DARE - Because Entrepreneurs Do

Saturday, Feb 04th

You are here: Funding Venture Capital How to get VC funding
Follow us on Twitter

How to get VC funding

User Rating: / 26
PoorBest 

Even as the funding market hots up, it is still a story of too many entrepreneurs chasing too few VCs. There are a few things that help you improve your chances of getting funded

Sai Kumar (name changed) could not understand what was happening. He thought that he had all the right credentials and was there at the right time. An alumnus of one of the IITs, he had spent a decade and a half abroad, working on prestigious software projects. He then came back to India and set up a software firm with his own money. Unlike the many that opted for project and body shopping setups, Sai decided to go the product route. Five years later, there he was, with a product that he believed was as good if not better than what was available elsewhere and even a few marquee clients. And there were more clients to be had if only he could set up a good sales and servicing infrastructure. That was why he could not understand why VC after VC that he approached for funding was refusing to bite.

Sai Kumar is not the only one caught in this predicament. Take the case of Ganesh (name changed), who again was working on a product idea with teams in India and Singapore when he approached a well known VC firm for funding. The advice he got has put him off from approaching any other VC. “I was told that we will get a serious valuation only if we show sizable income and growth potential or if we can become a real threat to existing players or big competitors.” Or of Stanley (name changed), who gave up after talking to a few, discovering that they were just not interested in the sector he was operating in, even though his idea may be path breaking.

On the one side, we have reports of millions being invested daily into virtually unknown companies with seemingly me too ideas. Where is the disconnect? How do you as an entrepreneur looking for funds find the right VC? What else can a VC offer you other than funds?

Are you ready for a VC?
As an entrepreneur or a would-be entrepreneur looking for funding, the first question you need to ask yourself is whether you are ready for VC funding. The bad news is that your project may just not be in the stage or size to get a VC interested.

Different stages of a business idea require different levels and types of funding. Unfortunately, a profusion of business model competitions have lumped all these funding options under the umbrella of the VC leaving may entrepreneurs confused in the process. From a funding angle, a business can be divided into four stages – the seed or concept stage, the venture capital (VC) stage, the Private Equity (PE) stage and the initial public offering (IPO) stage.

The seed stage is when the business is pretty much an idea. You do not have a product or clients. Possibly you do not even have a team or a business plan. Perhaps a prototype is ready. And you know that you need more funds than can be organized by borrowing from friends and immediate relatives.

This is NOT the stage to approach a VC.

Laura Parkin has been on all three sides of the table. She has set up two entrepreneurial ventures with funding, has worked in a VC firm and now, as Executive Director of the National Entrepreneur Network regularly acts as an interface between budding entrepreneurs and various funding entities. According to Parkin, VC funding is really not for startup stage companies. “Other than seed fund, most VCs are looking for a proven business model and customers and would like to see their funds used to scale up the operations, rather than test a business model. Even Angels in India would like to see working prototypes”.

Unfortunately, many entrepreneurs choose to approach a VC at this stage; and get badly burnt.

This is the stage at which you should look for seed funding or Angel funding. Your funding requirements are smaller and more importantly your company is probably a long, long way away from value realization (IPO, acquisition etc.). Angels will also probably give you more of their time and expertise, which is very critical and important at this stage.

But, there are VC funds that do look at concept stage companies. GVFL (Gujarat Venture Finance) started by Vishnu Varshney, who is considered to be the father of the Indian venture capital industry is one who invests into concept stage companies. Varshney says that “if you are a startup or an early stage company, private funds will not give you the money. Most of them will ask you to go get the money from somebody else and bring it to some stage where they see fit to invest in. We don’t do that. We will be looking at even early-stage companies. More than 30% of my investees are at the concept stage. We do not wait for them to scale up. If the promoter is good, the concept believable and credible, we do not mind giving money to start-ups”.

The second stage, where you have a prototype, if not a product ready, have bagged a few customers or at least have a few customers interested and have a realistic business plan ready is when you should approach a VC for funding. Here again, too many business plan contests have spoilt it. You can make a great business plan in Excel, but what about market realities? Remember that a good VC like Varshney, who in seventeen years has received over 5,000 proposals, and has invested in 61 companies comes with experience across many companies and many, many business plans.



