Sources of Finance for Entrepreneurs

Amit Grover, Nurture Talent Academy

Introduction
 Introduction to finance options
 Sources of funding
 Key mistakes entrepreneurs make
Vocabulary for finance
 Revenues
 Expenses
 Profits
 Breakeven
 Valuations
 Equity
 Debt
Stages vs sources of funding
Key questions before looking for funds
 What do I need the money for?
 How long will this money last?
 When is the break-even expected to happen?
 Who will be interested at the next stage?

 Long Term  Short -Term

 New ideas
 New projects
 Product development
 Capital expenses
 Acquisition
 Others
 Starting Operations
 Sales and marketing
 Operations
 Losses
 Business expansion
 Hiring
 Comparison chart
Stage Type of % Equity Valuations (in Rs) Average
investor offered Investment
Amount (in Rs)
Idea/Prototype Friends, family, <10% 1- 5 Cr 5-25 lakhs
Individuals (ex-
boss, HNIs),
Crowd-sourcing,
Incubators
Prototype – Angel Networks 10 - 20% 5 - 10 Cr 50 – 250 lakhs
market ready (Mumbai Angels),
Early Stage VCs
Rollout – paying Venture Capital 20 – 40% >10 Cr > 500 lakhs
customers
Expansion Private Equity, 20 - 60% >50 Cr > 2500 lakhs
Strategic
Investors
Maturity Initial Public >10% > 100 Cr > 2500 lakhs
Offering
Other sources
 Equity
 Incubators – Govt. - CIIE, SINE, FITT, Private - Freemont
 Business plan competitions – Power of Ideas etc.
 Government Grants – DST schemes for entrepreneurs
 Crowdsourcing – GrowVC etc.
 Private grants – MSDF, Premji (usually for social ventures)
 Debt
• Overdrafts from Banks
• Project Financing
• EXIM Banks
• International Agencies – IMF and World Bank
• Supplier/vendor financing
 Lack of clarity on equity vs debt options, right investor
 Know your investor, visit their websites, do basic research
 Not having a solid business plan with clear assumptions
 Start with a plan and keep improving
 Lack of patience
 Start meeting investors 3-6 months before you need funding
 Balance between investments and operations
 Do not spend disproportionate time running after investors
More Information
 www.sebi.gov.in
 www.yourstory.in
 http://www.karmayog.com/lists/fundagencyin.htm
 http://www.biz2credit.com/expertadvice/2010/05/29/sour
ces-of-funding-for-entrepreneurs/
 http://www.pluggd.in/startup-valuation-how-to-297/
Thank you

 Contact
 Email - amit.grover@nurturetalent.com
 Ph – 09833410822
 Web – www.nurturetalent.com
 Facebook – www.facebook.com/starpreneur