Startup Masterclass #2: Startup Investor’s Perspective
Entrepreneurs are always curious about what investors think, how they review a startup, and how they can approach one. Chandigarh Angels Network, in collaboration with eChai organised a webinar specifically focussing on Startup Investor Perspectives featuring Kunal Nandwani, founder of uTrade Solutions.
From an entrepreneur who has raised funds externally to now being a seasoned angel investor himself, Kunal was able to put forth both points of view for the benefit of the audience. He shared that he raised a round of investment for uTrade but did not need to do so any more since the business could sustain further growth itself. He also added that it’s best to avoid external investment for as long as possible since not all companies need the same amount of money to grow.
Talking about his own experience of angel investing, he said that once he was able to set up a profitable business and interact with startups, he realised the Tricity needed a better platform for funding and mentorship. This led to the formation of Chandigarh Angels Network. Kunal added that entrepreneurs sometimes don’t realise how much experienced entrepreneurs and investors are keen on providing guidance. It is only a matter of reaching out to them and asking for help.
As for raising funds during a crisis period like the Coronavirus outbreak, he favours preserving energy and funds through proper management of cash flows. Fundraising will invariably slow down in the coming months and will become all the more difficult. Kunal also explains that in case there is very little runway left for a startup and they need to raise, they must start immediately because the process may take time- about 6 to 12 months in this tough environment.
While addressing a question on being protective of the idea, Kunal mentions that the idea does not matter, especially in the case of early-stage or pre-revenue stage deals. The distinguishing feature is always the execution, not the thought. He gives examples of Google and Amazon and how they were not the first to the market but became leaders because of their flawless execution.
Talking about the restructuring that takes place post funding, Kunal says that most angel investors would not want to interfere in the day-to-day operations or look to take control of the way the startup functions. They would be willing to guide and assist wherever required, but the entrepreneurs are the masters and decision-makers.
He goes on to mention how very early-stage startups can target government funds, bank loans prescribed for startups and a friends and family round to raise initial capital.
He also spoke about his own investing experience and why he invested in a telemedicine startup. He said he was excited by the market, the need and the social impact that would be created through such a venture and thus chose to back it. Apart from this, Kunal adds that investors would look to invest in markets that are going to explode in the near future, which might aid the startup’s success. He feels investors at the moment are bullish on healthcare, education and e-sports.
He suggests that startups must not go overboard while diluting equity and should retain control. They should not look to dilute more than 15-20% in each round.
To conclude, Kunal and Vineet Khurana, VP at Chandigarh Angels, explained all about the organisation, how someone can become a member, and how startups can approach for funding and mentorship.
Catch the session below.
