If you are a StartUp
If you are an Investor
For General Queries
FAQ
I have an innovative idea that I want to pursue as a Startup. What guidance can Thinkuvate provide me?
My entity does not have a PAN. Would I be allowed to register it as a ‘Startup’ on the Thinkuvate?
Can I provide two mobile numbers in the registration form?
What are the documents required by Startups to get recognized under the Thinkuvate initiative?
What factors are considered by the Investors to invest in startups?
Different investors use different criteria to judge an investment. The importance of these factors would wary depending on the stage of investment, sector of startup, management team etc. Listed below are typical investment criteria used by investors:
1. Market Landscape: Refers to the addressable market which the startup is catering to.
Factors: Market size, obtainable market-share, adoption rate, historical and forecasted growth rates, macroeconomic drivers, demand supply
2. Scalability and Sustainability: Startups should showcase the potential upscale in the near future, a sustainable and stable business plan.
Factors: Barriers to entry, imitation costs, growth rate, expansion plans
3. Objective and Problem Solving: The offering of the startup should be differentiated to solve a unique customer problem or to meet customer need. Ideas or products that are patented showcase deemed potential in the startups.
4. Customers & Suppliers: Laying out your customers and suppliers, helps investors understand your business better.
Factors: Customer relationships, stickiness to the product, vendor terms, existing vendors
5. Competitive Analysis: A true picture of competition and other players in the market working on similar things should be highlighted. There can never be an apple to apple comparison, but highlighting the service or product offerings of similar players in the industry is important
Factors: Number of players in the market, market share, obtainable share in the near future, product mapping to highlight similarities or differences between competitor offerings
6. Sales and Marketing: No matter how good your product or service maybe, but if does not find any end use, there is no good.
Factors: Sales forecast, targeted audiences, marketing plan for the target, conversion and retention ratio etc.
7. Financial Assessment: A detailed business model that showcases the cash inflows over the years, investments required, key milestones, break-even point and growth rates should be made out well. Assumptions used at this stage should also be reasonable and clearly mentioned.
See sample valuation template here (to be sourced under templates section)
8. Exit Avenues: A startup showcasing potential future acquirers or alliance partners becomes a valuable decision parameter for the investor
9. Management and Team: The execution and passion of founder and the management team to drive the company are equally crucial in addition to the all the factors mentioned above
How do Investors earn returns from investing in Startups?
Investors realize their return on investment from startups through various means of exit. Ideally, the VC firm and the entrepreneur should discuss the various exit options at the beginning of investment negotiations. A well performing, high-growth startup that also has excellent management and organisational processes is more likely of being exit-ready earlier than other startups.
Venture Capital and Private Equity funds must exit all their investments before the end of the fund’s life. The common exit methods are:
1. Mergers and Acquisitions: The investor may decide to sell the portfolio company to another company in the market. For ex: The $140mn acquisition of RedBus by South African Internet and media giant Naspers and integrating it with its India arm Ibibo group, presented an exit option for its investors, Seedfund, Inventus Capital Partners and Helion Venture Partners.
2. IPO: Initial Public Offering is the first time that the stock of a private company is offered to the public. Issued by private companies seeking capital to expand, it is one of the preferred options for investors looking to exit a startup organisation.
3. Exit to Financial Investors: Investors may sell their investment to other venture capital or private equity firms
4. Distressed Sale: Under financially stressed times for a startup company, the investors may decide to sell the business to another company or a financial institution
5. Buybacks: Founders of the startup may also buyback their investment from the fund.