Any business idea’s ability to succeed depends on how well it is executed. If you fail, you lose everything!
Aspiring founders with a brilliant concept start the company with seed money. Advancing from the ideation stage through product development and future expansion.
If the entrepreneur is firmly convinced that the product is market-fit and the client becomes an investor in the business through the sale of the product or services called as Bootstrapped startups — (percentage under 1%)
However, in today’s fiercely competitive market, it is difficult to survive for a longer period before needing money for expansion and development. VC enters the scene at this point of time.
Moreover, the path to success for a startup begins with a solution to address a problem statement, moves up to growth and exit. Who is involved in this journey to successful startups?
- Team
- Capital ( investors / self )
- Product/services
- Customers
One of the key enablers is venture capital (VC), who invested in the company, believed in the founders’ vision and the product/services, and provided the capital for development and growth.
Lets understand — the economic case is based on three pillars for the VC fund:
- The intellectual and social resources of VC fund allow them to identify and assess a wide range of investment prospects.
- They make investments in a small number of well-chosen companies after carefully weighing the risks and potential returns of each.
- They have the organizational and human capability to control risks in their investments by engaging actively with those companies and provide the assistance wherever required
The third of the aforementioned factors is very important. The entrepreneur who raises VC capital may be a subject matter expert in the industry or technology of his choice, but as he expands the business, he requires a matured sounding board, direction ( is it correctly headed ), support, and guidance and that is the crucial value that the management of a VC fund is expected to contribute.
As a result, VCs invest in startups to help them grow from one to ten and attract follow-on investors.
Besides providing funding, Auxano also maintains a regular communication schedule with the portfolio companies to engage through calls every month and quarterly basis to discuss company updates and financial health checks. In addition to that, it is crucial to establish a relationship with the founders in order to talk about the company and to show concern for their personal health in the journey, where ups and downs are a constant part of the business. This will give the team much-needed support and encourage them to take a leap of faith.
As often said “The Journey is much more beautiful than the final destination”.
Approach –
To conclude with the prayer from the RigVeda, many of us have developed a love for this –
“Saṃgacchadhwaṃ Saṃvadadhwaṃ Saṃ Vo Manaṃsi Janatam
Deva Bhagaṃ Yatha Purve Sanjanana Upasate”
Which translated as; — “Everybody is invited to come together, speak aloud, and think as one”
Running in circles with nowhere to go. The key to managing a show is to control risk and return while concentrating on the center. The way the VC operates as a facilitator to attract investors, combine the funds, finance the expansion of the business, and create wealth for investors.
The common thread at the heart of the Auxano is growth — growth for everyone as a whole, including growth for companies, investors, and individuals.
Author:
Rakesh Rana
