Have
a big idea? Dreaming of Kab Banega Crore pati?
Driving down the road and flash! You hit upon an idea that
could change the world. An idea that will put you into the annals
of history as a pioneer but how and where do you start? Ill
help you find out.
Fund
raising is not hair-raising if you...
Start-ups usually start off with
a big idea, but merely a 'great idea' is not enough to get a business
going. Without the backing of a sound venture capital, the business
may not even take off!
The venture capital
The 'seed capital' is provided by a venture capitalist, which
comes in the form of first-stage financing for a start-up. They
also provide funding for expansion of firms with proven business
potential. It is essential that start-ups paint the right picture
to the prospective venture capitalist. The need to identify and
fulfil the following criteria becomes necessary.
Identify the lead investor
When a company is on the lookout for venture capital subvention,
one of the first things that needs to be done is to identify a
lead investor who will pitch in 25-100% of the required investment.
This saves the company a lot of time spent in waiting for smaller
investors who may prove to be more burdensome than helpful. Small
investors tend to be less profitable as they make heavy demands
on money and time in the long run.
Form an advisory board
A good way of tapping the right vein of investors is to constitute
an advisory board comprising of industry bigwigs and financial
luminaries. This will enhance your credibility and increase your
chances of getting the attention and the funds you need.
Take care of legalities Raising money always brings securities laws into play. For
this a lawyer's advice will prove to be invaluable. Hiring a lawyer,
right at the inception will save you from a lot of snags later
on.
Parley effectively Rather than focussing on technical nitty-gritty and the market
trends, it is best to focus on the customer benefits while introducing
the concept. Don't work out a concept just to impress the VC,
instead concentrate on the workability of the idea.
A viable business plan
The final step is the preparation of a comprehensive business
plan. This will have to be shown to the investors once the initial
meeting with the investors is successful. A Business model, Revenue
model and other details need to be explained in this stage.
Successful
companies, banks and industrialists are ready to provide Venture
Capital and incubation services.
An
innovative idea, powered by a strong financial backing and services
that are highly beneficial to the customer will ensure success
to start-ups who are keen on making it big.