Ms. Shuba Girish of Credens Fiduciary Solutions sharing her knowledge & experience with future entrepreneurs at Christ University, Bangalore.

1. ARE YOU READY FOR
FUNDING AS AN EARLY STAGE
ENTREPRENEUR
Presented by:
Ms Shuba Girish, Director
CREDENS FIDUCIARY SOLUTIONS PVT LTD, Bengaluru
27th January 2017

2. STARTUP SCENARIO AT PRESENT
• India emerging as a hot hub for Startups
• 11500 Startups by 2020
• Top locations are NCR, Mumbai, Bengaluru, Chennai & Other
Cities
• Bengaluru has emerged as the “STARTUP HUB”
• In 2015 Bengaluru was ranked 15th in the global startup
ecosystem
• 72% of the founders were < 35years (91% male and 9% Female)
• 125% growth in 2015 as compared to 2014

3. 2016 Highlights
• US$ 3.5 to US $ 4 Billion funding was done in India
• Number of deals increased (around 924 Enterprises funded in
various forms from Seed Funding to Series A, B C etc)
• 28.5% of deals in Bengaluru
• NCR 1.12 Billion, Bengaluru: 1.06 Billion, Mumbai 1.04 Billion
• In 2015: 575 early stage deals (Seed/Angel Funding) to the tune
of US $ 578 Million
• In 2016 : 571 deals and funding done US $ 223 Million ↓

4. Continued
• Sectors funded were: (number of deals)
• E commerce- 150
• Enterprise/Saas- 105
• Healthcare -97
• Fintech- 86
• Edtech – 58
• Consumer Internet-56
• Foodtech – 44
• Transportation-32
• Digital media – 29
• Logistics - 28

5. Continued
• Top beneficiaries:
• Ibibo: $ 200M got acquired by Make My Trip for $ 720 M in 2016
• Snapdeal : $ 200 M , valuation $ 6.5 Billion
• Hike Messenger : $ 175 M
• BigBasket: $ 150 M
• Car Trade : $ 145 M
• Shop Clues : $ 100 M
• Book my Show : $ 81m
• Byju’s : $ 75 M
• Rivigo : $ 75 M

6. Continued
• Number of Unicorns are increasing , the latest to join the elite group
is ShopClues and Hike Messenger, the earlier ones being
• Paytm, Zomato, Quikr, Inmobi, Snapdeal, Ola, Flipkart etc.
• India is one of the youngest nations for growth of Startups
• $ 13M invested per day by investors
• Investment appetite across sectors
• Dollar amount invested has fallen
• Graduating from Pre-series A level to Series A facing bottlenecks
• Valuations have undergone corrections
• FOMO (Fear of Missing Out) based valuations are coming down

7. Eye Openers for 2016
• Investors are looking primarily at these economic drivers :
I. Growth
II. Scaleup
III. Capital Efficiency
IV. ROI
V. Unit economics
VI. Potential for market growth
VII. Other attributes

8. Status in the PE ,VC areas
I. Slow down in Investments – funding drought
II. Valuation downsizing-Snapdeal, Flipkart, Ola, Zomato,InMobi
etc
III. Reflection by businessmen and scrutiny by Investors on the
reality
IV. Investment consolidation through mergers, slashing debt
V. Maturity in investment patterns
VI. Both PE and VC deals fell in number and value when
compared to 2015

9. Status in the PE ,VC areas-
continued
I. Information Technology continued to dominate attraction of
investments
II. Exit and M & A values remained buoyant
III. PE investors unlocked $ 6.8 billion worth of value through exits
in 239 deals
IV. M & A activity was at an all time high- $ 61.4 billion
V. Angel & Seed Investors contributed 57% of PE investment
activity in 2016
VI. Big ticket deals surged in 2016 with 26 deals worth $ 6.6
Billion

10. Status in the PE ,VC areas-
continued
I. Average PE value slipped to $ 13.1M as compared to $ 14.5 in
2015
• ASSET MANAGER NAME NUMBER OF DEALS VALUE OF DEALS
($ mn)*
• Indian Angel Network Services Pvt. Ltd. 23 $1.78
• Blume Venture Advisors Pvt. Ltd. 11 $2.63
• Singapore Angel Network Pte Ltd. 10 $0.16
• Global Super Angels Forum 9 $1.44
• The Chennai Angels 9 $0.16

11. Status in the PE ,VC areas-
continued
• Private Equity Funds
• ASSET MANAGER NAME NUMBER OF DEALS
• International Finance Corp. 6 $161
• IDFC Alternatives Ltd. 5 $239
• TPG Capital Inc. 4 $218
• PremjiInvest 4 $26
• Fairfax India Holdings Corporation 4 $56

12. Sectors that attracted investors in
2016
• Education-Tech
• E commerce
• Saas
• Fintech
• Healthcare
• Foodtech
• Hyper local
• Consumer internet
• Some IPOs that were successful were that of Infibeam (450 crores);
Qucikheal (451 crores) oversubscribed by 11 times

13. Outlook for 2017
• M & A transactions expected to increase
• Exits will be IP driven rather than market share basis
• IP based product startups will get to benefit
• Other areas to benefit will be Artificial Intelligence, Machine
Learning, IoT, Disruptive technologies, Edtech, Fintech, logistics
etc
• Early stage funding will increase but later stage funding will be
done on an evaluated basis
• Investors are sitting on capital to be deployed

14. Outlook for 2017-continued
• Blume Ventures closed 2nd fund USD 60 M
• Nexus ventures closed 4th fund USD 450 M
• Accel Partners India closed 5th fund USD 450 M
• Sequoia Capital closed its 5th fund USD 920 M
• Though the predictions are that investment climate would pick
up as it has gone through the correction cycle still investors are
wary to risk investing in new ventures.

