How to find investors for startups in India?

India is a country that generates many startups every year, and some of them become unicorns after some years as well. The startup ecosystem is generally generated from Delhi-NCR as well as Bangalore, which is the startup hub or silicon valley of India as well but sometimes starting something of your own requires startup financing as well, which is explained in our post today.

How can I get investors for my Startup in India?

1)Venture capitalists:- The venture capital process involves dividing a company’s equity into ownership shares sold to investors, and forming separate limited partnerships. Occasionally, they develop alliances with many Startup Investing in the same industry. If you require more funding than a personal or private investor can supply, a venture capitalist canada may be the best option. Venture Capitalists who wish to support prospectively prosperous enterprises will find venture capital a viable option like JC Team capital company in India, USA, and Canada for helping your Startup to grow easily with startup funding for your assistance.

2) Angel investors:- Angel investors are among the most recognizable categories of investors. They are wealthy individuals who provide startup funding canada in exchange for a stake in the company. They may be wealthy friends, relatives, acquaintances, or even professionals. Angel investors, also known as business angels, private investors, or angel funders, seek a suitable match between an entrepreneur and his or her team, as opposed to focusing just on the profitability of the business. They could enhance the financial assistance with their industry knowledge. It provides flexible capital, whether it is a one-time need or ongoing assistance. Take the time to find a funder who knows your brand, believes in it and is prepared to help you in the manner you require.

3) Individual investors:- Individual investors are a network of relatives, friends, and acquaintances who can give an early-round of investment for your Startup. They are considered personal investors. This group of investors is applicable while you are in the early stages of your Startup, paying for feasibility tests and testing your brand. This form of finance can only assist you to a certain level, beyond which you must consider additional funding options. Paperwork is a further factor to consider when onboarding personal investors. We advise that you have an attorney guide you and your startup investors through the papers.

4)Peer-to-Peer lending:- It is a form of direct lending that connects borrowers with people who have funds. Higher interest rates relative to alternative investment options stimulate investors. Borrowers turn to peer-to-peer lending when traditional financial institutions and other funding channels are inadequate. Many companies facilitate peer-to-peer lending. An investor submits a bid for a borrower’s needs, which the borrower may accept or reject. There is a maximum amount that can be borrowed through this mode. Individual lending cannot exceed Rs. 50,000, and a lender’s total lending across all platforms cannot exceed Rs. 50 lakhs. We suggest conducting an extensive study on this restricted channel to decide if it is an appropriate source for you.

How do I find investors for my Startup?

1)Create a profile on platforms that bring together investors and entrepreneurs:- You may be asking what you need to do to spread the word about your brand. Here, platforms such as Angel List come into play. This is an efficient and useful platform for informing potential investors about the products and services you provide. Concentrate on establishing an impressive profile, then share it with organizations and request recommendations. This is a method for contacting potential investors and increasing the likelihood that one will invest in your firm.

2)Make a list of all the investors with whom you will share your ideas:- If you have a list of potential investors that you believe could invest in your project, you must create a list of them. After compiling a list of potential investors, you should reach out to seasoned business owners and enlist the aid of a knowledgeable professional to understand the art of selecting the best investors.

3)Improve your networking skills:- If you have a network of dependable investors and committed entrepreneurs, you can anticipate greater and more rapid outcomes. Conduct thorough research on each investor, and if you have any contacts who can assist you, reach out to them. Here, the reciprocal relationship comes into play.

4)Compose an engaging and appealing introduction:- The initial impression is the one that lasts the longest. When you have a compelling introduction prepared for the investor, they may be more interested in you. The purpose of the pitch is to increase investor interest. Entrepreneurs seek out the greatest investors, and this is what ensures that the business cycle continues. If business objectives are established early on, you can anticipate a prosperous future for your company. There is no foolproof approach to obtaining capital from investors. It requires perseverance and effort to crack the best nut. For both small and large-scale business owners, securing money when it is most required becomes a struggle. This is where FDI India comes into play, as the trouble of asking for a loan, the considerable paperwork, and the unpredictability does not thrill every business. We at FDI India strive to simplify the complex foreign investment structure, with an emphasis on sustainable investment, so that Indian enterprises do not perish from lack of financial stability. If you are a business owner looking for low-interest loans, FDI India will connect you with the appropriate foreign investor.