Comments (46)Add Comment
Need Funding to expand the business !!
written by prithvi1276, June 01, 2011
Hi,

We are in starting stage of the business in Technology training. Such the training industry in india is rapidly growing now a days. We given the training to Engineering / Computer graduations for their IT Career. Here we provide some specialized Advanced level of training in IT. We like to expand our business using with funding partners.

Kindly send your interest to raj@targetsoft.in
report abuse
vote down
vote up
Votes: +0
Financial Instruments For Lease
written by Muhsin Ali, March 26, 2011
I can deliver leased instruments to Organisations or individuals with their
preferred text verbiage as been approved by their bankers. We also proffer sales
option to interested buyers. Our terms and procedures are so flexible and
workable by RWA clients. Our lease rate is (5.5+0.5)%+x%. X% IS Lessee broker's
Commission and he determines his commission. Also we have facilities to discount
BG and Put you into PPP Trading.

Contact me through this email:(financialinstruments01@gmail.com) or through
skype: (muhsin.abid.ali) in other to furnish you with other information.
report abuse
vote down
vote up
Votes: +0
Networking solutions
written by Networking solutions, March 25, 2011
Really you have done great job,There are may person searching about that now they will find enough resources by your post,
report abuse
vote down
vote up
Votes: +1
hi
written by Cheap SEO, March 23, 2011
love it, will be waiting for your future posts
Thank you for sharing
report abuse
vote down
vote up
Votes: +0
dea
written by Water for Gas, March 14, 2011
really obliged for sharing wonderful information; I really enjoyed this article and wish more contents on the topic.SEO Services
report abuse
vote down
vote up
Votes: +0
Nice Post
written by Generic Viagra, March 03, 2011
Wow, nice post,there are many person searching about that now they will find enough resources by your post.Thank you for sharing to us.Please one more post about that..
report abuse
vote down
vote up
Votes: +0
Offer for BG/SBLC/MTN
written by Randy Brunger, March 03, 2011
We are direct providers of Fresh Cut BG, SBLC, MTN, Bonds and CDs which we have specifically for lease. We do not have any broker chain in this offer or get involved in Chauffer driven offers. We deliver with time and precision as sethforth in the agreement. You are at liberty to engage our leased facilities into trade programs as well as in signature project(s) such as Aviation, Agriculture, Petroleum, Telecommunication, construction of Dams, Bridges and any other turnkey project(s) etc. Our terms and Conditions are reasonable.

DESCRIPTION OF INSTRUMENTS:
1. Instrument: Bank Guarantee (BG)/SBLC (Appendix A)
2. Total Face Value: Eur/Usd 10M MIN and Eur/Usd 5B MAX (Five Billion USD).
3. Issuing Bank: HSBC London or AA rated Bank in Western Europe or USA.
4. Age: One Year, One Day
5. Leasing Price: 6% of Face Value plus 2% commission fees to brokers to be shared 50/50 between the brokers on both lessor/lessee side
6. Delivery SWIFT TO SWIFT.
7. Payment: Wire Transfer.
8. Hard Copy: Bonded Courier within 7 banking days.
All relevant business information will be provided upon request plus our terms and procedures:

If you are interested please contact me for us to proceed further

Regards,
Randy Brunger
Email: randybrunger@yahoo.com
report abuse
vote down
vote up
Votes: +0
hi
written by Amazon Promotional Code, February 20, 2011
I know what to do, thank you! And as this information is educational so this site has been added to my RSS feed for later browsing.
report abuse
vote down
vote up
Votes: +0
New startup
written by JamesRaj, February 19, 2011
Hi,
I am starting a telecom training and testing facility in bangalore. Looking for seed investor. Plan is to grow to 100 engineers in 4 years.

