I was happy to get to be the moderator for an informative panel discussion today. Titled “Finance Your Venture”, it was part of Lufthansa Runway to Success Season 5 organised by TiE Chennai. The panellists were experienced hands on the trade – Ashvin Agarwal, Balram Nair, Manu Iyer & Satish Mugulavalli.
We talked about:
Right source of funding – Entrepreneurs need to think beyond the glamorous VC funding. There are many options available nowadays including Bootstrapping, Friends and Family, Friends of Friends to reach HNI (High Networth Individuals), Non-Collateral Debt Funding from Government/Public agencies, Seed Capital and grants from Government schemes and finally Brick ‘n’ Mortar businesses interested to be a strategic investor.
Stage of your venture you need to go for funding – Better to go when you have a Prototype/MVP; Great to approach after few customer validations.
How to find the right funder for you – The Funder (Investor) and Fundee (Entrepreneur) engagement is like a Marriage. Don’t waste your time pitching to everyone, do some background research to find an investor aligned to your objectives.
How to proceed when the valuation of your venture is not yet clear – Discuss with your investor, there are many instruments to handle this situation including convertible debentures, stocks to be allocated at an agreed discount on a future valuation and so on.
Importance of having a mentor – A right mentor helps you with pitfalls, guides you along the way and an introduction to an investor through a mentee will go a long way than direct approach to an investor.