15. Entrepreneur’s DNA
• Concept, Creativity, Confidence
• Discipline
• Self Starter and Motivator
• Competitive
• Open minded
• Flexible and Adaptable
• Ability to lead
• People person
• Realistic
• Determination
• Honest and loyal
• Strong Ethics
• Risk lover
• Down to Earth
• Intuitive
• Forward looking
• Work on constructive strategies for their business

16. Investor’s DNA
• Proactive learners
• Planned Exit strategy
• Patience & Persistence
• Strong Emotional Control
• Well defined investment strategy
• Focused on their investments
• Use trend to their advantage
• Thrive on Risk
• Leverage the opportunity
• Learn from mistakes
• Listen to Professional advisors
• Strong financial background
• Killer shark instincts
• Passionate Mentors

17. Investor’s criteria before deciding
to invest
• Promoters and a great team
• Pedigree and background of promoters-have they been around
• 2 to 3 co-founders
• Track record
• Scalability
• Large market size
• Growth potential
• Monetization and business model
• Disruptive and technology enabled
• Salability

18. Funding Options
• I. Early Stage:
 Bootstrapping (Own funds)
 Loan or Equity from friends and family
Next Stage:
 Angel/ Seed Funding –normally from USD 50,000 ~ USD 2M
High net worth individuals
Startup funds
Accelarators
Incubators

19. Funding Options -continued
• Blume Ventures ; Unitus Seed fund; India Quotient ; Kae Capital ; Seed fund etc
• III Later Stage:
Venture Capital
Private Equity Funds – Strategic / Financial Investment
Bank loans
Convertible Debt (Debentures)
Government Institutions – SIDBI, NABAARD,
Private Sector like – IL&FS Trust Company Ltd
Overseas PE and VS funds
Angel Networks –Indian Angel Network etc
Startup Competitions, Crowdfunding (small ticket size for social enterprises)

20. Sacrifices to be made from the
Entrepreneur's side
• At the time of Angel/Seed funding 10 to 15 % stake to be given
away to investors depending on the value of investment and the
valuation arrived at
• Participation in the Board of Directors
• Participation in the operations of the organization
• To VCs and PEs higher equity stake may have to be given
anything above 25%
• Need to give the promised return on investment ranging from
22% to 24% along with the investment
• Achieve the promised results

21. How do you prepare yourself
• Evaluate your ideas on a prudent basis
• Gather your facts correctly
• Prepare an honest pitch
• Don’t exaggerate-no investor is going to fall for your hype
• Be realistic in your projections and modeling
• Have your elevator pitch ready along with your presentation
deck
• Remember no investor is ready to listen for more than 15 to 20
minutes, you are one among the many

22. How do you prepare yourself
• Take the help of experts and professionals
• Have a mentor to guide you
• Develop a good network in the funding world
• Be aware and knowledgeable about what is happening in the current
scenario
• Don’t repeat your mistakes
• Have a fresh approach
• Remember you are alone only if you want to be
• Back up your teams and your people
• Exercise patience
• Are you there in the happening place

23. How do you prepare yourself
• Do not over value your ideas just to attract larger investment
• Stories do not sell
• Build a proto type
• Show some performance
• Listen to your instincts and do not get carried away by others
suggestions
• Have the obsession to make your idea a grand success and work
towards it
• Last but not the least have your back up plans
• Do not follow the herd

24. Latest amendments by SEBI
Limit of Angel investors increased from 49 to 200 for participation in a
scheme
Angel investors can now invest in Startups within 5 years of
incorporation-earlier the period was restricted to 3 years
Minimum investment amount by any Angel Fund in any Venture Capital
is reduced to 25 lakh from 50 lakhs.
The lock in period for any investment made by an Angel Fund in
venture capital undertaking is reduced to 1 year from 3 years
Angel Funds are allowed to invest in overseas venture capital
undertakings upto 25% of their investible corpus in line with other
AIFs.

25. Tax incentives for 3 years for Startups provided certain criteria are
met
Please refer to startupindia.in for a host of incentives for startups
Nasscom has initiated the 10k startup plan
Get mentored regularly by experienced leaders
Government has set up 10,000 crore fund for startups
SME and MSME have a lot of support from the government –
interest rate on loans, purchasing preferences, winding up etc
Educate yourself what is there in it for you
Other info

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27. Thank you for the opportunity and a patient hearing.
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Dear Students