StartupTalky

Tag: seed funding

  • What Should a US Startup Go For – Business Loan or Funding?

    Building your own startup is a craze nowadays, people in the USA with innovative ideas are ready to take a risk and start their startup once. But there comes a stage in the journey of every startup when they need huge capital to sustain and boost their business growth, and this is where they start looking for ways to get those funds.

    Business loans and Equity fundraising are the two main ways to accumulate funds to start or grow a business. Since both of them have their advantages and disadvantages, as a business owner, it depends on you which one you choose.

    To choose the best option from these two, you need to be aware of their pros and cons. For some people, business loans come out to be the best option while for others Funding is the best option. So, here in this article, we mentioned the advantages and disadvantages of business loans and funding. This will give you a roadmap for choosing the best one.

    What Is a Business Loan?
    Advantages of Business Loan
    Disadvantages of Business Loan
    What Is a Funding?
    Advantages of Funding
    Disadvantages of Funding
    Business Loan vs Funding: Which One Is Better for You?

    What Is a Business Loan?

    A business loan is a kind of loan which you take from lenders to fulfil your working capital needs. The lender may be a bank, financial institution, or investor. They charge a fixed interest rate on the principal amount of money, after a certain period of time. Interest rates are not fixed and it varies from lender to lender. you might get a loan at a low-interest rate from any lender or sometimes you need to pay a high-interest rate depending on different factors.

    Advantages of Business Loan

    Flexibility for loan repayment

    Paying off the existing loan amount will remove a huge burden from an entrepreneur. You’re more focused on your business growth and management when you are not in debt. Although you’ve taken a loan to fulfil the working capital need for your business, if your business performs very well and you are capable of paying the existing debt, then a business loan has the flexibility to repay the loan early.

    Keep in mind that when you pay the loan early, many lenders charge a prepayment fee, which is around 1% of your loan amount. Also, you might miss the benefit of tax exemption on the interest you pay for your loan. So do your math and decide whether you should pay the loan early or not. If the total interest on the loan is higher than the prepayment fee, then you can pay the loan early and free yourself from debt.‌‌

    Availability of Government scheme for loans

    US Government always tries to promote businesses because they give a boost to the economy. The ways are different but the intention is the same, to promote the business. Providing loans to small and medium businesses is one of the ways the American government supports the newly born business.

    In 1953, the Small business administration (SBA) was formed in USA to support small businesses in terms of capital and counselling. So you can leverage the benefit of this government scheme to easily get a loan from an SBA-accredited lender. The interest rate may vary from lender to lender based on your credit score and other factors.

    Ownership remains intact

    One of the most important benefits of taking a business loan is that your ownership remains intact, and there is no dilution of your equity. You have full control of your business and you’re free to take any business-related decisions without the interference of any investors.

    You are the decision maker and you don’t have to share your profit with any third-party investor. So go for the business loan if you have faith in your business plan and at the same time you don’t have to dilute your ownership.

    Disadvantages of Business Loan

    You need to prove your creditworthiness

    Everyone wants to earn some money and the same is true for lenders also. They are providing you with the money because they expect some interest in it. so to make sure that they are not giving their money to the wrong person, they see your creditworthiness.

    A credit score is the one factor that every lender considers, but at the same time, they also see your assets and your past credit behaviour. Your business plan doesn’t put much influence on the lender because they don’t have to do much with your business, they only need their money back with interest. So you need to prove your creditworthiness to the lender to get a loan, otherwise, you might end up taking a loan at a higher interest rate.

    Difficult to acquire a loan

    Since you need to prove your creditworthiness to the lender and if your credit score and credit history are not good, then most probably your loan application will be rejected. It is not easy to get a loan at a cheaper interest rate without proper credit behaviour.

    Lenders also check your assets, and if you lack in this also, then it’s very difficult to get a loan. You might arrange a loan from somewhere but the chances are the interest rate would be higher than expected.

    Lenders have the first right to your assets

    Finally! After so much hassle and paperwork, you get your loan money in your hand and you are now using this money to fund your business. But suppose, your business is not performing well and doesn’t meet your expectations. If you are not able to repay the loan in time, then you might be shocked but the lenders have the first right to your assets.
    They have the right to sell your assets and recover their loan. So these are the few disadvantages of taking a business loan you must be aware of.

    What Is a Funding?

    Funding is one of the most prominent ways to raise funds for your business in the USA. You have to approach an investor and showcase your business plan. You need to convince the investor that you and your business plan have the potential to convert this startup into a giant company.
    Once the investor is ready to invest in your business, then they will become a part owner of your startup by owning some equity shares.

    Advantages of Funding

    No burden of repayment

    Equity fundraising comes with many advantages and the most prominent one is – you don’t need to repay the money you’ve raised. By giving equity shares to investors, you basically made them part owners of your company. Hence, if there is any loss in the business, it’s not only your loss but the loss of investors also. Similarly, if there is any profit, then that is not only your profit but also the profit of your investors. Since you don’t have the burden to repay the capital you’ve raised, then you become more focused on your business growth.

    Guidance and help from the investor

    As a new US-based startup, you might not have much experience with how this startup economy works, here the guidance and expertise of an investor will help you to accelerate your business growth. Since investors have some sort of experience in the field, their guidance and help will act as the cherry on the cake for your business.

    You are the one who is responsible for your business, investors don’t only invest their money in your business potential but also in you and your faith in your business growth. They will help you with their valuable advice, but at the end of the day, it’s your business and you have to take care of it.

    Increase in the valuation

    Whenever you raise money from funding, the valuation of your startup increases simultaneously. The valuation of a company is the clear-cut indicator of business growth, revenue, and size. In different funding rounds, you and the investor agree on a certain valuation of your company based on how your business is performing.

    If the business growth is extraordinary then you can ask for a large number of funds by diluting less equity. The higher valuation of your startup will help you in future fundraising and also provide benefits in acquisition and merger.

    Disadvantages of Funding

    Equity is diluted

    In simple words, Equity means ownership, how much you have the right in a company. Whenever you raise money, the dilution of equity shares happens, which will decrease the percentage of ownership in the company. So you need to be conscious that you should not be the minority shareholder in your company, because this is your startup.

    Let’s take an example, suppose there are a total of 100 shares in your company and 5 shareholders with 20% each. It means each of them has 20% ownership of the company. Suppose you want to raise money and offer 100 extra shares, and a single investor comes and buys all the shares.

    Now understand the new shareholding pattern, the total outstanding share becomes 200. Since the new investor has 100 shares, so he becomes a 50% owner of the company while the other 5 shareholders become 10% each. As you can see, the ownership of the existing shareholders reduces from 20% to 10% because of share dilution.

    You need to prove your business potential

    To win the trust of the investor and convince them to invest in your business, you need to prove the potential of your business. For example, how your business is different from other businesses in the industry, what is your USP, what is your future plan, and a lot more.

    Investors only invest in the businesses where they see growth in their investments. Now it’s your duty to convince the investor that you and your business have the capabilities to generate multi-bagger returns on their investment.

    Decision conflicts

    When there are more decision-makers in the company, there are chances of conflicts in the decision. Everyone has their point of view, some might agree with your point and some might not agree, hence more decision-makers turn out to be conflicted in their decision-making.

    Lengthy and Complex process

    The process of equity funding is complex and lengthy because a lot of paperwork goes hand in hand. Before pitching the investor you need to take care of the financial reports of your business that indicates your business performance.

    You need to take care of the different compliance before and after funding. It’s better to hire a professional who takes care of all the paperwork and focuses on pitching the investor efficiently so that they become ready to invest in your startup.

    Business Loan vs Funding: Which One Is Better for You?

    Both options have their advantages and disadvantages as we have mentioned above. Which one is better for you depends on which type of convenience you want, like, if you don’t want any burden of a loan repayment then go for funding but if you don’t want to dilute your equity shares then go for a business loan.‌‌

    Figure out which type of advantage you want and select the option based on that. Every coin has two sides, if there is a benefit in something then might be they have a certain downside.

    Conclusion

    The US government always tries to promote businesses with different schemes. Business loans and funding, both are great options. Because you are a startup and creating a foundation to build your empire, so you must choose the option very carefully. If you take care of all the above-mentioned facts into perspective, then most probably you will make a better decision.

    FAQ

    Is it a good idea to get a loan to start a business?

    Loans help your business grow and a business loan will cover the upfront costs of expansion and allow you to make profitable growth.

    ‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌How much can I get for a startup business loan?

    Startup loans typically range from $9,000 to $20,000. Startup loan decisions are made differently from other forms of business financing.

    What do I need for a startup business loan?

    If you’re starting a business, you need money. So having a strong personal credit score and stable income will help you qualify for financing. A good credit score starts at around 690 to get a loan.

  • Startups Funded by Google Ventures | GV Investments

    There is almost no big company or enterprise that didn’t start from scratch. From Tesla to Apple to Pixar, most of them started off with a great idea, lots of effort, and a small garage. With every passing day, entrepreneurs come up with amazing startup ideas and newer methods to implement them. This, however, is easier said than done, since startups need both funding and support along with immense hard work in their initial days to be successful. As part of its funding program, Google has helped some of the top startups, and some of those startups have become well-known companies.

    This is where equity and venture firms come in. If they find the idea behind a startup reasonably adequate, they make the initial and much-needed investment in the startup. Blackstone and Apollo Global Management are some equity investment firms, while Google Ventures is a venture investment firm. But before knowing what startups are funded by Google, let’s find out how funding works.

    How does Startup Funding Works?
    Google Ventures
    Startups Funded by Google

    1. Slack
    2. Uber
    3. Medium
    4. StockX
    5. Stripe
    6. GitLab
    7. DocuSign
    8. Magenta Therapeutics
    9. One Medical
    10. Zipline
    11. Farmer Business Network
    12. Sense
    13. Scribble Data
    14. Jio Platforms
    15. Wysa
    16. Dailyhunt
    17. Glance

    How does Startup Funding Works?

    Apparently, there are certainly different kinds of funding based on factors such as startup valuation, its customer base, strategy, revenue model and other technical factors. These funding are categorized as follows:

    • Pre-seed Funding– This is the earliest stage of a startup, and the funding here is mostly the initial investment in the idea and is done by the founders themselves. This stage isn’t even officially included in the funding rounds, however, it is where a startup begins.
    • Seed Funding– This is where the first official investment for a business or a venture is made. Seed funding helps startups take the initial steps towards making their products. While the failed startups never go beyond this stage, the one’s that do, proceed to the Series A round.
    • Series A Funding– Once a startup or company has surpassed Seed round, has an established user base, and offers its services or products, they can opt for Series A Funding. This is where startups can use the investment money to further optimize their product, and raise anywhere from $2 million to $15 million.
    • Series B Funding– After Series A, this round helps a business to advance to the next level. If the company has justified the initial investment with a strong customer base and valuation, Series B funding helps to take the business to the next level. The investment in this round can range from $30 million to $60 million.
    • Series C Funding– The businesses which are already successful and are looking to build new products to touch newer markets are funded in this round. The companies in this round may also acquire startups and the investors and founders in this round look for exponential growth. The valuation of companies in this round can range in hundreds of millions.

