The document provides an overview of the valuation journey of Sparsha Learning Technologies. It discusses key challenges in valuation including pricing challenges and developing an appropriate business model. It also provides examples of valuation amounts for other Indian startups at different stages, ranging from $10-15 million for an incubation-stage company to over $1 billion for more mature companies. The document emphasizes the importance of market opportunity, team strength, profit potential, competitive advantages, and barriers to entry in determining a company's valuation.

1. The
Valuation
Game
-­‐-­‐Journey
of
Sparsha
Learning
Technologies
Prof
Shivananda
R
Koteshwar
Director,
The
Amaatra
Academy
Mobile:
98457
22117
/
Facebook:
shivoo.koteshwar
www.docircuits.com
Lounge 47 (www.lounge47.in)
Feb 2014

2.  Sparsha
valuation
with
time
and
“Fair”
use
of
money
 Pricing
Challenges
 Business
Model

3. Kumar Rangarajan
Satyam Kandula
$10m-$15m
Sachin Bansal & Binny Bansal
$521m, $1.6B
Phanindra Sama
$135m
Naveen Tiwari
$215m, $1B

5. Incuba'on
Research
Center
at
CORI

6. ACTIVITY
BASED
TEACHING,
ACTIVITY
BASED
LEARNING
AND
VIRTUAL
LAB
SOLUTIONS
ECE
• I
YR
:
Basic
Electronics
• II
YR:
Analog
Circuits,
Digital
EE
• I
YR:
Basic
Electrical
• II
YR:
Signals
and
Systems,
Power
Electronics
CS
• I
YR:
Data
Structures,
Programmi
ng
• II
YR:
Algorithms,
Networks

7. 







You
achieve
something
significant
when
you
do
something
insignificant
(as
seen
by
others)
Its
not
just
about
taking
risks.
Its
about
managing
risks.
Its
about
minimizing
lot
of
smaller
risks
within
that
bigger
risk
Data
shows
it
takes
5-­‐7years
for
an
entrepreneur
to
make
a
mark
Breaking
Inertia
–
Comfortable
job
to
entrepreneur
vs.
Comfortable
job
to
student
to
entrepreneur
Luck
plays
a
significant
role
in
success.
With
right
attitude,
you
can
learn
to
be
lucky!
Market
is
not
just
when
you
have
a
willing
buyer
but
also
an
able
buyer
is
required
First
make
it
work
,
then
make
it
better
Costs
are
like
fingernails
..cut
them
constantly

9. Don’t Give up

10. Challenges
in
each
step
of
Entrepreneurship..
① Identifying
and
using
the
opportunities
that
exist
in
the
market
 Market
Research,
Interviews,
Test
Bed
② Converting
the
ideas
into
action
 Team
formation,
Money,
Full
Time
vs.
Part
Time
③ Undertaking
promotional
activities
to
launch
an
enterprise
 Logo,
Registration,
Location,
Structure,
Protocol,
Advisory
Members,
Share
Holding
④
Striving
for
excellence
in
his/her
field
of
work
 Quality,
Product
Completeness,
Documentation,
Packaging,
Pricing,
Selling
⑤
Bearing
the
risk
and
uncertainties
involved
 Money,
Team,
Partners,
Distributors,
Multiple
pull
from
different
directions
⑥
Harmonizing
 How,
When
,
Who
?

12. NOVEL
CUSTOMER
CENTRICITY
INNOVATE
PURPOSE

13. MESSAGING
PACKAGING
SIEZING
THE
OPPORTUNITY

14. 
Slide1







Define
the
market
size
both
in
units
and
value
terms
where
ever
applicable
If
it
is
new
concept
then
work
out
the
estimated
market



Define
the
current
Customer
pain
areas
and
how
your
business
proposition
will
help
them



Names
of
the
members
of
the
core
team
Name
the
brain
child
Name
the
support
members
of
the
Core
Team
with
their
functionality


Company
Name
In
one
sentence
tell
how
your
business
proposition
is
useful
to
mankind
Define
the
company
Value
proposition
If
you
have
some
customer
case
studies
you
can
exhibit
here


Describe
the
Product
(Functionality,
features,
architecture,
what
core
IP
do
you
have)
Show
your
Product
Development
Roadmap
Slide2
-­‐
The
Core
Team
Slide3
–
Customer
Perspectives
Slide
4
–
Market
Size
Slide
5
–
Company’s
Value
Proposition
Slide
6
–
All
about
the
product

15. 
Slide7
–
Business
Model






Detail
in
brief
on
the
completion
with
the
names
of
the
key
players
and
their
brands








