Starting Up and the Founder

Updated 1July25

#fundraising #funds #raise #founder #founders #ceo #team #responsibility #director #India #cxo #cfo

Dear StartUp Founder

Some points you may want to keep in mind at your StartUp

Fund Raising

If there are two founders, one of them will have to more or less take up the job of fund raising almost full time till the raise is complete. Fund raising does take effort and time - and does involve getting the right content ready, interfacing with investors, building up documents like a business plan, projections, results, handling questions relating to the StartUps on legal, regulatory, financial and getting a good data room ready. Do also be ready to meet up with investors per their timelines, and be on time for meetings, and yes they do want to see you when you are presenting, so you will need a presenting view and one view for your face, and on a laptop, do not attempt the presentation through a mobile - the view is not good enough at all, and give them the largest possible view of the deck so they can see and understand the deck

What the StartUp does

Explain about your StartUp in around 10 minutes and this will be a great start. If you are unable too then do figure this one out - if you cannot explain your StartUp to anyone in the 10 min who will? The Pitch Deck needs to be in tune and never more than 15 or so pages, the deck is an initial introduction to the company, you can always send more information later when the investors ask for it

Patience

Fund raising does take time and patience is the key, it does take time to raise. You can learn from every pitch, and this makes the process iterative. Presenting a pitch is an art, do practice with your advisor(s) and ask them what they feel - this will give confidence for the final pitch

Founders and Involvement

Regardless of how many founders you have do sync with each other often and define roles and responsibilities so that each founder is building up their segment of the business and then there is a clear sync on the StartUp and what is required for progress - do make sure to meet with each other and understand responsibilities and progress, this helps a lot

The Founders must be 100% involved in the business, if they are not they need to answer why they moved away from the business or how they are supporting the business from outside and this will also justify their shareholdings and involvement. Investors in general are not impressed with part time founders. Most investors want the founder to be involved in only one business. If you have a founder who is not 100% in the business then define a timeline by which they will be in the business full time. In Indian StartUps the Founding Team must have a large stake in the organization for a Seed Raise, so in a Seed Raise situation around 80% atleast and preferably more after the Seed Round.

Attitude and Responsiveness

During calls with Investors and at all times be positive.. this helps the raise and allows for a strong and faster fund raise. Do share information asked for on time and do not duck communication with the Investor (if you do you may score a duck in investment too!) The attitude of the Founder during a Fund Raise is very important - do remain positive, and be helpful to the proposed investor. Do provide the investor with information they asked for within say a max of 3-4 days do not keep them waiting, if you are not interested in providing the information for the raise it is better to say this rather than keeping the proposed investor waiting - believe me they will not wait too long!

Responsibility

If other Founders do not take up the Responsibility you have a Solid Red Flag - maybe you are Founding/Founded with the wrong people? If this has happened do act on this fast and find people who can actually work with you in the business - StartUps do not have place for place holders - all must work towards the goals of the StartUp

Building up the Team

If you are too occupied in running the business, do hand fund raising over to other members of the Team (ideally the co founder) this may also be a great time to build up the Team even better by having stronger trust and responsibility to the Team, and making sure the Founder does not have to be involved in everything. A Founder involved in everything in the business and not handing parts to others is a huge negative signal to an Investor, this will not work and the investor will not like it

Documentation

Do get your documentation in order, otherwise regardless of what you do, you may not get your funding, it is very important to get your MCA filings, Tax filings (TDS/GST) in order too, not having this is a huge red flag. Always keep your data ready for due diligence in Folders that are properly labelled and protected - this will help in the DD process when an investor is considering an investment in the StartUp. A key point here, the DD process tends to be very extensive/detailed, so do keep all the documents ready and do not try to hide facts - it will not work and will negate the whole process

Use cases

Use cases are so important to explain how your StartUp works to help the Customer. These are especially useful when you explain your business to an investor - keep them ready with a process chart so that it is easier for the investor to understand your business

Video

If you have a 10 min video of your StartUp and process, it really helps to showcase the StartUp

Customer opinion

Customer opinion is so important, do keep a single pager ready with opinions of real customers, if you have videos this helps even more

Runway

Fund raises do take time, so plan the runway so that it lasts till the time of the fund raise, in general a runway of around 6 - 9 months means you do need to start the raise

Valuation

Yes there will be different times and opportunities and each time has a different valuation. Do understand the valuation being offered and sometimes you may have to settle for a lower valuation, down round to raise money. Do discuss with existing investors and then see what you can negotiate - running the StartUp and keeping it running is important and I am sure investors will understand a good negotiated solution

Do get in touch if you need help in your fund raise