Raising money for your startup(The Hard Way)

I needed 5 mn dollars to get started. In 2009, start-up capital was limited in
India & few VC firms only invested in growth-stage companies vs true blue
start-ups. It took me 18-20 months to raise my first start-up capital.

Back in 2009-10 unlike a conventional tech sector like e-commerce which garnered
a lot of VCā€™s attention, setting up an entire B2C branded business like Milk
Mantra was tough as it involved manufacturing + deep supply chain.

My learnings from my experience

1. Raising money in an impact sector vs tech is tough:

Plunge into the sector only if you have the expertise in it. Approach impact
sector investors first. They know the space well.

2. Be ready for the long haul:

Your idea should have translated into a small yet scalable model before you
raise money. Investors bet on impact + scale & not ideas alone. Anticipate the
challenges before you raise money. If you under raise, you will shoot yourself
in the foot.

3. Raise as you scale:

Don't just scale to raise but raise to scale. If your business model can sustain
via bootstrapping or on a bare minimum capital, opt for it. Keep overheads low.
Overcapitalised startups run the risk of trying to justify to their investors
all the time.


Posted by Srikumar Misra on LinkedIn
link: linkedin.com/in/srikumarmisra