    Although there can be more funding rounds corresponding to the alphabet, these are particularly the one’s where most startups reach. There is also private equity funding away from public markets in which private companies can finance startups privately.

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    Google Ventures

    Google Ventures is a venture capital investment firm of Alphabet, the parent company of Google, CEO is David Krane. Renamed to GV, the primary objective of Google Ventures since its conception has been to back founders with a vision for the future of entrepreneurship. GV has funded over 500 portfolio companies and is in constant search of new and industry-changing ideas and startups.

    GV flaunts a team of founders, physicians, and other professionals, who have been in the startup ecosystem for a long, and understand it more than most people. This team of specialists, engineers, advisors, and fund operatives help GV to solve challenges and deliver feedback to create better services. GV invests across all stages and sectors, with a focus on enterprise, life sciences, consumer, and frontier technology. GV has made 988 investments so far. Recently on July 29, 2022, GV made a $3.3 Million investment in New York-based consumer Software, Studio.

    Google Ventures on Investment in Startups

    Startups Funded by Google

    Slack

    Industry: Enterprise Software
    GV Investment: $110.8 Million

    Slacks | Google Ventures | Startup Funded By Google
    Google Ventures | Startup Funded By Google

    American software company Slack Technologies developed the proprietary business communication platform Slack. Slack offers a number of IRC-style features, including persistent chat rooms organized by topic, private groups, and direct messaging. Google Ventures invested $110.8M in October 2014.

    Uber

    Industry: Transportation
    GV Investment: $1.8 Billion

    Uber | Google Ventures | Startup Funded By Google
    Uber | Google Ventures | Startup Funded By Google

    Who in the digital world isn’t aware of the most popular cab service Uber? It has turned out to be one of the most popular cab booking services around the globe, and both cab drivers, as well as people who need them use it on a regular basis. It is a consumer service and has also set its foot in the food delivery services. Uber has offered quality, door-to-door service and continues to do so by constantly introducing safety features in its Community Guidelines. Uber has been Google Ventures’ biggest investment to date. Google Ventures has invested approximately $1.8 Billion in Uber.

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    Medium

    Industry: Digital Media
    GV Investment: $19 Million

    Medium | Google Ventures | Startup Funded By Google
    Medium | Google Ventures | Startup Funded By Google

    Medium is a blogging platform that suggests viewers blog through smart algorithms. World-class publications and experts publish their blogs in different niches, and viewers can choose their preferred subjects to read the latest research papers, articles, and blogs. The popularity of Medium attracted Google’s interest and they invested. Medium currently flaunts its user base of 170 million users and counting, with the writers including journalists, authors, experts, and individuals.

    StockX

    Industry: Stock Market
    GV Investment: $22 Million

    StockX | Google Ventures | Startup Funded By Google
    StocksX | Google Ventures | Startup Funded By Google

    As described by Google Ventures, StockX is the world’s first ‘Stock Market for Things’. This is an online marketplace where both buyers and sellers put forth the bidding and asking amount, and as soon as both of them meet, the transaction takes place. The marketplace that StockX offers can be used to sell any sellable product from sneakers to watches; all you need to do is sign up. Google ventures and battery ventures invested $44 M in series B funding.

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    Stripe

    Industry: Digital Payment
    GV Investment: $600 million (along with other investors)

    Stripe | Google Ventures | Startup Funded By Google
    Stripe | Google Ventures | Startup Funded By Google

    Stripe is one of the most popular payments processor for online transactions and in mobile applications. Today, millions of online and offline businesses from startups to bigger enterprises use Stripe as their payments processor. Be it Software as a Service, an online platform or your marketplace, Stripe can be used in all these cases either through the software or its API.

    “Stripe is the best way to accept payments online and in mobile apps.” says Google Venture.

    GitLab

    Industry: Software
    GV Investment: $20 Million

    GitLab | Google Ventures | Startup Funded By Google
    GitLab | Google Ventures | Startup Funded By Google

    GitLab is a DevOps platform that accelerates development through collaboration and automation. With various organizations relying on its source code, CI/CD, and security, GitLab offers powerful automation with real-time security and vulnerability management. Moreover, GitLab is trusted by some well-known industry-leading companies including Nvidia, Siemens, and Drupal. GitLab has received funding from Google Ventures in both Series C and Series D rounds of funding.

    DocuSign

    Industry: Software
    GV Investment: $8.1 Million

    DocuSign | Google Ventures | Startup Funded By Google
    Docusign | Google Ventures | Startup Funded By Google

    A leader in eSignature transaction management, DocuSign has become an industry and global standard for eSignatures. DocuSign gained popularity with the help of Google. DocuSign has garnered a user base of over 500k customers and hundreds of millions of signers. DocuSign was introduced and established based on the fact that most modern businesses will need to go online and hence the online document management needed to be taken into consideration. Google Ventures invested in Series D round in June 2012.

    Magenta Therapeutics

    Industry: Healthcare & Life Science
    GV Investment: $8 Million

    Magenta Therapeutics | Google Ventures | Startup Funded By Google
    Magenta therapeutics | Google Ventures | Startup Funded By Google

    Magenta Therapeutics is a leading expert in harnessing stem cell biology for safer transplants. It endeavours to reset a patient’s immune system through stem cell transplant to cure diseases such as blood cancer. It is also developing novel medicines through commitment and excellence. Also, Magenta is revolutionizing medicine by precisely removing disease-causing cells and revamping stem cell mobilization.

    “Magenta is harnessing stem cell biology to make transplants safer and more effective for patients with immune and blood-based diseases.” Says Google Venture.

    One Medical

    Industry: Healthcare
    GV Investment: $13 Million

    One Medical | Google Ventures | Startup Funded By Google
    One Medical | Google Ventures | Startup Funded By Google

    One Medical is currently trying to reinvent healthcare with innovation and technology. As of now, One Medical offers and schedules in-person or over video appointments, 24/7 on-demand video chats with a virtual medical team, over 90 drop-in lab services, along COVID-19 testing and care. Moreover, OneMedical acts as an employee benefits partner for over 7000 companies. Google Venture invested Private Equity round of funding in December 2015.

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    Zipline

    Industry: Robotics
    GV Investment: $12 Million

    Zipline | Google Ventures | Startup Funded By Google
    Zipline | Google Ventures | Startup Funded By Google

    Zipline is a company that delivers life-saving medicines and drugs to remote and previously unreachable parts of the world using electric planes and drones. It makes precise, on-demand and critical deliveries, wherever and whenever needed, with safety and reliability. The access to on-demand delivery is made global, owing to Zipline, and it seeks to replace the traditional delivery system with customer-centred and cutting edge technology. Google venture Invested in Series C round of funding in May 2019. In the last funding round in June 2021, Zipline has raised a funding of $250M which made the startup valuation to be $2.5 billion.

    Farmer Business Network

    Industry: AgriTech
    GV Investment: $15 Million

    Farmers Business Network | Google Ventures | Startup Funded By Google
    farmers Business Network | Google Ventures | Startup Funded By Google

    Farmer Business Network is a tool that helps farmers understand and enhance their crops and yields with advanced insights and real-time data analysis. It is a global Agritech company and seeks to help farmers reduce production costs, maximize crop yield and output, and make informed and confident decisions when it comes to crops. Farmer Business Network can help farmers manage contracts, select seeds, monitor fields, and organize operations with premium crop marketing and financial services. FBN raised a funding of $15 million in 2015 from Google Ventures. Recently, they raired $870 million in series G funding round in November 2021.

    “Farmers Business Network generates powerful insights from real-time data to help farmers understand and improve their crop performance.” says Google Venture.

    Sense

    Industry: Artificial Intelligence
    GV Investment: $16 Million

    Sense | Google Ventures | Startup Funded By Google
    Sense | Google Ventures | Startup Funded By Google

    Sense is an artificial intelligence-driven talent engagement and communication platform that was founded by Dharni and Pankaj Jindal in 2015. The company has its headquarters in San Francisco and is known for providing enterprise-ready solutions that provide a system of engagement for talent acquisition teams.

    Sense has so far helped many companies find, recruit, deploy talent and automate manual tasks for recruiters. The company has raised $16 million as part of its Series C round from Avataar, Google Ventures, Accel and Khosla Ventures. The company is said to use these funds to get a foothold in the Indian market, add new products, expand its team and go into newer geographies.

    Scribble Data

    Industry: Machine Learning
    GV Investment:

    Scribble Data | Google Ventures | Startup Funded By Google
    Scribble Data | Google Ventures | Startup Funded By Google

    Scribble data is an ML engineering product company that offers ML Feature Store for mid-market enterprise data teams.  The company is known for its flagship product known as Enrich, which is a highly customizable Machine Learning Feature. Scribble Enrich is a store product that allows data scientists to develop and manage production-ready datasets that are used to train ML models faster and with confidence.

    Data-driven companies such as Google and Amazon have invested an undisclosed amount of money into the company in May 2020. Google funding for startups such as Scribble, has helped the platform to scale and deliver Enrich in international markets for enterprise-grade Machine Learning products.

    Jio Platforms

    Industry: Telecommunication
    GV Investment: $4.5 billion

    Jio | Google Ventures | Startup Funded By Google
    Jio | Google Ventures | Startup Funded By Google

    Jio Platforms is an Indian technology company and a subsidiary of Reliance Industries. The company has its headquarters in Mumbai, Maharashtra. The company acts as a holding company for Jio (which is India’s largest and the world’s third-largest mobile network) and other digital businesses of Reliance. As of 2020, Jio platforms became the fourth largest Indian company by market capitalization.

    In November 2020, Google-funded $4.5 billion to the Jio platform, which makes it the biggest-ever investment in an Indian company. Google now reportedly holds over 7.73% share in the company. The company has now raised a total of Rs 1.52 lakh crore by selling an almost 33% stake to over 13 financial and strategic investors in under 11 weeks. This will help the company to cut down Reliance’s net debt target for the full fiscal year.

    Wysa

    Industry: Artificial Intelligence
    GV Investment:

    Wysa | Google Ventures | Startup Funded By Google
    Wysa | Google Ventures | Startup Funded By Google

    Wysa is an AI-enabled life coach designed especially for mental and emotional wellness. The company was initially launched in 2017 and provides its users with the ability to activate coach and chat anonymously. The company provides early intervention through 3 methods, which are an AI chatbot, a library of self-help tools, and messaging-based support from human psychologists.

