Tired of applying everywhere for funding.
Acquiring funding for a startup in india has become a hassle. I myself have been doing research on seed funding Vc's and angel investors. All they ask is pitch deck and LinkedIn profile. Which they don't even go through and just reply with an email saying we are not eligible for funding. On the other side US and other countries are getting funding at the ideation stage. I guess we can't even go for crowdfunding. Started building MVP, but halfway through the hurdle and unable to resume the development due to limited resources.
MetalMan20
Stealth
a year ago
I completely get your frustration, having been through this cycle myself while building. And yes it's true, it's hard to raise funding in this market, but you'd have to probably go more focused on your approach.
A few suggestions from my end to maybe make the fundraising meaningful.
1. Customers: Ask yourself if what you're building is a priority item or simply a challenge in the industry? You have no idea how many folks get to these much later on in the journey. What I mean by that is, will what you are building be a priority item for your ICP maybe because it impacts their bottom-line or drives higher efficiency, anything that contributes to revenue. If not, if you're only solving for a challenge, do your research whether this is what your customers are looking at at the moment?
2. Focusing on Closed Sales- Instead of closing sales given you're still building your MVP, get your solution validated. Get your target customers to give you nuggets on why you're needed. It's great to get a LOI if you're in the B2B business, because that's the amount of contract value your funding will help you hit and VCs would prefer a more active pipeline than something that's purely on ideation.Also gives you the right thesis on your product, the pricing, any misses etc.
3. Team: While I get why many people say hire from Tier 1, Tier 1 always doesn't equal more quality for you. Find folks who have on the ground operator experience in your domain, get them to validate your idea and sell your vision. Ask them to get involved in part time activity. Offer them healthy ownership, find advisors many folks including me do free advisory for ventures because it's a way to give back to folks where you feel they are solving something critical. So get crafty to get a more holistic founding team
4. Angel Investors: Investment like anything else works on sales like lifecycle. You have to be concise with the investors you approach, find out investors who represent your domain or have invested
MetalMan20
Stealth
a year ago
Contd.
Or have invested in similar ventures or your competitors. Most of the time it's better to focus on the quality of angel investment than simply looking at it from a capital POV. This could mean if it's solid, you can have senior executives invest in you from your target market that can also help you get a foot on the door to close these customer deals. They are more likely to do so than a traditional VC.
5. Expand Your Approach - Identify funds that align with what you're building. Then approach portfolio founders to understand what makes them tick, what they look for and maybe a warm intro to their SPOC at these funds. Many times, go off beat also. I've gone to the most unlikely places like finance or legal professionals who play an active role in these places, and hit them up. Trust me they have more nuggets than anyone else and more than often they are overlooked, so go build those relationships with the ones who understand a more deeper dynamic than your typical investment associate.
Hope these help. If you have any specific roadblocks and can provide more context, happy to share more detailed way on how you can go about it from my experience :)
Birdsarentreal
Student
a year ago
Thank you so much for the briefing. I'll take a note on every point. Thanks for sparing your brother time to reply to this thread.
Hi @Catshowl can totally understand this.
If possible, can you share a brief about your team and the idea that you're building upon?
I could help in sharing a few notes on how we approach first calls (I work at a T1 fund)
Just to add some points as well:
1) Having pedigree is what gets attention (good work experience or good education) - this is because there is a crazy amount of founders building, and it's impossible for VCs to meet as many. Unfortunately, these filters come in
2) If the above isn't there. The best way to get noticed is by writing really good cold emails to partners/principals/VPs. They'll typically send them downwards and your first meetings will get set. It helps if your idea is related to a thesis they already hold.
3) Perhaps be more broad based and reach out to more funds, get a few conversations rolling
4) Giving an advice that most VCs would hate: If all else fails, create fomo. It works for a lot of the funds. Try to get to a better stage with smaller funds and say that you're about to close your round etc. This will get attention despite everything
Hope this helps
Birdsarentreal
Student
a year ago
@WittyFeed thank you for pointing out these. I shall take note of these. Please let me know how I can contact you for sharing my team details and the product idea with a pitch deck if necessary.