If interested please send contact info raj.james@gmail.com

regards
james
report abuse
vote down
vote up
Votes: +0
Nice Post
written by Networking solutions, February 17, 2011
Hi there,
Great post, Thanks for sharing to us
report abuse
vote down
vote up
Votes: +0
Nice Post
written by Networking solutions, February 17, 2011
Nice work, I would like to read your blog every day Thanks
report abuse
vote down
vote up
Votes: +0
...
written by maxobin, February 08, 2011
I am really obliged for sharing wonderful information; I really enjoyed this article and wish more contents on the topic.SEO Services
report abuse
vote down
vote up
Votes: +0
hi
written by Generic Avodart, February 07, 2011
Great
love it, will be waiting for your future posts
Thank you for sharing
report abuse
vote down
vote up
Votes: +0
hi
written by careprost, February 07, 2011
Great
loved it, will be waiting for your future posts
report abuse
vote down
vote up
Votes: +0
hi
written by lumigan, February 07, 2011
Excellently written article, if only all bloggers offered the same level of content as you, the internet would be a much better place.
report abuse
vote down
vote up
Votes: +0
BG,SBLC,LC,MTN,POF,CMO and DLC
written by Paul Brock, February 05, 2011

We wish to introduce our finance company to you.We are London Based firm that provides financial services to corporate bodies and individuals around the globe.We provide the following services effectively -project finance,business finance,consultancy,provision of financial instruments from top European banks.
Such instruments are BG,SBLC,LC,MTN,POF,CMO and DLC

We charge 1% in every transaction successfully concluded.We receive our payment at the end of a successful conclusion of the transaction.

Contact us for more details.

Paul Brock
chairman
Top Finance UK
15 Dock Street
London E1 8JL
United Kingdom
E-mail:topfinanceuk2011-101@yahoo.co.uk
Tel: + 447-924-003-115
report abuse
vote down
vote up
Votes: +0
hi
written by Generic Inderal, January 27, 2011
Thank you for sharing this knowledge .
Very innovative!! And far different from others!!
report abuse
vote down
vote up
Votes: +0
re:VC Funding
written by Networking solutions, January 11, 2011
Hello,

Thanks for this wonderful post...
report abuse
vote down
vote up
Votes: +0
Funding
written by Networking solutions, January 11, 2011
Really you have done great job,
There are may person searching about that now they will find enough resources by your post,
Networking solutions
Astrology Readings
report abuse
vote down
vote up
Votes: +0
good
written by careprost, December 31, 2010
Hi..
Nice post, I would like to request you to one more post about that **
Keep it up @@
report abuse
vote down
vote up
Votes: +0
good
written by Generic Cialis, December 31, 2010
Hey, Really great work,

I would like to join your blog anyway so please continue sharing with us,

Thanks
report abuse
vote down
vote up
Votes: +0
...
written by oem software, December 21, 2010
Hi, thank you for another essential article. Where else could anyone get that kind of information in such a complete way of writing? I have a presentation incoming week, and I am on the lookout for such information.
report abuse
vote down
vote up
Votes: +0
...
written by Phentermine Cheap, November 26, 2010
we are a fast growing private ltd company exporting organic foods& spices to USA and EUROPE .we need funding for expansion of our present capacityr
report abuse
vote down
vote up
Votes: +0
...
written by download divx movies, November 16, 2010

Nice! Now I know what to do, thank you! And as this information is educational so this site has been added to my RSS feed for later browsing.
report abuse
vote down
vote up
Votes: +0
...
written by Jim, November 08, 2010
Nice site