    Google Ventures India, has funded an undisclosed amount in the AI Platform in May 2021. Wysa was a part of the first batch of 10 startups for Google Launchpad Accelerator India, which was held in 2018. In 2021 however, the Sleep by Wysa app was awarded the best app by the Google Play Store. According to Crunchbase, the company has so far raised $3.9 million from three funding rounds.

    Dailyhunt

    Industry: Social Media
    GV Investment: $33 Million

    Dailyhunt | Google Ventures | Startup Funded By Google
    Dailyhunt | Google Ventures | Startup Funded By Google

    Dailyhunt is one of the leading Indian content and news aggregator app. The company has its headquarters in Bengaluru, Karnataka. The platform provides news in 14 Indian languages from multiple content providers to over 300 million users. In 2015, Dailyhunt became the largest Indian language distributor of e-books having 70,000 titles in ten languages.

    As of December 2020, Dailyhunt has raised over $100 million from Google, Microsoft and AlphaWave among other investors. Google funding rounds helped the company become a Unicorn as its value increased to over $1 billion. The company is planning to use the funds to scale its Josh app, which is an augmentation of local language content offerings. Google-funded startups in India with a budget of over $10 billion over a few years.

    Glance

    Industry:
    GV Investment:

    Glance | Google Ventures | Startup Funded By Google
    Glance | Google Ventures | Startup Funded By Google

    A google-funded startup called Glance is a startup that was founded in 2018. The company serves news, media content and games on the lock screen of more than 100 million smartphones. The company is a subsidiary of InMobi Group and is known for using AI to offer a personalized experience to its users.

    The company raised over $145 million in a new financing round from Google and existing investors like Mithril Partners. According to Google, Glance is a great example of innovation solving for mobile-first & mobile-only consumption, and providing content across many Indian languages. Google funding for startups like Glance, has helped them evolve and grow their audience.

    FAQs

    What is Google Venture (GV)?

    Google Ventures is a venture capital investment firm of Alphabet, the parent company of Google.

    Who is the CEO of GV (formerly Google Ventures)?

    David Krane is the CEO of GV.

    How many companies have Google Ventures funded?

    Google Ventures has funded more than 500 companies. Some of them are:

    • Slack
    • Uber
    • Medium
    • StockX
    • Stripe
    • GitLab
    • DocuSign
    • Magenta Therapeutics
    • Dailyhunt
    • Glance

    What are the sectors Google Ventures invest in?

    Google Ventures invests across all stages of startups and varied sectors. The major industries in which Google Ventures invests are:

    • Enterprise
    • Life sciences
    • HealthCare
    • Consumer
    • Frontier technology.

    How do startups get funded?

    Startups use various methods for funding:

    • Small Business Loans
    • Trade Equity or Services
    • Incubator or Accelerator
    • Crowdfunding.

    Who owns Google now?

    The parent organization of Google is Alphabet Inc.

    What do startups use the funding for?

    Startups raise funds for various reasons, mainly for the growth and expansion of their business.

    Who are the founders of Google?

    Larry Page and Sergey Brin are the founders of Google.

    What is the valuation of Google?

    Google has a valuation of $1.5 trillion.

  • How to Calculate Valuation of Your Startup?

    In the competitive entrepreneurship world today, entrepreneurs are quite excited about adding value to their startups. It is one of the most essential things to do for founders as it helps in further equity and funding decisions. Quantifying the worth of a startup is the most complex task to do. There are several methodologies and approaches to determine the valuation of your startup. The worth of a startup depends on several factors:

    • The business idea of the Startup
    • Stage of the startup
    • Product Prototype
    • Market risks and competition
    • Technical Adaptability
    • Customer traction
    • Investors

    Let’s know about the approaches used by startup founders and entrepreneurs on how to calculate the valuation of your startup.

    Mehul Sharma – Founder & CEO, Signum Hotels & Resorts

    Mehul Sharma - Founder & CEO, Signum Hotels & Resorts
    Mehul Sharma – Founder & CEO, Signum Hotels & Resorts

    Pre-revenue start-up valuation may be a complicated endeavour. There are many factors to take into consideration, from the control group and marketplace traits to the call for the product and the advertising dangers involved. And a hard truth associated is that even after comparing everything, despite the only pre-revenue valuation formula, the first level you may get continues to be simply an ESTIMATE!

    The world of the start-up is a place full of enthusiasts. A start-up is initiated every 3 seconds around the world! Every big company you can think of started from a garage with a computer bought with savings money or some sort of gift. But not all start-ups share the same start.

    Business proprietors will wish for an excessive valuation, while pre-revenue investors might opt for a lower price that guarantees a larger go back on investment (ROI).

    So, how does pre-revenue start-up valuation evaluate with a mature commercial enterprise valuation?

    Unlike early-stage start-ups, a mature publicly-indexed commercial enterprise will have extra information and figures to head on. Regular circulation of sales and monetary statistics make it less difficult to calculate the price of the commercial enterprise. More often than not, early-stage startups are valued somewhere within the middle, which means founders don’t get quite the amount they anticipated, and investors pay higher than what they intended to invest.

    For most start-ups especially pre-revenue, Traction is one of the significant indicators for assessing the worth. The true story of a start-up can be brought into the daylight by taking a look at its effectiveness in the market, the number of users, and its growth rate.

    Estimating the actual worth of an unlisted startup before the seed funding is actually of equal importance to having a business idea while going in.

    There are various ways to estimate the current worth of a business, but only a few are used as a daily pill by entrepreneurs.

    The most basic method to assess the value is by analyzing the previous year’s Balance sheet. Under this method, the total debt and liabilities are subtracted from the aggregate value of assets owned by the business. This method is less complicated, easy to assess, and comes in handy.

    Although, the Balance sheet method does not provide the whole picture of the situation. The problem here is that this methodology considers the start-up in its current state and not how it’ll be in the future. Investors are inquisitive about the latter, and so, as an asset-based valuation doesn’t take that into account, this method has its drawbacks.

    Another method of assessing the valuation of a business is by calculating the EPS (Earnings Per Share). EPS is calculated by subtracting the Preferred dividends from the Net income and further dividing it by the average of outstanding common shares. For an individual investor, EPS shows the exact value of revenues and makes more sense.

    The valuation of a start-up is a complex task and there is no straight jacket solution or method to be put into use each time. Often, the valuation is calculated using a combination of ratios, and ordinal values.

    The angel capitalist Dave Berkus believes investors ought to be ready to envision the corporate breaking of $20M in 5 years. His technique assesses five important aspects of a start-up, namely, Concept, Prototype, Quality Management, Connections, and Launch plan. The Berkus technique is an easy estimation, typically used for IT start-ups. It is a good way to gauge value, however, because the market into account isn’t taken into account, it’s not going to provide the scope that some folks desire.

    Furthermore, a few more methods like EDITBA (Earnings before interest, taxes, depreciation, and amortization), top-line method, and GMV (Gross Merchandise Value) have been proven to provide significance for the estimations.

    EDITBA is another easy-to-use method that provides ordinal values by using the previous financial statements. Varied business segments face varied rates of tax payment based on the industry they fall into.  A business with a higher revenue may have an NPV (Net Present Value) lower than the one with lesser revenues due to the different industries they fall into.

    Another interesting method for assessing the value is the Top Line method, which is a reference to gross figures reported by a company, such as sales or revenue. This method gets the name because these are shown at the top of a company’s income statement and are kept aside for the reporting of revenue and or gross sales.

    GMV method ascertains the gross value of sales in the market. Under this, the gross value of the merchandise is calculated as the Sales price of goods with the number of goods sold. It shall be noticed that GMV is calculated in conjunction with net sales, which takes deductions into account.

    The first-time valuation of a start-up is bound to foresee at least a few mistakes. Hence, while evaluating the value of your start-up two big pitfalls one shall avoid are:

    1. Never assume a valuation is Permanent, i.e., after all, a startup is going to be valued at what investors are willing to speculate in it. Ultimately, it shall be kept in mind that the variables are at play, and perceive that no valuation, high or low, is ever permanent- or maybe even correct with certainty.

    2. A Valuation is never straightforward, i.e., even after getting a pre-revenue start-up valuation you’re happy with, it’s best to debate things in nice detail with potential investors simply to ascertain that everyone is on the same page regarding the way to proceed.

    It is rightly said that only a fool would make peace with the first valuation he gets of his business as there are complexities and human factors involved.

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    Vicky Jain – Founder, uKnowva

    Vicky Jain - Founder, uKnowva
    Vicky Jain – Founder, uKnowva

    Startup valuation is not an exact science. Factors can include the industry, the present market, the team’s credentials, and other forces that might be taken into account. The valuation of a start-up is the measure of how much investors think the company is worth right now. One of the simplest ways to measure the value of a startup is with the scorecard method. By weighing up parameters of success like team experience, competition, the strength of the product, etc.) subjectively, this method enables comparisons between a startup and other “average” startups within the industry and area. If the startup looks to have more than average qualities as per the calculations, then the chances of getting a higher valuation increases and so does the investment opportunity. There is another method known as the discounted cash flow method that approximates how much flow of cash a startup will produce over a long period of the term. By predicting this and calculating the expected return on the rate of investment, assumptions can be made about a start-up’s value.

    Sharan Goyal – Founder and Director, Crozzo

    Sharan Goyal - Founder and Director, Crozzo
    Sharan Goyal – Founder and Director, Crozzo

    Valuation in today’s day and age has taken a very sinister meaning. Valuations are through the roof, with no stopping in sight. I prefer to find a reasonable multiple of EBITDA or revenue (in the case of a cash flow negative company) and compare that to that of an existing business which has raised funds at a particular multiple. For example, a D2C business in the food space with a solid distribution network is often valued at 15-20 times forward revenue. It would be fair to assume that a company with a similar profile can be valued at a similar multiple.

  • List of Startups funded by Nexus Venture Partners

    The startup ecosystem has grown over the past few years because many venture capital firms are investing in the early stages of upcoming startups. One such homegrown early-stage investing firm is Nexus Venture Partners, which was founded by successful entrepreneurs Suvir Sujan, Sandeep Singhal and Naren Gupta in 2006.

    The firm has its main headquarters in Menlo Park, California with head offices in Bengaluru and Mumbai in India. It is a pioneer of investing in global technology products and technology-led business for India. Nexus focuses on funding startups in the industries such as Enterprise Technology, Consumer Internet, Healthcare, Consumer, Business Services, Media, Software, Big Data Analytics, Data Security, Fintech, DevOps, Open Source, Education, Commerce, Gaming, Cloud, SaaS, Agribusiness, Rural Sector, Energy, Etc.