Birdsarentreal
Student
a year ago
For acquiring the license and team expansion along with the certain resources that needed for my startup to crawl up. 🙂 I do understand that some just try to exploit money from investors for their own joy. But some need it for them to rise from the sand. Hope you understand
Can you really not acquire at least 1 customer without all these heavy investments?
Alternatively, can you fake these (license, team) and acquire 1 paying customer?
If you are clever enough to achieve that, reach out to [email protected], i angel invest plus I'll warm intro to few VCs.
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Qwerty2398
Stealth
a year ago
If your product is good/doable you wont need vC funding... VC funding should be opted only scaling up. Any one who comes for funding at idea stage is just another scam.
Birdsarentreal
Student
a year ago
😄 it's at mid MVP development stage. I guess we should focus on MVP rather than seed funding. Thanks btw
mohhmaya
Stealth
a year ago
I don’t use linkedin so I can’t get funding?
Birdsarentreal
Student
a year ago
Hmm so LinkedIn is mandatory for funding ?
Birdsarentreal
Student
a year ago
It's a fintech. Sorry for not specifying it on my post.
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@Catshowl @MetalMan20 @WittyFeed
I can totally relate to it. I'll share my experience.
Building a SaaS and raising our first cheque. Some stats,
- Team of 3 (no tier 1 or 2 grads, all tier 3, my 2nd startup, CTO is a decorated person, CMO is a dropout)
- Traction: 250 members on waitlist, $0 spent on marketing, waitlist growing 40% week on week.
- MVP under development (planned to release for the first 1000 waitlist members)
- 100+ one on one user interviews with Target audience.
Fundraising stats
- Opened the pre-seed round on June 1.
- Using the fundraising OS for documenting.
- Got 20+ 1st meetings, 6+ 2nd meetings, totally 75+ angels and VCs approached so far. 28 outright rejections.
We did a killer pitch deck and I wrote an investment memo which alone is converting into meetings (this is not to brag but the quality of memo and deck is top notch)
Some common feedback from VCs
- Memo is too good (we are encouraging our portfolio founders to write this)
- Deck is well made. Keep up the good work.
- We are convinced of the market and team. Idea is convincing but position it differently.
I planned to close the round by today (June 30). But didn't land a single term sheet yet. I don't know what mistake we are making. Is it my lack of ability to close deals (first fundraising exp.) or investors particularly invest based on strong background.
Also we are stuck in a chicken & egg problem, everyone who gave a meeting wants someone else to lead for them to co-lead. No one wants to take the first leap. Getting the first YES is quite challenging.
We need the fund for accelerating the product development. (Team + Tech infra)
Funding is really stressing me out and slowing our product development (I handle products). Rejections don't hurt, everything is just feedback. I want to know where we are going wrong, so that we can reiterate.
Any referrals/warm intros/suggestions is welcome. We can connect on telegram.
Birdsarentreal
Student
a year ago
Wow that's cool. Do you mind sharing your telegram username ?
LooseGoose
Stealth
a year ago
Follow Prateek Sanjay (based in Norway) on LinkedIn and read his posts and methodology of approaching investors. Try speaking to him for advice, he's pretty helpful and active online.
LooseGoose
Stealth
a year ago
As for MVP, I'd suggest using your own/team's resources to build it out. No one will give you money to build an MVP when others are already entering the market with their MVP in place.
I know it's difficult but it's the harsh reality. Fintech is extremely competitive but once you start getting customers it would become way easier to pitch for funding.
criticalresourceF99
Stealth
a year ago
Try crowd funding
treyhey
Stealth
a year ago
Any tier 1 grad in the team?
Birdsarentreal
Student
a year ago
Sorry can you elaborate on what do you mean by a tier 1 graduate ? 😅
treyhey
Stealth
a year ago
Its easier if there is someone in the team from tier 1 colleges (iits/nits etc)
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Discover More
Curated from across
Indian Startups on
by Kamlesh
Stealth
Times are a changing
Diversity split is still sad though, less than 10% female founders
Inc42 has found that over 60% of Indian soonicorn founders do not hail from IITs, and over 77% had a non-IIM background.
https://inc42.com/features/now-non-iit-iim-graduates-at-the-helm-of-indian-unicorns-growth-story/