Conclusion:- After reading this blog, you will understand how to find investors and make the right pitch to get investors for your business and Startup in India for startup funding or startup financing ontario easily for your company by taking services from companies like JC Team capital which is there for your support system always.

Increasing Number of Investors for Startups US

Startup investors have gotten a lot more attention in recent years, and they’re getting more attention all across the globe. In venture capital firms Canada, the number of startups is rapidly increasing, and more assistance is being offered across the board. This report examines the present condition of the Indian startup ecosystem with three objectives: to offer an understanding of the growth drivers and motivations of Indian company founders, highlight the obstacles these businesses face, and define the pillars that support them

Light Bulb Ideas Creative Diagram Concept

A growing number of startups are emerging in India

Beginning in the last several years, startups in India, like many other regions of the globe, have attracted more attention than ever before. Their numbers are increasing, and they are increasingly being recognized as critical engines of economic development and employment creation in the world. Small business funding for startups may offer effective solutions via creativity and scalable technology, and as a result, they can serve as vehicles for socio-economic growth and change in their communities.

The startup environment in India has rapidly changed over the past two decades. Although few firms were formed in the 2000s, the ecosystem was still in its infancy, with just a few active investors and a limited number of support organizations such as incubators and accelerators.

Why is it beneficial for startups to increase their investor base?

Consumers’ perceptions of value are shifting

As a result of the epidemic, numerous businesses, including lending, education, banking, and healthcare, have seen their digitization speed. As a result, the consumer internet marketplaces in India are becoming more developed, fueling the financing momentum.

Furthermore, the lockdowns have compelled even many customers to seek digital alternatives. Even customers in Tier II and III cities seek online options to meet their everyday requirements, whether for payments, prescriptions, consultations, or even purchasing groceries.

Increasing the level of digital inclusion across all enterprises

Everyone, from old legacy firms to small and medium-sized businesses (SMBs), student entrepreneurs to large corporations, has one similar goal. It is to have the appropriate technology stack integrated with the right location at the right time. It also provides scalability, which makes future partnerships simpler and less costly as a result of this.

The epidemic offered a significant boost to businesses working on increasing automation and digital environments, resulting in a significant increase in investment in these firms. Indian enterprises, particularly those supported by distinguishing technology, are well-positioned to tackle global challenges with relative simplicity. It opens up the possibility of receiving funds from all across the world.

Futuristic smart city with 5G global network technology

Global talent is waiting for you at the door

If having a clear vision is critical for defining the course, having a solid team is essential for getting to the goal except for businesses that depend on physical labour and hence require their workers to be present at work, the pandemic presented opportunities for many organisations to find and recruit talent worldwide.

For example, Indian corporate technology firms have been employing specialists in blockchain, data analytics, artificial intelligence, IoT, and other fields from the United States, the United Kingdom, Israel, Egypt, and other countries.

Social networking concept

Increased Opportunity for Networking

The lockdowns have not affected networking in any way. The epidemic ushered in the emergence of digital networking sites such as Clubhouse and Lunchclub, TapChief, and CoffeMug.ai, to name a few. Likewise, events have moved online, enabling participants from around the globe to network and assemble.

These modifications made it simpler for entrepreneurs to network with startup investors; the process became less time-consuming and less expensive due to these modifications.

Exit model and worldwide scalability are being pushed for

Companies in the growth and late-stage stages are increasingly developing internationally scalable solutions. Several organizations have expanded their customer base into other areas such as the United States, the United Kingdom, Israel, Abu Dhabi, and other Middle Eastern nations.

Furthermore, late-stage firms are increasingly pursuing initial public offerings (IPOs), indicating favorable exit prospects for Canadian angel investors. Options such as exceptional purpose acquisition companies (SPACs) and other similar entities are appealing exit avenues for startup investors.

The epidemic has triggered a new cycle of liquidity injection worldwide, and as a result, enormous pools of money are actively seeking good possibilities. It seems to be driving public market activity, which in turn is fueling private market activity to the point where the vast majority of venture capitalists are now focusing on “angel” stage transactions with broad-based funnels.”

More Financing options are Available

Increasingly large amounts of money are being invested in investors for startup Canada by family offices, entrepreneurs, and successful entrepreneurs themselves, resulting from the maturation of the startup ecosystem. It is being used to support early-stage companies and those in the middle and late phases of development.