Sales
and
Distribution
model
Customer/Pipeline
list


Revenue
Model
Pricing
Financials
during
the
Incubation
Period
Period
of
incubation
=
?
Months
Revenues
during
incubation
Costs
during
incubation
Net
Burn
Sources
of
Funds-­‐
own=?
And
Borrowed
=?
(Give
Details)
If
it
is
new
concept
then
work
out
the
estimated
market

Give
your
reasons
for
choosing
the
XXX
for
incubating
your
business
Slide8
-­‐
Business
Model
Slide9
-­‐
Competition
Slide10
-­‐Financials
Slide
11
–
Why
incubate
@
XXX

16. 
MOTEPPCABE
 MO:
Market
Opportunity
 TE:
Team
 PP:
Profit
Potential
 CA:
Comparative
Advantage
 BE:
Barriers
to
Entry

17. LIMITED
DICTION






Investment
Revenue
Expense
Profit
Loss
Business
Plan
UPGRADE
REQUIRED










Preference
Shares
and
Equity
Shares
Convertible
Shares
Performance
Milestone
Tranche
Cumulative
compulsory
convertible
Preferential
share
Preferential
Dividend
Cumulative
coupon
rate
Pre
Money
Valuation
Post
Money
Valuation
Voting
Power









IPO
Observer,
Promoter’s
Director,
Investor’s
Director
Termsheet
Due
Diligence
Liquidation,
Dissolution
and
winding
up
Deemed
Liquidation
(Merger)
Conversion
Form
Tag
Along
Rights
Drag
Along
Rights

18. 
Goal:
To
determine
whether
the
business
case
is
‘investment
grade’








Gathering
and
detailed
analysis
of
documentation
Business
plan
and
related
documentation
Additional
requests
for
information
from
management
Market
analysis
(top
down
and
bottom
up)
Search
for
comparable
businesses
and
business
plans
All
market
and
industry
information
readily
available
on
internet
Consultations
with
industry
contacts/technical
experts
In
person
visits
to
confirm
business
case
with
 Actual
or
potential
customers
 Actual
or
potential
suppliers
or
other
financing
sources

Decision
about
next
steps
 Allocation
of
tasks,
establish
project
team
structure
 Fix
due
diligence/investment
timeline
 Basic
term
sheet
outline
Basic investment decision is made at this level.

19. 
Current
Business
 To
confirm
the
current
state
of
the
company
 To
determine
and
manage
risks
to
the
current
value
of
the
Company
▪ Existing
▪ Contingent

Future
Business:
 To
confirm
the
business
plan
in
detail
 To
determine
and
manage
risks
to
the
business
plan
in
detail
▪ Market
(External)
▪ Organizational
(Internal)

Questions
to
Answer:
 Am
I
buying
what
I
think
I
am
buying?
 Is
it
worth
as
much
as
I
believe?
 What
risks
exist
to
the
my
acquisition
and
its
value,
and
can
these
be
managed?
 Is
there
any
reason
not
to
do
this
deal?

20. 
If
the
chemistry
is
not
right,
arithmetic
will
never
work
 TEAM

Are
you
producing
a
vitamin
or
a
headache
tablet
 PROBLEM
you
are
solving
(Nature,
big/small,
Market
size)

Competition
–
Who
else
is
doing?
How
are
you
better?

Entry
Barrier

Value
is
created
in
market
and
not
in
xls
sheet
 Financing
Risk
:
Capital
Intensity
-­‐Capital
required
for
company
to
reach
infliction
point
(Breakeven
or
sustainable
growth
or
non
linear
growth)

Regulation

21. 





Stable
and
a
Proud
Team
Amazing
Product
Great
Board
of
Advisors
Closed
the
first
round
of
seed
funding
with
Blume
and
Tempus
Investment
fund
Shortlisted
as
the
Top20
upcoming
startups
in
India
by
CNBC-­‐TechSparks.
Came
6th

On
facebook-­‐
https://www.facebook.com/iLearnMore
and
On
Twitter
-­‐
@idoilearn

22.  Marketing
 Product
Development
 Team
expansion
 Application
Engineering
Founder director’s were still working without salary!

26. Hygiene Factor: Ease of Use

27. http:/techtroniks.docircuits.com

28. 

Developed
and
launched
HTML5
version
app
of
DoCircuits
for
Windows
8.1
for
Mobile
devices
VSKILLS
:
Certified
Electronics
Design
Associate
launched
(
http://www.vskills.in/certification/Certified-­‐Electronics-­‐Design-­‐
Associate
)






2X
growth
in
online
sales
outside
India
Very
limited
B2B
engagement
and
conversion.
-­‐
All
B2B
engagements
now
done
by
distributors
More
engagement
over
Facebook
(
3X+
growth
since
last
quarter
)
Crowdfuding
on
Indiegogo
not
successful,
cannot
go
ahead
with
course
design
as
funding
goals
have
not
met.
Will
be
returning
the
money
to
individual
contributors
Major
Japanese
distributor
about
to
be
signed,
agreement
in
review
Companies
looking
at
acquiring
us

29. 
A
Nasscom
study
noticed
that
since
1990,
India
has
seen
the
emergence
of
3,402
product
companies
 Of
the
total
3,402
product
companies,
approximately
51
percent
are
based
in
Bangalore
and
NCR
region.
 More
than
55
per
cent
of
the
startup
founders
have
less
than
10
years
of
experience
from
2009
to
2012.

