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.
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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.

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OpenLX Linux was judged as the best Operating System in 2008.
KalCulate is the First Linux based financial accounting package, worldwide.
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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.
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Sudhir gandotra. sudhir@openlx.com
written by Sudhir Gandotra, November 08, 2009
KalCulate is the First Linux based financial accounting package, worldwide.
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Innovation is also the most significant yield of the investments that a country makes in the educational sector
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written by kalyan kumar, September 25, 2008
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
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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.
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