Financial Advising in 2022: 6 Trends Startup Investors Need to Watch Out

Growing demand, innovation, policy support, Growing penetration of Startups (FinTech), Investment, and Volatility in the market are factors that are expected to shape the financial advising landscape in 2022. New trends would determine the growth of the industry and its prominence in the following normal situation arising due to the ongoing COVID-19 Crisis.

Startups and Investors need to closely watch out for six dominant trends in 2022 to do robust financial planning for themselves:

Small Business Funding
Learning from the Crisis In the new normal, people have realized that life will not be the same again. Hence, from professionals to small businesses/startups, they need safer and more gainful financial planning. A casual or easy approach towards wealth management has become a thing of the past. Venture capital firms or startup investors are expected to redesign their strategies. They would be leveraging the growing demand for robust financial planning by startups. As technology has shown its metal during the pandemic, innovations would be vital in grabbing the opportunities. Financial advisers can assist clients in identifying and applying lessons acquired during the pandemic to their financial planning.

Relocation of Funds by Startup Investors
Startup investors are expected to reallocate funds to investments that can do well during pandemic times. Technology, e-Commerce, Financial Services (FinTech), Healthcare (Health-Tech), and Consumer products would continue to dominate in 2022 in terms of attracting seed funding. The volatility in the market is likely to increase the popularity of momentum and trending strategies throughout 2022. Investors are expected to use economic and market data to determine if the future trend is a good or bad time in the market. Angel investors would always use data to determine where the momentum is in the market sectors at any given time. It makes sense for angel investors to reallocate funds to high-growth sectors.

Communication: Hybrid to Dominate
Many financial advisers were forced to adopt a virtual meeting style with clients due to the pandemic, but advisors will not be too hasty to forsake the practice. In 2022 Financial professionals would employ a hybrid strategy that blends in-person client contacts with continuous virtual involvement after things settle in 2022. Virtual meetings allow advisers and clients to make better use of their time while also communicating more frequently. Advisors can also engage with stakeholders more efficiently using virtual meetings. In 2022, the most effective tool for the financial advising community is predicted to be a hybrid communication strategy.

Investors and Risk Management
The financial advising sector has had a paradigm change in the last few years, driven by changing demographics, more and more startups joining the industry, and rapid digitalization. Big data and advanced analytics are transforming the financial advising sector with new ways to engage with new clients, manage client relationships and manage risks. Investors for startups of today have access to vast information, knowledge, and tools for strategic investment planning.

Growing Demand for Seed Funding
In 2022, innovation-driven startups are expected to ask for more funds from angel investors and venture capitalist funds. Higher demand would come from several high-growth sectors. Startup investors would continue investing in sectors such as FinTech, EduTech, AgriTech, FMCG, E-commerce, logistics and supply chain management.

D2C to Dominate
Direct-to-customers (D2C) and Deep Tech are expected to dominate in 2022. Investors would be eying these two segments with deep interest. Many startups in Financial, Agriculture, FMCG and other sectors would emerge from small towns offering tremendous opportunities to startups and investors.

Startups are expected to fill up several gaps in service delivery created by the pandemic. In countries like India and Canada, a new startup ecosystem has arisen. Investors see a tremendous upside in supporting small enterprises in their early stages of development. All stakeholders can expect a win-win outcome in 2022.

SAFE: Deferring Valuation and its Impact

SAFE: A popular technique for securing early-stage funding

The SAFE (Simple Agreement for Future Equity) instrument has become a popular technique for securing early-stage funding. It has surpassed the popularity of convertible bonds in seed funding.  With SAFE, investors make an up-front investment with an agreement to convert it into an equity deal at a valuation to arrive at later or future funding rounds.  Unlike a convertible bond, it is not a debt prior to conversion and it has no maturity date or interest payments associated with it. Investors for startups accord importance to valuation and that finally leads to conversion. Venture Capital (VC) firms and Investors before issuing the SAFE instrument assess every detail of valuation. On the basis of this assessment, they make their projections.

It is also evident that the traditional SAFE instrument does not offer key investor protection compared to a convertible bound. But on several other parameters such as ease of implementation, costing, SAFE is well-suited for both venture capitalist firms and fund-seekers. Seed funding Canada has been witnessing wider use of the SAFE instruments. Angel investors in Ontario prefer SAFE to any other traditional instruments.