iPhone Without Contract
Government grants for women
Spray Foam
New York Sightseeing
report abuse
vote down
vote up
Votes: +0
...
written by faxless payday loans, October 29, 2010
It's so nice!I like it so much! Thank you for you give me so wonderful information.
report abuse
vote down
vote up
Votes: +0
...
written by mafia wars cheats, October 25, 2010
I am posting here just to let you know that you are doing a good job by keeping us posted about this. Please keep on posting such quality articles as this is a rare thing to find these days. I am always searching online for articles that can help me.
report abuse
vote down
vote up
Votes: +0
re
written by http://www.buyphenterminecheap.com/, October 14, 2010
I think India is most growthin country nowadays.
report abuse
vote down
vote up
Votes: +0
organic food export
written by sanjay vishwakarma, October 11, 2010
ours is a new private limited company exporting organic food and spices to USA and EUROPE .in a very short span of time we were able to get export orders form world famou s companies and executed them successfully.more &more export orders are coming our way .we have our own cultivatin facility which is also expanding very fast.we have funded the whole business from our own resources.we need funding for expansion of our production base,execution of export orders in time & to implement our new ideas.contact us on dr_svishwakarma@yahoo.co.in
report abuse
vote down
vote up
Votes: -1
organic food export
written by sanjay vishwakarma, October 10, 2010
we are a fast growing private ltd company exporting organic foods& spices to USA and EUROPE .we need funding for expansion of our present capacityr
report abuse
vote down
vote up
Votes: -1
http://spbbron.ru
written by http://spbbron.ru, June 30, 2010
Hmm ... Thanks. I just
now started to disassemble
the servlets...so was useful.
only I wonder what will happen to them, because "Sun" bought ...
http://spbbron.ru
report abuse
vote down
vote up
Votes: +0
http://welcome-re.ru/
written by JerryMirro, May 25, 2010
The difference of course is you can use many of the other tools you mentioned today. Not so much with Avairy. I am sure its a better product, but its also an unreleased product so the comparison losses some merit.
Недвижимость в Карелии
report abuse
vote down
vote up
Votes: +0
http://ambienbuy.net/XANAX.html
written by http://ambienbuy.net, May 05, 2010
This is an excellent article, thank you very much for it,
I have found here much useful information in
buy ambien
report abuse
vote down
vote up
Votes: +0
http://ambienbuy.net
written by marshal, April 23, 2010
It's quite nice, although I liked and not all pictures.
But as a whole they...
http://ambienbuy.net
report abuse
vote down
vote up
Votes: +0
Funding for a product ready (ready, tested and in market) company for next stage
written by Sudhir Gandotra, November 08, 2009
OpenLX Linux is the First indian Linux that gives the compelling Desktop as well as Enterprise Server grade product to its users. While being free to download, the revenue model is based omajorly on Services to enterprise, Training and Suport.

OpenLX Linux was judged as the best Operating System in 2008.

KalCulate is the First Linux based financial accounting package, worldwide.

Together, this gives an Affordable, Secure and Friendly (also Virus-free) business desktop to users.

The products are ready, test marketing done with good results and now we are looking for a funding partner to take it to National and then International levels.
Additionally, we ofer Linux based services, support, training and maintenance.

During the test-marketing, we have created thousands of users, distributed over 2,00,000 copies apart from hundreds of thousnads of downloads from ours and other servers. Various people have resold our product through their sites.
We created channel partners across india and found that the product can become hot-selling item, if backed by promotion and support. This is what brings us to the stage of looking for a VC / Funding partnet.

Linux is becoming relevant as economy is on downslide. Linux based Open-source has grown 22% over the last year.
Linux offers the Affordable, Secure and Friendly environment to users, who then, don't have to bother about viruses and frequent break-downs.
OpenLX + Kalculate gives the compelling offer of business desktop, that works, works and just works.

More details can be obviously provided to the interested VC / funding partner.

Sudhir gandotra. sudhir@openlx.com
report abuse
vote down
vote up
Votes: +0
Funding for a product ready (ready, tested and in market) company for next stage
written by Sudhir Gandotra, November 08, 2009
OpenLX Linux was judged as the best Operating System in 2008.
KalCulate is the First Linux based financial accounting package, worldwide.
Together, this gives an Affordable, Secure and Friendly (also Virus-free) business desktop to users.
The products are ready, test marketing done with good results and now we are looking for a funding partner to take it to National and then International levels. More details can be obviously provided to the interested VC / funding partner.
report abuse
vote down
vote up
Votes: +0
Wish there were better ways of nurturing innovation
written by M A J Jeyaseelan, September 11, 2009
Innovation is the best of all forms of capital, because it alone creates new values.

Innovation is also the most significant yield of the investments that a country makes in the educational sector

Yet, I am yet to come across countries that have built mechanisms to take the maximum advantage of innovations.

Innovations are treated, unfortunately both by governments and academicians as a matter of risk taking and hence most could avoid it.

Innovations are what has brought human civilization this far and would decide the pace of development in future.