    Nexus is an early partner firm and believes in being the first institutional investment in the seed or the series A rounds. The firm also has long term commitment and work closely with the startups they invest in. Nexus Venture Partners has over $1.5 billion in AUM, after partnering with many entrepreneurs from both America and India.

    So far the firm is known to have invested in 294 companies and has over 65 exits. According to Venture Intelligence, Nexus has earned more than $500 million in exits by 2020. Nexus’s core identity has been its success in software deal-making, unlike other Venture Capital firms that only choose to fund successful consumer’s internet unicorns.

    The firm also prefers to invest in companies from India or global markets and may also invest in companies located outside India with a focus on American based companies with technologies that are relevant for India and its emerging markets.

    Snapdeal
    Shopclues
    Delhivery
    Unacademy
    Olx
    Zolostays
    Pratilipi
    Rapido
    Yolobus
    Druva
    Postman
    Frequently Asked Questions

    Here are some of the startups funded by Nexus Venture Partners

    Snapdeal

    Snapdeal Logo | Nexus Venture funded startups
    Snapdeal Logo | Nexus Venture funded startups

    Snapdeal is a well-known e-commerce company in India, which was founded by Kunal Bahl and Rohit Bansal in 2010. The company has its headquarters based in New Delhi and has recently grown to become one of the largest online marketplace in the country.

    Snapdeal is different from other e-commerce sites because its sellers offer good quality merchandise, customers get to pay value for money which is similar to local markets in metro cities. The website has over 500,000 sellers that sell fashion and home products to customers from 3,700 towns and cities across India.

    The company raised over $12 million in its first funding from Nexus Venture Partners and Indo–US Partners in 2011. Three years later, Snapdeal raised $133 million from eBay, Kalaari Capital, Nexus Capital Partners, Bessemers Venture Partners, Intel Capital and Saama Capital in 2014. The last investment made by Nexus Venture Partner to Snapdeal was in 2017 where the company raised funds Rs 113 crore from the firm.

    ShopClues

    Shopclues Logo| Nexus Venture funded startups
    Shopclues Logo | Nexus Venture funded startups

    ShopClues is one of the top online marketplaces in India, that was founded in 2011 by Sanjay Sethi, Sandeep Aggarwal and Radhika Aggarwal. The company has its headquarters in Gurgaon and its parent company is Clues Network Pvt Ltd. ShopClues was said to be valued at $1.1 billion in 2015 as it was backed by top investors like Tiger Global, Helion Ventures and Nexus Venture Partners, among others.

    In 2019, Qoo10 a Singapore based company acquired Shopclues for 470 million. Shopclues is the country’s first online Managed Marketplace that connects buyers & sellers online while offering a trusted and safe online shopping environment to customers in over 9000 cities across India.

    The company secured over $10 million in their Series B round of funding from Helion Venture Partners, Nexus Partners and Netprice.com in 2013. According to the company, the funds were used to scale their business, increase the website’s product catalogue and expand their reach to their target audience.

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    Delhivery

    Delhivery Logo | Nexus Venture funded startups
    Delhivery Logo | Nexus Venture funded startups

    Delhivery is the leading supply chain services chain company in India that was founded by Sahil Barua in 2011 and has its headquarters in Gurgaon. The aim of the company is to become the operating system for commerce in India, with the help of advanced infrastructure, logistics operations and cutting-edge technology.

    Delhivery so far claims to have delivered over 500 million shipments, in 230 cities across the country. The company aims to provide products and services in order to help improve the lives of consumers, small businesses, enterprises.

    They provide services such as transportation, warehousing, freight, reverse logistics, cross-border and technology services and has over 500,000 sellers and over 10,000 customers. The company raised over $5 million in its series B funding from Nexus Venture Partners in 2013. These funds were said to have been used to further expand its customer base.

    Unacademy

    Unacademy Logo | Nexus Venture funded startups
    Unacademy Logo | Nexus Venture funded startups

    Unacademy is one of the top EdTech companies in India that was founded in 2015 by Gaurav Munjal, Roman Saini, and Hemesh Singh. The company has its headquarters based in Bengaluru, Karnataka, and started out as a YouTube channel from 2010 to 2015.

    Currently, Unacademy claims to have over 18,000 educators that offer free and subscription-based live classes along with preparation materials for professional and educational entrance exams.

    As of 2020, the EdTech startup was valued at $2 billion. Unacademy raised over $4.5 million in their Series A funding from Nexus Venture Partners and Blume Ventures, Girish Mathrubootham, (the CEO of Freshdesk), and Ananth Narayanan (the CEO of Myntra) in 2017.

    The company used these funds to strengthen its base of educators from 200 to 2000. Unacademy again secured over $50 million in their Series D funding round from existing Venture capital firms like Steadview Capital, Sequoia India, Nexus Venture Partners and Blume Ventures.

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    Olx

    Olx Logo | Nexus Venture funded startups
    Olx Logo | Nexus Venture funded startups

    Olx short for Online Exchange is a popular Dutch online marketplace that was founded in 2006. The company is owned by Naspers (South African media group), has its headquarters in Amsterdam and operates in over 45 countries.

    Olx allows its users to buy and sell from a wide range of products and services such as electronics, fashion items, furniture, household goods, and vehicles like cars & bikes. In India, Olx has launched special services like Olx Autos (in 2020) and Olx Cashmycar (2018).

    Olx is not only popular in India, but also has a strong foothold in countries like Spain, Portugal, Mexico, South America, China, and the Philippines. Olx secured over $5 million in its initial stages of funding from Nexus Venture Capital in 2009.

    Zolostays

    Zolostays Logo | Nexus Venture funded startups
    Zolostays Logo | Nexus Venture funded startups

    Zolostays is a Bengaluru based company that provides services for co-living and accommodation options especially to students and young professionals. The company was founded by Snehas Choudary, Dr Nikhil Sikri and Akhil Sikri in 2015 and is available in more than 10 cities across India.

    Zolostays provides many budget-friendly unique services like good quality food, carefully curated living space, dedicated support team, free maintenance and zo-tribe events. Currently, the company claims to accommodate 40,000 Zolo properties and is aiming at reaching 200,000 beds by December 2022.

    Zolostays has raised $56 million in its Series C funding from Investcorp, Nexus Venture Partners, Mirae Assets and Trifecta Capital in 2020. It had also earlier raised $40 million from Nexus Venture Partners, Olympia Developers, Patni Computers Family Office and Mirae Asset. The company will be using these funds to strengthen its technology and AI-driven operating platforms.

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    Pratilipi

    Pratilipi Logo | Nexus Venture funded startups
    Pratilipi Logo | Nexus Venture funded startups

    Pratilipi is a self-publishing e-platform that offers content in ten different Indian languages which are Hindi, Gujarati, Bengali, Marathi, Tamil, Kannada, Telugu, English, Urdu, Punjabi and Odia. Pratilipi was founded by Ranjeet Pratap Singh, Prashant Gupta, Rahul Ranjan, Sahradayi Modi and Sankaranarayanan Devarajan in order to promote Indian languages.

    The company was launched in 2014 with its headquarters based in Bengaluru, Karnataka. The platform currently claims to have over 2 crore users and allows its users to publish or read their original works such as stories, poetry, essays and articles. Pratilipi secured over $1 million seed funding from Nexus Venture Partners in 2016.

    In 2020, the platform went on to raise Rs 76 crore in their Series C funding round led by Tencent with participation from Omidyar Network, Bennett Coleman, Shunwei Capital and Nexus Venture Partners.

    Rapido

    Rapido Logo | Nexus Venture funded startups
    Rapido Logo | Nexus Venture funded startups

    Rapido is a well-known online bike taxi and logistics service providing a platform in India that was founded by Aravind Sanka, Pavan Guntupalli, and SR Rishikesh in 2015. The company has its headquarters in Bengaluru, Karnataka and currently operates in over 100 cities across India.

    In 2018, the company had over 15,000 registered riders and more than an average of 30,000 rides per day. By 2019, Rapido has 1 crore registered users and had also created over 500,000 jobs in India. Rapido has over 15 million customers and 25 million app downloads, as of 2021. Recently, the company has also launched on-demand auto-rickshaw hailing services in 14 cities across the country.

    Rapido raised over $11.2 million in its Series A round of funding from Nexus Venture Partners in 2019. In its Series C round of funding, Rapido raised $43 million from Westbridge Capital, Nexus Venture Partner, Pawan Munjal Family Trust, Everblue Bangladesh LLC, Motherson Lease Solutions, Everblue Bangladesh LLC, Motherson Lease Solutions, Konark Trust, MMPL Trust in 2021.

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    Yolobus

    Yolobus Logo | Nexus Venture funded startups
    Yolobus Logo | Nexus Venture funded startups

    Yolobus is an intercity bus aggregator that has its headquarters in Gurgaon, Haryana and was founded in 2019. The company provides its users with world-class bus facilities that cover over 250 routes across India.

    All their busses have facilities Wi-Fi, CCTV Cameras, and GPS tracking, their customers can also choose from options such as a fleet of sleeper, luxurious sleeper buses, and AC/Non AC buses, built-in washrooms, etc.

    In 2020, Yolobus raised $3.3 million in their Series A funding round from Nexus Venture Partners and India Quotient. The company will use these funds to ramp up their services, technology, customer, crew safety and sanitization. It will also enhance safety measures as in the times of Covid 19, people are wary of travelling intercity.

    Druva

    Druva Logo | Nexus Venture funded startups
    Druva Logo | Nexus Venture funded startups

    Druva is a cloud backup and data protection based firm that has its headquarters in Sunnyvale, California with offices in Greenwich, New York, Hong Kong, London, San Francisco and Mumbai. The company was started in 2008 by Jaspreet Singh, Milind Borate, and Ramani Kothandaraman in Pune, India.

    Druva is a leader in providing services like SaaS-based data protection and management products to both companies and government agencies. The company aggregates the data of the enterprise data from endpoints, data centers, and cloud workloads for backing it up or restoring, compliance monitoring, security, and other uses, etc.

    So far the company has over 750 customers and is known to protect over 300,000 endpoints worldwide. Druva secured $130 million from Sequoia Capital India and Nexus Venture Partners in 2019. Druva is a pioneer as it has created an industry-first application known as InSync that instantaneous automates backups for laptops.

    Postman

    Postman Logo | Nexus Venture funded startups
    Postman Logo | Nexus Venture funded startups

    Postman is a popular collaboration platform for API Development that was founded by Abhinav Astana, Ankit Sobti and Abhijit Kane in 2014. The company has its headquarters based in San Francisco, California and claims to be used by over 13 million developers and 500,000 organizations worldwide.