The
Indian
Angel
Network,
for
instance,
evaluated
3,400
pitches
in
2012,
shortlisted
82,
and
ended
up
funding
13.
 The
year
before,
it
had
received
just
2,000
pitches

In
2013,
there
were
100
merger
and
acquisition
deals
across
the
India's
information
technology
industry
 Of
this,
31
whose
value
was
announced
were
worth
$1,906
million
(Rs
11,807
crore),
according
to
research
firm
Venture
Intelligence

30. You don’t sell through price. You sell the price

31. 







Consider
the
psychology
of
prices
and
not
simply
the
economics
Consumer
perception
of
value
is
important
Customers
use
price
less
when
they
can
judge
quality
of
a
product.
Price
becomes
an
important
quality
signal
when
customers
can’t
judge
quality;
price
is
used
to
say
something
about
a
product.
Price
often
depends
on
circumstances
–
You
always
pay
more
to
fly
when
you
want
to
fly
Consumers
are
often
prepared
to
pay
more
if
they
expect
to
get
excellent
service
Adding
value
doesn’t
mean
dropping
price
Price
will
be
compared
-­‐
Other
price
offers,
Prices
previously
paid,
Going
rate,
Alternative
product
price,
Alternative
substitute
price

32. SELECT PRICING OBJECTIVE
Profit Oriented
Sales Oriented
Status Quo
Target return /
Maximize Profit
Sales Volume /
Market Share
Stabilize Price /
Competition
SELECT BASE PRICE DETECTION METHOD
Price based on
both demand
and costs
Cost-plus
pricing
Price set in
relation to
market alone
DESIGN APPROPRIATE STRATEGIES
• Price vs. nonprice
competition
• Skimming vs.
penetration
• Discounts and
allowances
• Freight payments
• One price vs.
flexible price
• Psychological
pricing
• Leader pricing
• Everyday low vs.
high-low pricing
• Resale price
maintenance

33. Internal reasons – Marketing objective (survival, market share,
profit maximization, quality leadership), cost, etc
External reasons - Nature of the market, demand, Competition,
Environmental factors (economy, resellers, government)

34. Loss leader

35. Amazon
Google
Apple
UPS
Sony
Location
Packaging
Advertising
Branding
Service
Tata, reliance, airtel, SBI, Infosys
5c 5s
Vertical product
variation
Sponsorship - £25m-a-year
Product
Modifications
Product mix

36. Optional (Accessories)
Bundling
Captive
By Product

37. Penetration
Skimming
SkimmingPenetration
recover high R&D costs
Price Lining
Move inventory, stimulate D, extend
product life
Psychological
Promotional

38. Prof
Shivananda
R
Koteshwar
Director,
The
Amaatra
Academy
shivoo@pes.edu
/
Facebook:
shivoo.koteshwar
BLOG:
http://shivookoteshwar.wordpress.com
SLIDESHARE:
www.slideshare.net/shivoo.koteshwar

39. A business model describes the rationale of
how an organization creates, delivers, and
captures value. It’s the story that explains how
an enterprise works
Canvas is a shared language for describing,
visualizing, assessing, and changing business
models
References from the book: Business Model Generation
ISBN: 978-0470-87641-1

40.  FROM
Product/Market
Segment
Oriented
Approach
▪ Product
and/or
service
at
its
center
that
focuses
on
a
customer’s
job-­‐to-­‐be-­‐done
–
Value
Proposition
 TO
a
Holistic
Business
Model
Approach
to
achieve
long
term
competitive
advantage

41. Customer Relationship
Customer
Segmentation
Value
Proposition
Channels

42. Key Activities
Key Partners
Key Resources
Cost Structure
Revenue

43. Key Activities
Customer Relationship
Key Partners
Channels
Value
Proposition
Key Resources
Cost Structure
Customer
Segmentation
Revenue

47. Prof
Shivananda
R
Koteshwar
Director,
The
Amaatra
Academy
shivoo.koteshwar@gmail.com/
Facebook:
shivoo.koteshwar
BLOG:
http://shivookoteshwar.wordpress.com
SLIDESHARE:
www.slideshare.net/shivoo.koteshwar