It is only those countries that do not leave the all important task of nurturing innovations to the whims and fancies of fund managers would reap good harvests in future
report abuse
vote down
vote up
Votes: +2
VC Round to Complete Fund Raising
written by Abhay N., April 08, 2009
Manufacturing technology professionals seeking financial partners. 2 year old, early stage, founder raised, pre-revenue company, with global footprint. Alternate advanced manufacturing technology. USP: To reduce weight and cost of structural parts, mainly automotive, which is key business driver today. Founders are recognised experts with 20+ years of cumulative global experience. Excellent reputation and credibility of promoters and company in domestic and global market. Helped many OEMs in last 2 years to cut costs and improve products. Focussed on technology and IPs. Focus on "process ownership" and not product and hence multi-product production and high growth potential. Proof-of-concept proto ready for technologies with extremely high demand. Interest from numerous automotive OEMs. Signed collaborative agreement with them for development. Further new concepts to be honed on proto scale.

Seek investment in the range of 1-3M USD for setting up development trial proto facility scaleable for production in India. An investment of 1M is already committed through Canadian Angel. Detailed business plan available. Exit options from 3 year end onwards. RoI > 30%. Revenue 50M USD by year 5. Addressing market size of USD 30Billion. Scale up: Global.
report abuse
vote down
vote up
Votes: +1
Healthy food
written by Bharati, April 05, 2009
Hello All,
I represent Olive Touch, a health food supply and service company.

Olive Touch has been operational for 9 months now and has provided services to several corporates and individuals in the form of regular food services and nutritional consultations. Olive Touch is differentiating itself from other food services in the manner of food preparation and the amount of attention to detail that is given to every serving. We have vastly experienced chefs and dieticians on-board who provide their expertise in the operational and cooking process.

At the moment Olive Touch is looking to expand its operations and setup more central kitchens that will help us market our services better. In this regard we are looking for investors who can help us grow and provide us with an impetus to excel in our services. If provided with an opportunity, we will be glad to share our expansion plans and the reasons why we think we can succeed.

Kindly share your email id with me.

Regards,
Bbharati
report abuse
vote down
vote up
Votes: +0
Regaeding VC Funding
written by Shailesh Pisalkar, March 28, 2009
Dear Sir
We are working as Ngo for the Poor people, our Support go's through income generation allied activities at present we are working with SHG consortium for Pulses production. In this regard we need venture capital Support for us kindly u go through our profile. looking for healthy partnership Your's
Shailesh Pisalkar
Secretary
BDBGVS
report abuse
vote down
vote up
Votes: +2
Require VC funding
written by Arpan Deb, March 09, 2009
My venture is past the concept stage and is already running well with many clients and a healthy revenue flow.

I run a very small web solutions company, with a twist. Very few people or companies in India do what I am doing, and my products and services
are selling very well.

But for this to grow, it needs proper mentoring and an infusion of funds.

I buy websites and domains that are not performing well , at very cheap prices, turn them around in a matter of weeks and sell the websites for a profit or we retain them and sell advertisements, traffic and co-brandings on them. I have found the literal sweet spot.

I started this two months ago and my monthly turn over is already Rs. 2.8 Lacs, with just 40 web sites. Currently my wife does the selling and marketing and I look after the acquiring of sites, negotiations. We get 3 new clients a day on an average. And a phenomenal 87% of my customers place repeat orders.

But for this to grow, it requires serious infusion of funds to hire high quality human capital and spread the positions across 100's of online properties.

With ever increasing online ad spends and branding exercises, my venture is well poised to make a killing.

I am looking for an investor and a mentor to invest roughly 1 crore to increase the monthly turnover to Rs. 40 Lakhs and more.

I am looking to expand the operations into a full fledged one, with hundreds of websites and a team of professionals to handle them and provide other related services to my existing list of clients.

Arpan
arpan.deb@gmail.com
report abuse
vote down
vote up
Votes: -1
SEED FUNDING PROVIDED: IT SECTOR (WEB DVELOPMENT ON PHP, MYSQL/INTERNET MARKETING)
written by GAURAV BANSAL, March 05, 2009
we are interested in seed funding to the IT startups, with strong fundamentals . The company/startup should have the core expertise on web development(php,mysql)/internet marketing(seo,smo,ppc,ad agency). Young , dynamic founders are invited, with a v.strong team and expertise .
feel free to contact.