    The platform helps in simplifying every aspect of building an API and streamline collaboration so the users can create better APIs. Postman raised $150 million in their Series C round of funding from Global venture capital, Insight Partners, CRV and Nexus Venture Partners in 2018.

    The company had also been funded by the Nexus Venture Partner in two other rounds first was $1 million in 2015 and $7 million (Series A round funding) in 2016.

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    Conclusion

    Nexus Venture Partners is one of the leading early-stage investment firms that has helped many Indian startups to grow into unicorns today. The firm has been the most successful in funding software companies, rather than consumer internet unicorns that other venture capital firms prefer investing in.

    Over the years, Nexus Venture Partners has earned nearly $500 million exits. Despite being termed as a software investor, the firm is currently investing in a wide variety of industries.

    Frequently Asked Questions

    What is Nexus Venture Partners?

    Nexus Venture Partners is one of the first homegrown Venture capital firms and is a pioneer of investing in global technology products and technology-led business for India.

    Who is the founder of Nexus Venture Partners?

    Nexus Venture Partners was founded by Suvir Sujan, Sandeep Singhal and Naren Gupta in 2006.

    What are the industries in which Nexus Venture Partners fund?

    The industries in which Nexus Venture Partners fund are Enterprise Technology, Consumer Internet, Healthcare, Consumer, Business Services, Media, Software, Big Data Analytics, Data Security, Fintech, DevOps, Open Source, Education, Commerce, Gaming, Cloud, Saas, Agribusiness, Rural Sector, Energy, etc.

    What are startups funded by Nexus Venture Partner?

    The startups funded by Nexus Venture partners are Postman, Druva, Yolobus, Rapido, Pratilipi, Zolostays, Unacademy, Olx, Delhivery, Shopclues, and Snapdeal among others.

  • Azah: Promoting Feminine Hygiene

    Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Azah.

    Feminine hygiene and its awareness have never been given its due importance in India It is only recently that people have become cognizant of it. Still, there are many women who compromise on their health by using below-par products for menstrual hygiene.

    While awareness about feminine hygiene is seeing an uptick, the existing products available on the market, especially sanitary pads, aren’t up to the mark. The optimal ones do their work but are often out of reach of the lower classes due to their costs. To tackle this issue, two individuals from Gurgaon launched a venture named ‘Azah‘ in 2018.

    Azah was founded with the aim to innovate, improve, and deliver high-quality products that solve menstruation-related hygiene issues faced by the Indian female population. Azah sanitary pads are the most well known product of the company as it is ultra-soft organic sanitary napkins known to be safe and comfortable, according to Azah sanitary pads reviews.

    StartupTalky interviewed Azah founder Mr. Aqib Mohammad to learn more about the company.

    Azah in A Nutshell

    StartupName Azah
    Headquarters Gurugram
    Founders Shashwat Diesh and Aqib Mohammad
    Sector Feminine Hygiene
    Founded 2018

    Azah – Latest News
    Azah – About
    Azah – Industry Details
    Azah – Founders
    Azah – The Idea
    Azah – Name And Logo
    Azah – Funding
    Azah – User Acquisition
    Azah – Major Challenges
    Azah – Competitors
    Azah – Advisors And Mentors
    Azah – Work Culture
    Azah – Achievements
    Azah – Future Plans
    Azah – Founders Advice
    FAQ

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    Azah – Latest News

    20th December 2019 – Female wellness startup, Azah Raised funding from Snapdeal founders Kunal Bahl & Rohit Bansal

    Gurugram based female Wellness Startup, Azah.in, announced that the company has raised an undisclosed amount in Pre- Series A funding round from Snapdeal founders Kunal Bahl and Rohit Bansal, Angel List India and a few other HNIs. According to a press release made by Azah on 20th December 2019, the lead funding came via Titan Capital, a VC arm run by Kunal & Rohit.

    The startup plans to use procured funds to enhance its production, launch new products and expand sales operations in tier 2 and tier 3 cities. As said by Azah sanitary pads owner Aqib Mohammed, a good portion Azah funding will go into the research and development of new products and carrying out further innovation in the company’s current product line. The company is also planning to expand its reach to newer demographics while exploring alternative channels to drive growth and acquisition

    6th March 2020 – Female Wellness Brand Azah launches #RashFreePeriod Campaign on International Women’s Day

    On the occasion of International Women’s Day 2020, Azah, India’s fast-growing female wellness brand, has launched a month-long #RashFreePeriod campaign. The campaign aims to encourage healthier menstrual practices and help women better protect themselves from rashes and irritation.

    The campaign to be run by Azah, invites women from all across India to buy Azah sanitary pads and use them while promising its customers a 100% refund should they get any rashes during their period.  

    According to a survey done by Azah among urban Indian women, around 50% of the women reported facing rashes and irritation during their period. The #RashFreePeriod campaign aims to educate women that these problems need not be an unavoidable reality of their lives and can be easily be prevented by using chemical-free products and following basic hygiene practices. Which is why the Azah rash-free organic sanitary pads became popular in the market.

    Shashwat Diesh and Aqib Mohammed, Azah pads owner said that, “As men, we were ourselves oblivious to the problems faced by women during their period. It was only when we saw our sisters’ lives get severely impacted because of rashes, did we realize that there is still a lot that needs to be done with respect to this category. #RashFreePeriod Campaign is our effort to help tackle this problem and make comfortable, rash-free periods a much more accessible reality for women. It is an Azah promise.”

    “During the course of our journey, we realized that a lot of women have accepted rashes as an unavoidable part of their lives. Our aim is to educate as many women as possible that rash-free periods are completely possible and women need not suffer from rashes every month throughout their menstrual lives. A testament to this is the fact that more than 97% of our customers who used to face the problem of rashes with standard pads no longer face the problem after switching to Azah. This insight is based on an internal research study that was conducted with more than 3000 Azah customers.”, added the duo.

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    Azah – About

    Azah.in currently manufactures ultra-soft organic sanitary pads that are available in 3 packages –  a box of 12, a box of 15, and a box of 30 pads. Azah pads are made to ensure premium quality at every stage of the production process. The price of Azah sanitary pads is Rs 239 for the pack of 12 pads, Rs 289 for the pack of 15 pads, and Rs 519 for the pack of 30 pads. Azah sanitary napkin scan be purchased online from the company’s website as well as from other major e-commerce portals.

    The USP of Azah rash-free organic sanitary pads are:

    • Convenient: The pads are available in 2 sizes. Both can absorb the light, medium and heavy flow.
    • Ultra-soft: The top layer of the pad is made with the finest organic cotton. This ensures a smooth velvety surface to prevent irritation and rashes.
    • Chemical-free: According to azah sanitary pads review, they don’t have harmful chemicals such as chlorine, dioxins, and artificial fragrances.
    • Super absorbent: can absorb up to 1000 times its weight in water.
    • Eco-friendly: All the layers except the bottom-most are made of either cotton or paper. Each pad comes in a sealed biodegradable disposal bag.
    • FDA approved: Azah is also amongst those Indian organizations that have been approved by the United States FDA, one of the most reputed quality certification bodies in the world known for its exacting standards.
    • Free of harmful plastic and synthetics.
    Azah Pads
    Azah Pads 

    Azah – Industry Details

    The Indian feminine hygiene industry is growing rapidly with women becoming more educated, financially independent, and aware of personal hygiene. Which is why companies like Azah are launching fem care line installation company in India.

    The revenue in the feminine hygiene segment has been US$105 Mn in 2019. The market is expected to grow annually by 6.7% (CAGR 2019-2021).

    Azah – Founders

    The Azah founders are Aqib Mohammad and Shashwat Diesh, and the platform was launched in November 2018. Shashwat and Aqib met while they were working with Snapdeal and came together to start Azah.

    Aqib Mohammad graduated from IIT Roorkee in 2015. He worked with Snapdeal and co-founded Edtech startup Xolvr.com that got acquired in October 2016.

    Shashwat Diesh graduated from R.V College of Engineering in 2012. He worked with Ola and Snapdeal before Azah. He also founded an FMCG brand ‘Flossy’ in 2017 which he exited in February 2018 to focus on ‘Azah’.

    The Azah team has 9 members at the moment.

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    Azah – The Idea

    Menstruation and openness are rarely mentioned in the same breath because of the social stigma around them. Therefore, it is was a courageous act for Aqib and Shashwat to start a company based on manufacturing sanitary pads.

    It began with a casual conversation. Sometime around May 2018, Shashwat was having a general talk with one of his sisters. She casually mentioned the problem of rashes and itchiness due to the conventional sanitary pads in the market.

    Sashwat was moved by his sister’s ordeal decided to take corrective measures. He spoke about the same with his friend Aqib and the duo began researching sanitary pads. They did a survey at the end of May 2018 and got a response from 285 women attesting to the fact that 1 in 2 women face rashes and itchiness from menstrual pads. They inquired further about feminine hygiene from gynaecologists and experts.

    On the 1st of June 2018, Aqib and Sashwat left their respective professional commitments and to work full time on Azah. On 28th October 2018, Azah.in officially launched its products in the market.

    “Without support from family and friends it would have been very tough to start up a company to produce sanitary pads considering the taboo associated with it”, says Aqib, the Azah founder.

    Azah logo and the name is a Hebrew name meaning strong and bright. The brand name is inspired by the immense strength a woman carries within herself and consequently as a brand, it aims to lend the same qualities to its product line.

    Azah Logo
    Azah Logo

    Azah – Funding

    When it comes to Azah funding, the company has raised USD 200,000 in seed-round funding from a group of angel investors in April 2019.

    Date Stage Amount Investor
    April 2019 Seed $200,000 Angel Investors

    Azah funding is said to be used for the expansion of its inventory and operations across India. Azah.in plans to use a part of the fund to optimize its supply chain management and improve customer service by leveraging technology.

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    Azah – User Acquisition

    It’s extremely hard to develop and design a product that you yourself can’t use – Aquib (Azah Founder)

    While the company got its first set of customers through friends and family, the biggest factor that helped the company scale to 5,000 customers in a matter of 90 days was through positive word of mouth publicity. The company also runs social media campaigns to promote its products.

    Azah – Major Challenges

    According to founder Aqib Mohammad, brand stickiness is unusually high in this industry. There is very little consumer awareness and women resort to whatever brand they were introduced to in the beginning by their mother or sister. It has always been a challenge for an upcoming brand to convince customers to switch brands, especially when they’ve been using a specific one for as long as a decade.

    Azah – Competitors

    The company faces tough competition from international market leaders like P&G and Johnson & Johnson. The company has been still been successful in carving its niche in the market and earn the trust of consumers.  The other Azah Competitors are Peebuddy, Carmesi, Nua, Heyday Care, GlamEgo, Bharti Sales, My Urifiemme, GoGirl, among others.