Priced and unpriced seed rounds

Priced and unpriced seed rounds are in practice these days.  A priced seed round is similar to any other round of fundraising in that the firm is valued, and investors purchase shares in the company for cash at a price defined by the valuation. The company isn’t given a valuation in an unpriced round, and the investor isn’t necessarily buying a fixed amount of equity at the time of investment. Rather, it’s an agreement between the investor and the company to issue shares in a later, priced round in exchange for a capital infusion during the unpriced seed round.

In a rush to get advanced rounds of seed funding, founders of startups believe that postponing pricing until the valuation is higher. In several cases it found that sooner or later the equity will be priced and past and current dilution will come in, all at one time – this will effectively deliver a compound effect on founder dilution. Hence, by deferring the pricing everyone is taking a risk.

Raising seed funding from Venture capital firm

Valuation caps and discounts, for example, allow investors to buy shares at a cheaper price than the current market price. This raises the number of shares they can purchase, resulting in the creation of more shares. For an entrepreneur, raising seed funding from VC firms is one of the top priorities. However, modes of getting capital seeds sometimes appear confusing and complex. There are several instruments being used by investors for startups. Seed funding leads to the advancement of startups and entrepreneurs. They know that valuations and fresh rounds of funding can lead to dilutions of their and early investors’ stakes in the company over time.

Why is building a Core Team important for Startups

Innovation-driven startups thrive on funding by venture capital firms (VC) and investors to be precise. Startup financing is determined by a variety of factors including the vision of founders, strong leadership, or core team. Hence, building a strong core team continues to play a catalyzing role in attracting investors for the business. It is the core team that is instrumental in realizing the dream or vision of the founder, not only creating a niche in market places but attracting seed investors at the initial stages. 

The team is a key factor venture capital firms look for in an investment. For Canadian angel investors such as Jani Venture, it is a strong core team that puts them at ease to take a final decision for startup investing. Over the years, startups have realized the fact that venture capitalist firms and angel investors invest in people, not just businesses.

Passion is Paramount 

Investment for startups is closely linked with the passion of the core team. Investors want to see a team that is passionate about their product or service. They drive the growth by overcoming any challenges they face in the growth process. Investors also want to see the team share the Founder’s vision and offer the relevant skills and experience to face future challenges the business will face as it expands. When it comes to building their core staff, smart entrepreneurs are very strategic, which makes it a source of value that VCs are interested in. The core team helps in the realization of the vision of the founder.  A team that lacks passion spoils growth.

Hence, it is the key responsibility of a founder to create a passionate core team that adds value to shape the startup and its growth. It is common knowledge that no successful venture can be attributed to a single person. The team is responsible for turning a founder’s vision and ambitions into reality.

Creating Cohesive Culture 

The core team is not only responsible for realizing the short-term goals of the founder but also setting scalable long-term goals. A core team of a startup divides key roles among themselves and assigns separate goals for each one of them. In the process, they create a cohesive work culture. To achieve these short-term, attainable, and long-term goals, the team will combine their attitude, aptitude, skill, knowledge, and competence. Collectively, they perform multiple operations taking place at the same time.

It is the core team performance that leads to one milestone after the other and finally takes it to a higher stage of advancement. Overall, a core team is the culmination of all of the individuals’ vision, mission, beliefs, values, knowledge, experience, and natural personalities. These factors are expected to continue to permeate through the structural hierarchy of any forward-looking startup. 

From the Tracks of Mind 

‘From the tracks of mind, you develop the railway track,’ thus goes a saying. No idea can be greater than the team that implements it, since, without the team, the idea will remain just that- an idea. As a result, the most important contributing factor for success is the core staff. It is the foundation upon which a business is formed. So choosing a core team wisely and seeing how things start falling into place smoothly make the journey towards a vision far easier and quicker.

As diverse skills, competence, and expertise are required to bring in synergy, the founders prefer to form their core team from different spaces such as technology, finance, legal, sales, and marketing among others. Hence, if a founder is from a tech background, selecting core team members with diverse skills would always add value for a tech startup. To cross-pollinate and maintain a solid balance in the startup, it’s critical to have a diversity of philosophies and talents.

What VCs look for the Most?