Regards
Gaurav Bansal
Executive Director
Eduvision India Services
report abuse
vote down
vote up
Votes: +1
vc funding upto 50 lakhs
written by dhiraj, February 24, 2009
i m plannig to start a rose polly house project on my piece of land. i do not have money bank ready to finance upto 1.5 cr ie 75 percent of my project i m short of remaining 50 lakhs only .can i have ameet to discuss the same in details which will show the profitts of the projects.
report abuse
vote down
vote up
Votes: +2
Is it worthy to have so many products/solutions in baskets
written by B.C.Chechani, October 24, 2008
I think one can not focus to promote muliple products and it is one of the negative point while approaching VCs
report abuse
vote down
vote up
Votes: +0
President & CEO Venture Catalyst
written by Tom Iyer, October 15, 2008
Dear Kalyan,

Looks interesting. Send me an email at t_iyer@yahoo.com giving your contact details & then let's talk. May be i would be able to help you.

Regards,
Tom
report abuse
vote down
vote up
Votes: +0
requires vc funding
written by kalyan kumar, September 25, 2008
Dear. Sir/Madam

This is a proposal under consideration of business growth perspective. ‘NKCS Pvt ltd’ is a Bangalore based software and management firm that cater into the vertical domain, we are one of the outsourcing company too. We outsource application on different domain.

I am Ch kalyan Kumar director of NKCS Pvt ltd. We have implemented a hospital information system in India last week, with in a week we have got over 58 clients. Now we are looking for Partners/Investors/Venture Capital Funding to promote & market this unique product to capture this large untapped market in India. If you are interested please let me know.

The following are some of the unique features of this product

Health Online is unique and novel software that can greatly impact the health care sector by providing low cost customized solutions for day to day management of patient information.
Health Online is a the web based hospital information system that can integrate services provided by hospitals, clinics, medical practitioners, diagnostic centers, blood banks, health insurance companies, TPAs & medical colleges that will benefit patients across the world.
With the help of Health Online, patients can directly interact with the doctors of their choice for telemedicine and treatment. Doctors will be able to monitor the progress of patient’s health condition after their discharge from the hospital without the need for physical presence of the patient. The software also includes options for searching blood availability, emergency medical response and easy and quick health insurance claims settlements. Our goal is to make this highly resourceful product reach small and remote health care entities so that it can make health and allied services to be more efficient and reliable

Benefits of Health Online
Totally Paperless Automation
Automated Reception
Wizard for the Doctor
Virtual Doctor
Blood Search
Doctor Search
Hospital Search
Ambulatory Search
Beauty Centers Search
Emergency Centers Search
Online Appointment
Electronic medical record
Insurance Claim
Healthcare Jobs
Online Blood search from networked blood banks
The online appointment scheduling system will enable your patients to make
appointments with your practice online 24/7.Most Economical & Secure
Configuration

Market Analysis Summary

Presently there are over 1, 46,000 hospitals in India, out of which about 26,000 hospitals are big hospitals /larger facilities (200+ beds).
The total target market potential represents Rs.3, 200 crore per annum.


Small company need to have group effort to encash the opportunity. We are throwing up an offer to your nurturing company to get associated on promoting as well as maintenance & development partner to encash the growing market.

Apart from that, we have below mentioned applications ready.

Our applications are:
HIS: Hospital Information System
HMS: Hospital Management System
PMS: Pharmacy Management System
ERP: Enterprise Resource Planning
CRM: Customer Relationship Management
CMS: Content Management System
MMS: Mass Mailing System
CMS: Consultancy Management System
CMMS: Computerized Maintenance Management System
HRMIS: Human Resource & Management Information System
SMS: School Management System
Accounting Software
Web designing and web developing
Employee Attendance Tracker

We look forward for positive response from you

With regards
Kalyan Kumar
Director
kalyan2201@gmail.com
NKCS Pvt Ltd


info@sidbiventure.co.in
report abuse
vote down
vote up
Votes: +3

Write comment
smaller | bigger

security code
Write the displayed characters


busy