    When it comes to azah pads vs nua pads, Azah Sanitary pads is better because is free of harmful synthetics such as chlorine, dioxins, and artificial fragrances, and is FDA-approved. Besides that, it also helps to prevent rashes and itchiness. Whereas Nua on the other hand, is super light, chemical-free and has great absorption, but is more expensive.

    Azah pads vs Nua pads

    Azah – Advisors And Mentors

    Azah is moving forward under the expert guidance of Mr. Mehmood Khan who served in the Global leader innovation process at Unilever from 1990-2009.

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    Azah – Work Culture

    We are friends first then colleagues – said Aqib Mohammad.

    Every member of the Azah team is motivated by the positive impact fostered through the work done at Azah. This enables the team to go above and beyond in making ever-lasting contributions.

    Azah – Achievements

    The Azah sanitary pads review are usually positive from all customers across various e-commerce platforms. It sold more than 200,000 pads within 5 months of launch. The Azah pads review also helped the company to successfully served customers in over 1800 pin codes across India with the average delivery time being only 2.5 days.

    Azah’s average monthly revenue is growing at 50%. The company’s revenue crossed INR 10 lakhs in March 2019. Azah.in claims to have a retention rate of 90% and has a net promoter score (NPS) of +6.

    Azah – Future Plans

    Azah plans to become a one-stop solution for all premium feminine hygiene products. Azah.in is expecting a ten-fold growth in order volumes by 2020. The company envisions expanding globally over time since the Azah sanitary pads review are positive and the demand for Azah sanitary pads has increased over the years.

    Azah – Founders Advice

    Don’t be afraid of taking risks. More importantly don’t be afraid of failure – Aqib, (Azah pads owner).

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    FAQ

    Who’s the Azah sanitary pads owner?

    The owner of Azah is Shashwat Diesh and Aqib Mohammad.

    Azah pads made in which country?

    China

    Are AZAH pads biodegradable?

    Yes

    Is Azah an Indian brand?

    Yes, Azah is an Indian brand.

    Are Azah pads safe?

    Azah is known for Azah rash-free organic sanitary pads which are extremely safe.

    Is Azah eco friendly?

    Azah is eco-friendly and non-toxic as it is made of organic materials.

    Who are the Azah competitors?

    The Azah competitors are Peebuddy, Carmesi, Nua, Heyday Care, GlamEgo, Bharti Sales, My Urifiemme, GoGirl, P&G and Johnson & Johnson.

  • How to Raise Seed Funding for your Startup? (8 Ways)

    India’s startup ecosystem is booming with innovations and passion that has made the country to be the third largest when it comes to market size. Inevitably, it has attracted a lot of investors to the industry as the returns and the revenue will be humongous if the startup becomes successful. However, starting a business and expanding it is a humongous task.

    The amount of uncertainty and risks involved makes it difficult to get funding for a business. The first thing that you need before starting a business is seed funding. It is the total sum of money that you need to cover the expenses related to expansion, product development, market research et cetera.

    Amongst the different stages of funding that every startup has to go through seed funding can be considered as the initial stage. The major intention of the very idea of seed funding is to obtain enough working capital so as to start the business grinding. There is absolutely no doubt that seed funding is the default process of any business.

    How to Raise Seed Funding for your Startup?
    FAQ

    How to Raise Seed Funding for your Startup?

    The right kind of pitching to the right person or company at the right time is the popular and yet the secret ingredient behind finding an investor to fund your startup. You might not get your pitch approved on the first try. However, always remember that every interaction with a prospective investor is an opportunity to improve yourself. Here are a few places where you can approach to get seed funding for your startup.

    Startup India Seed Fund Scheme (SISFS)

    Startup India Seed Fund Scheme is an initiative by the government of India that aims at improving entrepreneurship across India. By recognising the need for capital at the nascent stages of an enterprise they provide financial assistance to startups.

    It covers areas like content development, prototype development, product trials, market entry and commercialisation.

    This scheme ensures that they facilitate the entrepreneurs to shape their startups in such a way that they will be capable of raising investments themselves from venture capitalists, angel investors or through loans.

    This initiative by the government of India is under the Department for Promotion of Industry and Internal Trade or DPII. Their call for applications is open throughout the year.

    NIDHI-Seed Support System (NIDHI-SSS)

    The National Initiative for Developing and Harnessing Innovations – Seed Support System or NIDHI – SSS of the Department of Science and Technology hosts seed funding with a corpus of 10 crores under the Entrepreneurship Development Centre.

    They provide financial assistance to those startups that have with them; promising ideas and technologies. This Seed Support System is considered to be a bridge for the startup between its development and commercialisation.

    The financial assistance includes product development, testing, test marketing, mentoring, professional consultancy, IPR (Intellectual property rights) issues et cetera. The selected startups are incubated at the venture center and must have completed three months of residency at the place during the time of seed fund investment.

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    Idea2PoC

    Idea2PoC is the scheme of startup policy of the government of Karnataka. Under this scheme, startups receive early-stage funding for their ideas and concepts that are yet to be released.

    With the objective of encouraging innovators to commercialise their inventions, the scheme gives grant in aid up to 50 lakhs rupees. The fund is released as per their requirements and milestones of the project that are agreed upon in the memorandum of agreement that is signed between the respective startups and the Karnataka Biotechnology and Information Technology Services (KBITS)

    Seedfund

    Realising the need for a reliable help center to facilitate seed funding for the budding startups. Seedfund was established in the year 2006 by Bharati Jacob, Mahesh Murthy and Pravin Gandhi.

    After being joined by Paula Mariwala and Sanjay Anand Ram, they have revolutionised the investment experience for a plethora of startups. They have seeded diverse startups belonging to different sectors across India. Red bus, Car Wale, Jeevanti and Valsalya etc are a few popular startups funded by them.

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    Khosla Ventures

    Khosla Ventures was founded in 2004 by Vinod Khosla and this firm provides venture assistance and strategic advice to those entrepreneurs who are working on breakthrough technologies.

    One thing that makes them stand out from the rest of the firms of their kind is its broad range of areas that covers, including consumer, enterprise, advertising, financial services, big data, agriculture, robotics, sustainable energy et cetera.

    For a person who has an amazing idea that has significant potential with a strong team then Khosla ventures will be an excellent option.

    Angel Investors

    You can find angel investors who are accredited investors with a high net worth and a passion for investment. Mostly these people will be working towards diversifying their portfolios through investments in startups.

    Apart from funding, their experience in the industry will also give a clear understanding to the entrepreneurs about the timelines required, the funding required and the mismatches in your nascent plans

    Friends and Family

    Apart from the government, investors and corporate firms, family and friends of the entrepreneur can also invest in the startup. It is one of the most common ways in which people obtain seed funding recently. The flexibility with the timeline of repayment is one of the most important factors that has popularised this form of seed funding.

    Crowdfunding

    Cloudfunding is another popular form of gaining capital for seed-stage startups. Today there are more than 500 websites that help entrepreneurs to raise crowdfunding for their startups.

    A website named Kickstarter is one of the most popular websites for people looking at the source of obtaining seed capital. According to various reports, this website raises billions of dollars through them for various startups.

    Conclusion

    Getting a clear idea of your business and seeing it materialise and expand is a dream come true for all entrepreneurs. Getting the seed capital is the foundation for all the dreams that they have built.

    One thing that is to be kept in mind before venturing into any of these options for procuring funds is to have a clear formal business plan. The entrepreneurs should have a very clear idea regarding the product, product development and project timeline.

    Another thing to be noted is that seed funding is only for the initial stages but for the years to come as well. An entrepreneur who makes strategic plans should be able to make use of the initial fund to be capable enough to raise for their investments on their own.

    FAQ

    How many rounds of funding can a startup take?

    A startup can receive as many rounds of funding as possible, there is no restriction on it.

    How to raise seed funding for Startups?

    Angel Investors, Family and Friends, Crowdfunding, Incubators, and Accelerators are some of the common ways to raise seed funding for your startup.

    Why do startups raise funding?

    Startups usually raise funding to expand an grow their startup.

  • Y Combinator’s Most Successful Startups | YC Startups

    Y Combinator is a startup accelerator unlike any other. Since its inception in 2005, Y Combinator has helped fund and grow over 2,000 startups through its YC Growth Program.

    Y Combinator, an American startup accelerator, just released their list of the top companies by valuation. The Y Combinator compiled this list to enable potential workers, partners, and late-stage investors learn more about the YC startups. Three Indian firms, Cleartax, Meesho, and Razorpay, have also made the list.

    Of course, valuation as a ranking criteria has flaws. It’s mostly a perception-based assessment, a forecast of a company’s potential rather than a clear representation of how much a firm is generating at any particular time. YC stated while releasing last year’s list that “valuation is a poor method to assess a company’s value in the short term.”

    However, it does give some fascinating information on which of YC’s 2,000+ investments have grown the most, which have held up the best over time, and which sectors perform the best. According to YC, all of the firms on this year’s list are valued at $150 million or more, with a total worth of $155 billion.

    Let’s take a look at the top 10 most successful businesses that have come out of Y Combinator and benefited from it.

    As of 2021, each of the 10 companies is worth more than $150 million.

    Stripe: Taking First Place
    Airbnb: Popularizing Homestays
    Cruise: It’s Cruising To Success
    DoorDash: A Dash To Triumph
    Coinbase: Using Crypto-currencies As A Means Of Payment
    Instacart: On-Time Delivery
    Dropbox: Cloud Storage As A Bet
    Ginkgo Bioworks: The Business Of Organisms
    Gusto: Providing Assistance To Small Businesses
    Flexport: Deciding To Rely On Paperwork
    Conclusion
    FAQs

    What is Y Combinator | Startup accelerator

    Stripe: Taking First Place

    Stripe is a 2009 startup started by Patrick Collison and John Collison in the United States. Stripe’s software allows companies and individuals to send and receive payments via the Internet.

    Stripe | Y combinator's Startup
    Stripe | Y combinator’s Startup

    Stripe was a member of Y Combinator’s Summer 2009 class and has a product-based business strategy. It is now valued at over $36 billion and employs over 2000 people as of April 2020.

    Airbnb: Popularizing Homestays

    Airbnb | Y combinator's Startup
    Airbnb | Y combinator’s Startup

    This business made headlines lately after opting for a direct listing rather than an IPO. Airbnb is an internet marketplace where people can book accommodation and homestays. The firm does not own any of the real estate listings; instead, it serves as a broker, earning commissions on each booking. They enable individuals all around the globe to become hospitality entrepreneurs by unlocking and monetizing their spaces, interests, and abilities. Airbnb offers 6 million rooms to stay in 100,000 locations, as well as 40,000 unique experiences hosted by locals.

