India’s start-up space, which was brimming with confidence a couple of months ago, is now going through a stark reality check. With several well-funded start-ups like Local Banya, Tiny Owl, Housing and Helpchat downsizing, the sheer excitement for quitting your job or dropping out of school and starting-up has been tamed.
For all those brave-hearted souls seeking to launch their own start-up, my sincere advice would be to not sell yourself short. While there is chatter of the funding taps drying up, there is an acute need for first time entrepreneurs to evaluate the kind of investor they would go to bed with:
While an entrepreneur knows most about his/her own business, an investor’s knowledge of your industry grossly helps shape your business model. An investor investing primarily in IT cloud services may not be the best fit for a travel and tourism portal, as scale-up and growth time frames may grossly differ in the IT segment and the travel and tourism segment.
This will define how far the investors are able to support the start-up. Functional aspects like growth hacking in marketing, operational finance support, technological know-how, and management skills need to be looked at. You need a partner who would guide and support, besides just pumping in money. A good investor should be able to keep nudging you to plough on.
High Networked Investors (HNI)
Rather than their networth, network defines the reach your investment partner would bring to your business. If your investment partner is well networked it would help grow your business in multiple ways. A well networked investor will be able to connect you with potential employees, strategic partners to new investors.
Mind over matter still holds true for a successful start-up and everyone needs to be in sync and in agreement to the vision and mission of the company. A good, successful start-up can fail inspite of having good funding and investors. Conflicts and ideals mismatch between the founding members and the investors have brought turmoil to start-ups like Housing.com. Transparency, trust and understanding will go a long way in sustaining a successful working partnership.
Values are the fundamental backbone of any good start-up, while this gets conveniently missed when the other points are fulfilled, this will define your existence in the long run. What you stand for defines you as a person which aligns you to a specific vision. Everyone needs to be in the same alignment, all partners, all employees, everyone associated with the start-up. Empathy towards the success of the business is what will take off your flight.
Ideally, an investor would be strong in each one of these traits. Which trait would you weigh as being the most important to look for in an investor?