation that is unique and difficult
www.letsventure.com
to replicate?
• Product Traction
• Is the market large enough and growing?
• Is the business scalable?

26. Heard from Angel Investors!
www.letsventure.com
- Startups with well rounded team to
execute innovative ideas, gain quick
customer traction, build defensible market
position, and ability to scale.
- Product companies with differentiation and ability
to go global
- World class - Early Stage companies with proven traction and technology centric internet products
new business models

27. STARTUP FUNDING
CHECKLIST
www.letsventure.com

28. Operationalize
 Have a signed founders agreement
 Clearly agree on equity structuring in the
www.letsventure.com
company among founders
 Agree on Roles and Responsibilities
 Operationally know the details
 Register your company
 India, US, Singapore
 Accounting in place (no random expenses which
cannot be explained for)
 Have employment agreements in place (if you
already have hired employees)

29. Internalize
 Really internalize why you want to raise angel
www.letsventure.com
money
 You are answerable to investors
 Your startup is now now on a treadmill for growth
 You have a new set of advocates and champions
whom you can reach out to for help/advice
 Think professionally – if needed ask for help, talk
to people who can help
 Don’t make funding a do or die situation

30. Closure
 Don't raise money unless
you want it and it wants you
 Be profitable if you can
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31. Startups who have raised Angel Funding
Social Impact Startup
1.5 years, with
paying customers
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Online Platform for
the creative
community
15 months in
existence, 25000
users (only traction, no
revenues)
Strong team,
who showed
entrepreneurial attitude
Mobile App for Credit
/ Debit Loyalty Card
Provider
1 year, with good
customer traction
Product
Validation, Good Lead
Investor
Intelligent Social
Curation
1 year, with good
customer traction
Knew Investors
well, Founders
showed persistence
All startup founders said that Fund raise is a long tiring process, so get started early!
Founders went
full time

32. How Can
LetsVenture
Help?
www.letsventure.com

33. What can you do on LetsVentureCreaWteha Itn cvaens ytoour dRoe oand Lye tPsVroenfitluerse
www.letsventure.com
CREATE
• Comprehensive Investment Ready Profiles
• List under Actively Fundraising to gain Attention of Global
Investors
DISCOVER & GET DISCOVERED
• Find & Connect with Global Investors
• Start a Featured Syndicate to close your
deal fast
COMMITMENT-TO-CLOSURE
• Program-Manage post verbal
commitment with complete legal and
financial due diligence

34. What can you Gdoe ot nD LiestcsVoevnetruered / CWohnante ccatn tyoo uG dloo boan lL IentvsVeesnttourrse
www.letsventure.com
CREATE
• Comprehensive Investment Ready
Profiles
• List under Actively Fundraising
DISCOVER & GET DISCOVERED
• Find & Connect with Global Investors
• Start a Featured Syndicate to close your deal fast
COMMITMENT-TO-CLOSURE
• Program-Manage post verbal
commitment with complete legal and
financial due diligence

35. www.letsventure.com
CREATE
• Comprehensive Investment Ready
Profiles
• List under Actively Fundraising
DISCOVER & GET DISCOVERED
• Find & Connect with Global Investors
• Start a Featured Syndicate to close your
deal fast
COMMITMENT-TO-CLOSURE
• Program-Manage post verbal commitment with complete
legal and financial due diligence
Get Featured, Get Funded!

36. #sfme
www.letsventure.com
Thank You!
Shanti Mohan
shanti@letsventure.com
www.letsventure.com
Startup Funding Made Easy
Tweet: @shantimohan,
@letsventurein

37. Liquidation Preference
www.letsventure.com
 Participating Preferred Equity
 Example:
 Startup sells for $10M, investors get $9.3M (3x their
investment (3 times $3M) and then 30% of the remaining
value (.3 time $1M)), and other shareholders get $700k
 Startup sells for $20M, investors get $12.3M (3 times $3M
plus 30% of $11M), and other shareholders get $7.3M
 Startup sells for $50M, investors get $21.3M (3 times $3M
plus 30% of $41M), and other shareholders get $28.7M

38. Actively Fundraising Startups
6
5
4
3
2
1
0
www.letsventure.com
35
30
25
20
15
10
5
0
Valuation vs Fundraise
Post Money
CR
Round Size
in Crs

39. Funded Startups
0 2 4 6 8 10 12 14
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
www.letsventure.com
25
20
15
10
5
0
Steady
Revenues
Early
Revenues
Early
Revenues
Steady
Revenues
Early
Revenues
Early
Revenues
Beta
Launched
Early
Revenues
Steady
Revenues
Beta
Launched
Beta
Launched
Early
Revenues
Beta
Launched
Post Money
CR
Round Size
in Crs