    Cruise: It’s Cruising To Success

    Cruise is an American automaker that specialises on developing sophisticated, self-driving cars, motorcycles, and other electric vehicles. Kyle Vogt (Twitch Founder) and Dan Kan launched Cruise in 2013 and it was bought by General Motors in 2016.

    Cruise | Y combinator's Startup
    Cruise | Y combinator’s Startup

    Cruise was a part of the YC Growth Program’s 2014 Winter batch, raising $4.3 million in initial investment. As of late 2019, Cruise employs around 1400 people.

    DoorDash: A Dash To Triumph

    DoorDash | Y combinator's Startup
    DoorDash | Y combinator’s Startup

    DoorDash is an American meal delivery service that uses delivery workers to link businesses and customers. Tony Xu, Andy Fang, and Stanley Tang started DoorDash in 2013.

    DoorDash was a part of the Y Combinator Summer 2013 class and now employs over 1800 employees. As of mid-2019, DoorDash was valued at $12.6 billion.

    Coinbase: Using Crypto-currencies As A Means Of Payment

    In 2012, Brian Armstrong and Fred Ehrsam established Coinbase, a cryptocurrency exchange company. Coinbase is a digital currency exchange located in San Francisco, California. It is one of the most popular locations to trade, sell, and buy digital currencies such as Bitcoin.

    Coinbase | Y combinator's Startup
    Coinbase | Y combinator’s Startup

    Coinbase operates on a fee-based business strategy, charging customers a fee to utilize its platform. Coinbase was a part of Y Combinator’s 2012 Summer batch and now employs over 1000 employees. Coinbase raised approximately $600 million in investment through Y Combinator during its early phases of development and now has a market valuation of over $8 billion as of late-2018.

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    Instacart: On-Time Delivery

    Instacart is a grocery delivery and pickup service that is available in the United States and Canada. Apoorva Mehta launched Instacart in 2012. Instacart’s selling point is that it guarantees 1-hour delivery of goods bought on its website.

    Instacart | Y combinator's Startup
    Instacart | Y combinator’s Startup

    Instacart’s business strategy is built on the sharing economy, in which it functions as a platform that connects merchants and consumers to create a hyper-local on-demand grocery delivery service. Instacart was a part of the Y Combinator Summer 2012 class and now employs over 1100 people. It is now valued at over $7.5 billion and follows a combination of e-commerce and hyperlocal on-demand grocery delivery business strategy.

    Dropbox: Cloud Storage As A Bet

    Dropbox is a software business based in the United States that provides online file hosting services to its users. Dropbox was founded by Drew Houston and Arash Ferdowsi in 2008 and has since grown to become one of the most popular ways for individuals to share files over the internet.

    Dropbox | Y combinator's Startup
    Dropbox | Y combinator’s Startup

    Dropbox operates on a freemium business model, which means that the majority of its services are free, but additional capabilities can only be accessed by signing up for one of their premium plans. Dropbox was a part of the Summer 2007 Y Combinator cohort, and as of late-2018, it employed over 2,300 people and was valued at over $12 billion.

    Ginkgo Bioworks: The Business Of Organisms

    Ginkgo Bioworks is an American biotech firm formed in 2009 by Tom Knight and a group of MIT scientists, including Reshma Shetty, Austin Che, Barry Canton, and Jason Kelly. Ginkgo Bioworks now assists in the creation of bespoke creatures via the use of software and hardware automation.

    Ginkgo Bioworks | Y combinator's Startup
    Ginkgo Bioworks | Y combinator’s Startup

    Ginkgo Bioworks was a part of the Y Combinator Summer 2014 class and now employs about 270 people.

    Gusto: Providing Assistance To Small Businesses

    Gusto is a software business located in the United States that specialises in human resource management and cloud-based payroll. Josh Reeves, Eddie Kim, and Tomer London created Gusto in 2011.

    Gusto | Y combinator's Startup
    Gusto | Y combinator’s Startup

    Gusto was a member of the Y Combinator Winter 2012 class and now employs over 1,000 people.

    Flexport: Deciding To Rely On Paperwork

    Flexport is a freight forwarding firm that uses its comprehensive management software and solutions to make the logistics underlying the freight forwarding business more transparent and efficient. Ryan Peterson created Flexport in 2013 and it is situated in San Francisco, California.

    Flexport | Y combinator's Startup
    Flexport | Y combinator’s Startup

    Flexport has a SaaS business model, in which it uses software products and services to assist optimise goods transportation, brokerages, trade financing, and insurance. Flexport was a part of the Y Combinator Winter 2014 class and now employs over 1,700 people.

    How to Apply For Y Combinator

    Conclusion

    While the top ten companies have generally remained the same since 2018, a few have moved about a bit, while some have vanished altogether. Last year, Airbnb was No. 1 and Stripe was No. 2; this year, they’ve switched positions. Machine Zone, the developers of the once-popular mobile game– Game of War and the No. 7 business in 2018, is nowhere to be found, as is last year’s No. 9, Zenefits. This list isn’t thorough, according to YC, because they “allowed alumni to opt out of being included for any reason.”

    The majority of the firms on the list are at least four or five years old, which makes sense given that it’s rare for startups to achieve enormous, record-breaking values straight away. Of course, there are exceptions: Grin, a Latin American scooter rental business ranked No. 27 on this year’s list, only just completed YC in the summer of 2018. Atrium, a tech-focused startup law firm formed by Twitch co-founder Justin Kan, is ranked No. 83 in the Winter 2018 class. After starting just months ago, ZeroDown, a firm that seeks to help consumers buy houses without a down payment, squeaked onto the list at No. 101.

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    Meanwhile, the Summer 2016 class has more entries on the list than any other, accounting for 10% of the total. At number 13, Reddit, which was a part of YC’s Summer 2005 class, is the oldest business on the list.

    FAQs

    What is Y Combinator?

    Y Combinator is American startup accelerator which provides funding for startups to help it grow.

    What does Y Combinator do?

    Y Combinator provides funding for startups in the earliest stage of venture funding referred to as seed funding.

    What is YC Startup?

    The list of startups funded by Y combinators are referred to as YC Startups.

    How to  join Y Combinator?

    Startups can join Y Combinator by application to Y Combinator by just filling out an application form. They invite the most promising groups to meet make funding decisions afterward.

    How many Indian startups does YC have?

    There are 43 startups in the latest batch(W21) of YC startups.

  • SportsApp raises $140K in seed round; sets eyes on 60% Market Share in 5 years

    Noida based startup SportsApp raised $140K in seed round led by noted names like Shubhrendu Khoche, Anirban Basu, Sanjay Ahuja, Ram Ganesan and Kuldeep Puri, among others.

    This unique startup which primarily addresses the aspiring sportspersons of India uses a proprietary tech platform to solve the asymmetric access to “Community, Sponsorships, and Career.”

    In a statement, SportsApp shared it will be utilizing the funds to further enhance its go-to-market, technology and marketing capabilities. This round of funding should further catalyze the fast growth this startup has witnessed in key KPIs since its launch. Launched in Mar’18, SportsApp has seen growth of 20X in downloads, 56X in MAUs and 80X in DAUs. Interestingly, the startup clocked an impressive 4X scale up in revenues during the pandemic year of 2020-21 FY.

    “Lack of access to the essential resources such as information, sponsorships and professional support for budding athletes early on in their careers is costing India immensely in world sporting events. For an emerging world power like India, we indeed need to become a force to reckon with at the Olympics and other world events. Towards this mission, we need to start with equipping our young sportspersons with better access to resources”, said Shashank Mishra (founder- SportApp), who himself was once a budding cricketer but had to give up on his sporting dreams due to lack of resources. Today he is committed to removing the same barriers for young sportspersons and creating a much-needed disruption in the sports industry.

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    SportsApp is an aggregator platform combining Community, Content and Commerce together for India’s budding sportspersons. It uses tech to remove the sports industry’s asymmetry and carries the vision to ‘Empower Sports Stars Of Tomorrow’. Through SportsApp, budding sportspersons can access and leverage the entire sporting eco-system including physiotherapists, coaches, sponsors, nutritionists and other resources.

    SportsApp Founder and Team

    Interestingly, the Government of India has recently brought renewed focus on sports as an integral topic for the youth of the nation. The team sought the insights from Shashank on the future of this Digital Community for Sports Industry and what makes it so relevant in the current times –

    “Sporting ecosystem has 4 Ps that make it ripe for a tech-centric disruption— Patronage, Providence, Potential, and the Platform. Presently, there is a huge asymmetry of patronage from brands where 90%+ endorsements and sponsorship go to only top 5-6 stars, usually from the cricket. Indian Govt’s recent decision to bring ‘Sports’ into the curriculum from extra-curricular activities besides other initiatives such as ‘Khelo India’ is already helping build a solid and favorable ground.

    The emergence of sports as a sustainable career due to fan-friendly leagues is also playing a decisive part in improving the overall potential of the industry. Above all, there is a lack of relevant content on a dedicated platform making the sportspersons dependent on personal coaching. In short, there is a wide window of opportunity valuing a  whopping $900Mn that remains untapped – SportsApp fits perfectly in this segment to fill the gaps, by becoming the perfect aggregator for India’s sports ecosystem.”

    ‘Content’ is the biggest driver of their business that moves both ‘Community’ and ‘Commerce’ and enable learning. The key USP of the SportsApp lies in its algorithm that rates an individual player and throws up their rating/value. This value is then pitched to brands to sell sponsorship. The market ranking helps athletes realize their potential pretty early at the onset of their career, thus removing the probability of exploitation in the name of endorsements and sponsorship, which is quite rampant, otherwise.

    Shashank further adds: “Having tested the algorithm, the business model, the product-market fit, our initial success in getting both users and sponsorships is giving us the confidence to scale further. Some of our user athletes are already playing at India Juniors, or are winners at ‘Khelo India School (KIYG), KIUG, Commonwealth Games, Olympics and Indian National Teams. “

    SportsApp has set its eyes on capturing 60% of the market share in the coming 5 Years.

    SportsApp 

    The Community platform also provides regular updates on sports events of your sports, besides sending alerts on sports jobs available within the industry. Several veterans and existing sports personalities and coaches also form an integral part of SportsApp. You may join the community and follow your fellow/senior athletes, coaches, academies, and federations to stay updated with their latest feeds or directly reach out to them via an inbuilt messaging feature on the App for any support required.

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    To know more about this innovative venture and be part of it, you may visit their portal download the app directly from the Android Playstore or connect with their social media handles on Facebook, Instagram or LinkedIn.

  • The Startup India Seed Fund—How Will It Help Your Startup?

    Indian Prime Minister Mr. Narendra Modi has from the start of his tenure emphasized the growth of India with the “Made in India” plan. Under his leadership, the central and state governments have been actively incentives for Indian Businesses.

