Founder’s Huddle – Funding challenges

The world of startups is powered by creative ideas. The only other factor as compelling, is the capital. Almost 90% of startups fail in the initial stages or just do not grow beyond an idea for lack of funding. A business  must be fuelled by funding at various stages of growth along with reaching targeted milestones.

And when it comes to funding your ideas, one size does not fit all. Therefore, raising funds can be confusing, often overwhelming. You may take years to come up with an idea, make a prototype and perfect your pitch to investors at the end all it takes is nod in the right direction to make a business out of it.

           How much to raise and how to utilize the funds are the next most crucial questions an entrepreneur faces. For most start-ups, Seed funding and Series A are the most difficult phases since their pitch does not factor-in financial planning.

A Harvard Study attributes raising too much funds too soon as one of the Top 10 reasons why most startups fail. In addition to this, every business has its own cash-burn rate and entrepreneurs need to be wary of accelerating too fast and too soon. Judicious utilization of funds not only ensures you don’t run out of cash but also that your venture has robust fundamentals to be able to seek the next round of funding.

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Understand Startup Finance and Fund-Raising

Spark10’s Founders’ Huddle aims to address all such problems that founders face. Our cases driven program is  conceptualized and designed to help entrepreneurs solve their problems based on similar issues that other startups and businesses faced in the past.

FOUNDERS' HUDDLE is a program that brings some key experiences of past startups (alive or dead) in form of cases that you will analyze and discuss during the session. By the end of the session, our aim is to give you the tools and method to determine for yourself the right way to approach your problems in your startup.

To begin with, we have created a program to help you understand startup finance and funding.

 

Fund-Raising Hacks (2-day case-based workshop)

Here are the few things we cover during these two days:

* Determining the viability of your idea/startup (Should I really start or continue this business?)

* Determining your operation strategy using financial statements (What should I do next - expand or stabilize?)

* Determining how to value your idea or startup (How much is my company worth?)

* Deciding what terms and which investors are good for you

* Understanding the fundamentals of investor pitches (What numbers should I show?)



Getting the most out of your mentor

 

slide1If there’s one irreplaceable asset that your startup might have, it would be your mentor. Having a really good mentor can help you in ways that would normally take your months or even years to do. And it’s because they give you advice based on their experiences that can help you avoid making mistakes that a typical novice on the field would make. Having one is great, but just having one (or even more) is not enough. You need to know how to extract the most out of them.

Think of the interaction with a mentor like a web search, or perhaps a book search in a library. There are things you must know and do before you get the right – accurate and adequate results.

 

Know what you are looking for

Let’s say you wanted to read a book, but are not very clear about what you want to read – what subject you want to read, what topic within that subject, whose viewpoints, etc., and so, you type in “book” in the library search system. Do you expect to find what you were looking for? (Try that with Google. Type in “website” in the search bar and the chances of finding a website of your interest is pretty slim, almost next to impossible.)

You have to really know what you are looking for if you want to search for answers. A mentor’s mind is like that search system, but unless you know what you want, there not much sense that the mentor can make for you.

 

Drill down to specifics

Okay, so you want to know more about strategies for your business, great! “Oh, dear mentor, please tell me about strategies for business.” Chances are that the request will, as Google search result would, make your mentor start all the way from basics, “What is a strategy?” (Of course, your mentor, in all likelihood, would be drilling down for more details on what you seek.)

Instead of doing 20 questions with your mentor where your mentor has to figure out your question and in the process wasting a lot of time, do the ‘drill down’ exercise yourself. Let’s try that right now (it’s a crude example, but it’s more realistic that you might imagine):

 

“I want to know more about strategies for my business?” (To achieve what?)

“I want to figure out a strategy to grow my business?” (In what sense?)

“I want to figure out a strategy to make more products?” (Produce more or make new products?)

“I want to figure out a way to produce more of the products we already have?” (Do you have constraints?)

“I want to figure out a way to produce more without expanding my production line or hiring more people?” (Now we getting somewhere… what are you willing to do for that?)

“I want to figure out an optimal strategy for increasing production without decreasing my bottom-line (reduce profits/increase costs)?” (The only way to do that is by improving efficiencies of your production line, so…)

“I want to figure out strategies to improve the efficiency of the production line to produce more, capture the markets and grow my business?” (I can help you with that!)

 

Make a really specific ask

Most often, people want to help others. The only time when they are not enthusiastic about helping others out is when they are unsure about what is it that they would need to do. Mentors are the same. They want to help you, they really do, but a vague or ambiguous ask is going to scare them away.

Once you drill down to what you want, make a very specific ask and be nuanced about the information you provide or seek. Here’s an example of a snippet of the conversation or email:

“Hi Ravi, I want to  figure out strategies to improve the efficiency of the production line to produce more, capture the markets and grow my business? Could you help me determine which methodology – six sigma or TPM, would be the best approach? Would you have time to discuss this with me on Monday morning at 9am? I could meet you at your office.”

 

You will need to do the groundwork, always

One of the worst mistakes I have seen entrepreneurs make is to expect the mentors to do some of the work for them. Listen up, they are not going to do any of the work and you would be immensely stupid if you expect them to do so.

Here are few things entrepreneurs make the mistake of expecting their mentors to do, using the example we have been using so far:

 

  • Buy or supply reading learning materials (books or links on six sigma or TPM)
  • Learn something new just to make you understand
  • Learn new ways of explaining things to you
  • Calculate the pros and cons of each method
  • Create or test hypotheses for you (in other words, help you define and execute a pilot project)
  • Identify resources for you (if not already known to them or not in their network)
  • Speak to people or represent you
  • Give you ready-made answers

A mentor is someone who shares her experiences and imparts the wisdom from those experiences. She is there only to show you the possible options available to you. She may guide you, but it’s not her role to carry you through the door.

Do not make the mistake of making your mentors do more than give guidance; if you do you will only eventually erode the compassion and trust that she has placed on you.

 

These are not the be-all, end-all of mentor relationships (management). These are some things that, if you do, you will have a healthy relationship with and make the most out of your mentor.

Ravi Warrier (@raviwarrier), COO, Spark10

 

Govt to train 50 lakh people in 5 yrs in factory skills: Rudy

The government has planned to train 50 lakh people in factory skills in five years in a bid to bridge the gap between unskilled youth force and industry requirements, Union minister Rajiv Pratap Rudy said today.

“As per the vision of our Prime Minister, India should be the ‘skill capital’. People have education but lack the employability skill. We have the demographic dividend but we need to tap it.

“Our industry also has requirements of skilled workforce. In five years, we need 3 crore people in construction sector…And, therefore, as part of the vision of our ministry,

we plan to train 50 lakh people in five years, in factories with stipend,” he said.

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