By Mohamad Faraz
There are a host of options for start-ups to consider: Accelerators, Angels, Syndicate Networks, micro-VCs at the Tier 2 level with funds around $ 100 million
By Mohamad Faraz
Every start-up requires funding to fuel a revolutionary idea that can leave behind visible impact on society. Currently, there are a wave of start-ups, unicorns and soonicorns that are proof of India’s ability to be at the front of technological and commercial advances happening across the globe.
Simultaneously, India is also witnessing an aggressive revolution with more venture capitalists entering the market who are willing to support early stage start-ups. In order to nurture the growth of a start-up, resources such as physical and non-physical assets, raw materials for products, operational costs, research and development, market research, acquisitions or expansions, etc. would most certainly be required, which requires backing from the right fund.
There are a host of options for start-ups to consider: Accelerators, Angels, Syndicate Networks, micro-VCs at the Tier 2 level with funds around $ 100 million. The Tier 1 VCs with higher funds include Global Funds, Family Offices, etc. For most start-ups a Tier 2 VC – micro-VC – should be able to give them the boost that is required to get them going.
At the early stage, a founder is more likely to see success if they approach accelerators, angel investors and micro-VCs at the Tier 2 level with funds less than 100 million, or syndicated networks – these should be able to offer them the much-needed propulsion. As the start-up grows in size, they can approach Tier 1 VCs with higher funds such as Global Funds, Family Offices, large-scale investors, etc. While there are no restrictions on the kind of funding that a start-up aims to approach, it is important that base research on the portfolio and background of the investor is undertaken.
The fundamentals of seeking funding
In conclusion, the investment needs to be significant and from an authentic investor interested in scaling up the start-up manifold. A result-oriented and productive partnership imparts great credibility to both the start-up as well as the investor. The journey towards turning into a unicorn then will be a lot easier.
Author is founding partner at Upsparks, a micro VC firm