As VC firms and investors recognize that business plans can alter every day as market conditions change and new possibilities and problems emerge, they fund a startup based on the expertise of the core team and not only on the business plans. A case in point is Jani Venture as it always looks for a strong core team that has the potential to adjust to the changes and give the startup an edge in the market. A startup’s fate is largely determined by its team, and even the strongest idea might fail if it is not implemented by a team with the necessary skills. With a simple comparison, Harvard Business Review explains the necessity of a strong core team. “Either the “jockey” or the “horse” is preferred by venture capitalists. (The startup’s strategy and business model are the horse, and the entrepreneurial team is the jockey.) Both the jockey and the horse are important, according to VCs, but the founding management team is more important.

Startup Investors needs to deploy innovative Valuation Methods

Arriving at the value of businesses, especially a startup, is always difficult as it demands a deeper understanding and scientific measures as opposed to conventional methods. Investors for startups deploy various methods to arrive at a value and then a final call for funding. Commonly, a startup is a new business started by an entrepreneur and it looks for seed funding from several different investors.

For a new company with little or no revenue, the task of valuing the entity becomes especially challenging for startup investors. Conventionally, investors usually value mature companies with steady revenues as a multiple of their Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). But a startup or non-listed company with no sales or revenue figures to show, raising capital remains a priority, though challenging. Meanwhile, venture capital (VC) firms in Canada have also adopted innovative methods to evaluate new businesses for investment.

Valuation Methods
There are several types of Valuation Methods:

Berkus Approach
The Berkus Approach is one of the most popular types of valuation methods. It takes into consideration five key success factors for any startup: Basic value, Technology, Execution, Strategic relationships in its core market, and Production and consequent sales. The majority of Canadian angel investors including Jani Venture accord importance to six key factors and those include Team quality, Market size, Disruptive potential, Technological differentiation, Market competition intensity, Marketing/distribution strategy, and Customer feedback. Venture capitalist firms would assign weights to each of these factors and compare them to competitors. Hence, the Berkus Approach is incorporated in their decision-making.

Cost-to-Duplicate Approach
The Cost-to-Duplicate Approach factors in all expenses and costs of the startup operations and product development or service. It also factors in the purchase of physical assets. All of these expenses are taken into account when establishing the startup’s fair market value. However, this approach has a drawback in that it does not examine the company’s future potential by conducting prediction statements of future sales and growth. It also ignores intangible assets in addition to physical ones.

Market Multiple Approach
The market multiple methods functions similarly to other multiples. The value of recent market acquisitions of a similar nature to the company in issue is used to generate a base multiple. The market multiple is then used as a starting point for valuing the startup.

Risk Factor Summation Approach
The Risk Factor Summation Approach assesses a startup by measuring all of the company’s risks that could affect the return on investment. The ultimate value of the startup is established after taking into account all types of risk and applying the “risk factor summation” to the initial estimated value of the startup. Management risk, political risk, manufacturing risk, market competitiveness risk, investment and capital accumulation risk, technology risk, and legal environment risk are some of the sorts of company risks that are considered.

Discounted Cash Flow Approach
The Discounted Cash Flow (DCF) method is used to forecast a startup’s future cash flow movements. The “discount rate,” or rate of return on investment, is then computed and applied to the expected cash flow’s value. Because startups are still in their infancy and investing in them entails a significant level of risk, a high discount rate is frequently applied. Positive or negative expected Free Cash Flows (FCF) over the next five years are useful indicators for assessing a variety of risks. As a result, venture capital firms place a higher value on enterprises that are expected to be profitable.

Jani Venture‘s methodologies are unique in that, unlike most venture capital firms, they conduct an extra-financial examination in conjunction with the valuation process. Now, this is being adopted by other Canadian angel investors too. Jani Venture has access to a large database of startup/businesses ratings(driven by platforms subscribed to), based on that they refine the valuation bracket in relation to the startup’s positioning compared to other rated businesses. If a startup has a score that ranks it among the top 10% of all rated companies, it would select the highest range of the valuation bracket. Overall, the discounted cash flow method is the most preferred type of valuation of startups with strong growth potential.

Top Mistakes that Startups Make

A great idea doesn’t naturally mean a great startup. It remains a bitter truth of the industry that nine out of ten startups meet with failure and the list includes even those with the best ideas. Running a successful startup is often portrayed as a single factorial problem where you have to find the next ‘great idea’ when in fact it remains a complex multi-factorial problem. Finding an idea is just one task in the long journey of establishing a successful business from scratch. In this journey, failure is more constant than success which remains a rare miracle.

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