    He was addressing the Prarambh Startup India International summit and said in his address that the target for India’s startups over the next five years should be to become global giants in their respective service areas. And announced the launch of a new seed fund for startups for setting up and growing business subsequently.

    Read on to learn how it can impact your startup.

    When is a Business called a Startup?
    What is Startup India?
    What is Startup India Seed Fund?
    What will the Startup Seed India Fund do for Startups?
    What Advantages would Startups get with Startup Seed India Fund?
    FAQ’s
    Conclusion

    When is a Business called a Startup?

    A business would usually be called a startup when it has been set up, so a young company. It is a venture by the aspiring entrepreneur to create a unique product or provide a service. These usually operate on a tight budget and are funded either by the founder or with association with friends, family, or maybe personal borrowing.

    The very first challenge they face is validating their product or service. They have to convince the consumer that their product/service is worth believing and spending. And convince lenders and investors of the possibility of healthy returns.

    What is Startup India?

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    Startup India Benefits by Government

    Startup India was introduced in 2016 by the Central government with intention of creating a positive environment to encourage innovation and growth of new companies in the country. This would ensure the sustained growth of the nation and provide a continued source of employment.

    The government created the Startup India Action plan to:

    • Simplify establishing business and provide guidance
    • Provide funding schemes and other incentives
    • Be a common ground for industry and academia to work together

    Definition of a Startup under Startup India:

    • Establishment: The company’s date of incorporation should not exceed 10 years
    • Type of Company: The business should be registered as either Private Limited Company; a Registered or Limited Liability Partnership
    • Turnover: The annual turnover should not exceed 100 crores in any year since incorporation
    • Formation: The business should not have been formed by splitting the company
    • Potential: The should a potential to improve existing product or service and creation of wealth and employment in the process

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    What is Startup India Seed Fund?

    The Fund of Funds for Startups was set up in 2016 so that new companies could get assistance in raising equity capital through the Fourteenth and fifteenth Finance commission cycles. The size of this corpus was a huge 10,000 crores and it was mainly designed towards raising equity capital.

    With the announcement of the Startup India Seed Fund, the Government has taken its initiative a step further. Allocating 1,000 crores for gaining access to debt capital by providing the guarantee for these young companies.

    What will the Startup Seed India Fund do for Startups?

    Prime Minister Mr. Narendra Modi announced that the new Startup Seed India fund will assist companies source funds for their growth and operative costs. The main aim is to assist with gaining access to debt capital by providing a guarantee to potential investors and lenders.

    Your undertaking gets a solid back in form of a government guarantee and securing the needed funding. On the other hand, while lenders and investors have peace of mind having secured the return of their money.

    This follows a similar initiative by the Ministry of Electronics and Information Technology in 2020 to select up to 300 startups and provide them financial assistance. This would include funds up to rupees twenty-five lakhs and a host of other benefits.

    The Startup seed India Fund is expected to be designed along similar lines and more details are expected in the forthcoming weeks as the structure is set in place for encouraging new enterprises by the Indian Government.

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    Government Loans for Startups

    What Advantages would Startups get with Startup Seed India Fund?

    Startup India has a lot of in-store for the new enterprise. And as it sees a new dimension added to it, you can without doubt expect the advantages to be aligned with each other:

    • Simple Process: The government recognizes that setting up a new venture is exhausting; thus, the registration process is simple and straightforward. Most of it can be even completed online and the documentation required is easily accessible.
    • Inexpensive: The government can provide information about facilitators who help in completing expensive processes at lower costs. And the statutory and other fees may be borne by the government or kept very nominal.
    • Access to Funds: A 1000 crores corpus has been set aside by the government for the Startup Seed India Fund. This government will also provide a guarantee to lenders and other investors to help raise debt funding for the undertaking.
    • Simplified compliances: Many compliances and essential requirements have been simplified to save time and money. This makes the process more transparent, easily understandable, secure, and understood by the masses.
    • Tax Benefits: There are usually tax benefits offered to both new companies and investors. The new institution will get either be exempt from tax or reduced tax up to a certain turnover. The lender will have similar facilities for the money invested.

    How crowdfunding works in India to raise funding for startup
    The concept of crowdfunding has just started to gain momentum in India.‘Funding’ is the first problem new people, entering the world of business forthe first time, find it difficult. Startups have to turn to institutions andangel investors because there is lack of funds for bootstrapping or lack …
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    FAQ’s

    What is Startup India scheme?

    Startup India Scheme is an initiative by the Government of India for generation of employment and wealth creation. The goal of Startup India is the development and innovation of products and services and increasing the employment rate in India. Startup India was launched by Prime Minister Shri Narendra Modi.

    Who are eligible for Startup India?

    Being incorporated or registered in India for less than seven years and for biotechnology startups up to 10 years from its date of incorporation. Annual turnover not exceeding INR 25 crores in any of the preceding financial years.

    How do I get funding for my Startup?

    One of the most popular forms of startup funding is through venture capital. High-net-worth individuals, giant super funds, corporates and other groups invest in venture funds, which are managed by investors, who invest in startups on their behalf, taking equity stakes in the business.

    How much Fund has the Indian Govt. announced for Startups?

    The Indian Government has taken its initiative a step further by announcing the Startup India Seed Fund and allocated 1,000 crores for the startups.

    Conclusion

    Under the current Regime, India has seen a more robust environment conducive to the establishment and growth of startups. The Indian government has promoted new ventures not only to engage the youth. But also, to bring forth innovation, create employment, strengthen the economy and development of the nation. This new Startup India Seed Fund is another step to make the future brighter and make India self-sufficient.

  • Got Funded? Here Are Some Common Mistakes Seed Funded Startup Do

    5 Common and Avoidable Startup Mistakes

    First thought that comes in an entrepreneur’s mind is to get funds for his startup. The startup founders live in the biggest myth of life that, once they have funds for the business, their startup will automatically run. However, due to common mistakes seed funded startup do has led them to scum to halt. The seed-funded startup is great to kickstart a successful startup, but never assume it as a final destination, because the journey is very long after this. Launching a new startup is like a giving birth to a baby which ideally take a short span of time but the real responsibility comes after that. You need to plan the whole life of your baby and take care of all the needs. In the same way, after getting the initial investment through seed funding, planning and using it properly to boost the startup is important.

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    Numerous startup founders fail to manage it after getting seed funded, as they had utilized their all energy in getting the funding. As per a recent release of a report, it revealed the fact about the failure of new startups, which we would share with the esteemed readers right away. A common reason for the failure of the startups is they fail to deliver their promises and fails to manage their team. These are the two major reasons for the downfall of many startups. But these are not the only mistakes which startup owners do, other than this few other mistakes are present in the bucket to avoid failure which is enumerated –

    A Strict “Not To Do” List

    Hiring vs Firing.

    It’s very important to give the investors what you have promised them earlier. The selection of the team is very crucial and should be made after full clarity. As the whole performance of the business depends upon the employees that are going to work in it. So hire very carefully, so you won’t need to fire easily. Keep the following points in mind before hiring your staff:

    • Don’t hire your family members or friends in your startup. They might work at fewer rates, but they are not trained to perform the job. So never mix up business and personal relationship with each other, as this reaction might get explosive.
    • Don’t hire because a job seeker is ready to work at less rate. You need an experienced person to run the startup, as your business is already new, so don’t add a new equation to it. Hire someone with knowledge of market strategy and a person who is, as passionate as you about the idea of the startup.
    • Avoid outsourcing the employees. There are several companies present in the market, which outsource their staff and they are running very successfully. However, for new startups, it might cross the budget and pile up the employment cost.
    • Don’t hire only because a person has worked for Google, Apple or some other big tech company. You should not judge them on the basis of their previous company but you should assess them as per your startup requirement. An employee should be suitable to work in a startup culture.

    Keep your book’s Straight

    To utilize the money properly and keeping it from wastage, make the required documents and accounting records perfectly. The two major books that every business should be made are:

    • The bookkeeping is the major part of a successful business. You need to record all the expenses and incomes accounts to tally the growth of the business. You need to record all the petty and big cash expenses daily. From spending a dollar on coffee to the purchase of any new equipment all should be written in the accounts properly. To get the fair picture of your business, it’s highly important to make your journal daily. It’s good to get it checked by a Chartered Accountant from time to time.
    • The legal documents are required to make daily contracts or bindings. Startup owners normally spend thousands on hiring lawyers to do legal work, which they can easily do themselves. All the legal wording is available online and you know the procedure also, so why waste money on hiring an expensive lawyer, when you can do that on your own.

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    Get market Feedback & Communicate regularly

    To understand the nature of your customers and to understand the demand for your product regularly, it is very important to get feedback. Although hiding from the facts or not sharing your ideas with anyone, because of the fear that they might steal it is underestimating yourself. Your idea could be unique but one day or the other your competitor would come with the same plan. There is no worry if you share your idea because it will always get better with the feedback.

    Put curb on unwanted expenses

    You do many unwanted expenses in the daily course, which can be easily avoided or can minimized. So identify those expenses and reduce them to the bare minimum level. Few of the avoidable expenses are:

    • Don’t spend money on the locality of your office or the decor to attract customers, as they are here for the product and not to see your fancy chandelier.
    • Gifting the investors is again a bad idea because if they can fund your startup then they can even buy gifts for themselves.
    • Don’t waste time and money on conducting useless meetings, because no meeting has deliver any benefit to the startup owners and start having hurdle session with your team to motivate and get to the root of the problem.
    • Don’t hire unwanted employees like receptionist, as you are very capable to handle your own business calls and make your own coffee.
    • Go electronic and take the help of technology. For example, if you want to hire an assistant to handle your emails simply download a free Email sorting app and save an employee’s salary.

    Miscellaneous Factors

    • 90% of the startup owners don’t emphasize on the reason behind their failure. They keep chasing their aim while neglecting the reasons for failure.
    • The startup founders built their own LA LA land. All those compliments from people can be intoxicating. Feel good about them, but don’t let them get into your head. You have not made it big yet.
    • Not thinking of realistic unit economics.
    • Giving too many employee benefits like HRA, Education allowance etc. shrink your working capital funded by investors. Until and unless you own 100% stake in your startup, avoid giving unnecessary allowance.
    • If you are not planning a yearly budget for hiring & other things then you might end up landing in trouble.
    • Growing a lot of vanity metrics / Developing features that get users/engagement but may not help the business in a long run in any way to make revenues.

    Well yes, the startup owners make so many mistakes after getting seed funded. They really get crazy and spend the investor’s money rudely, but they forget the deal they need to return it at some point of time. Well, we hope that the above article has provided you with immense information to seriously manage the sum of investment and grow out of it.

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