Getting access to capital may not increase the chance of a startup’s success as much as getting the right mentorship and guidance would!
In today’s blog we get down to the very basics of the startup ecosystem that are seemingly overlooked at times, even by well accomplished individuals.
Startups applying to various sets of Investors.
The total number of startups registered in India grew from 471 (Year 2016) to 72,993 (June 30, 2022). Source: TOI
However, there still are many good startups across various stages that do not get the required capital or mentorship while there are funds who have the capital to deploy but choose not to!!
(Figure 1: Authors own ideation)
Why is that? How can we ensure to work in a more cohesive manner in an ecosystem?
The answer lies somewhere between:
(Figure 2: Author’s own ideation)
When I say value adding investor it means that they have a qualitative approach towards the startups and not mere transactional oriented. They can be angel investors, VC’s, PE’s etc. For this blog let us take VC as an example.
But still the basic underlying thought-process I have observed is the need for startups’ assurance for capital, as it attains its much needed throttle!
Well, if it were true then VC’s would act merely as transactional oriented investors whose approach would be just to see their Y-O-Y returns.
So how exactly is applying to a VC different from applying elsewhere when the same instrument called “capital” is being provided!?
As per figure 2 the point of guidance is where I want you to focus upon!
Let’s call it Investor – Startup fit.
Guidance is given on the most common revenue defining metrics. Let’s look at those metrics.
(Figure 3: Author’s own Ideation)
Let us look at the guidance aspect of these metrics:
(Figure 4: Authors own ideation)
VC’s are experts at navigating startups from one level to the next on the basis of many factors such as funds, team expertise, background, forecasted trends towards the market, Industry connections & learnings from previous investments.
Why would VC want to help along with providing capital?
Many of the VC’s are operator turned coaches who share & relive their entrepreneurial journey by investing their time in helping startups scale and On the other hand, a few non operators also become VC’s, due to certain traits of an entrepreneurial bend of mind.
We hope that the points mentioned above, if taken into consideration, will help ensure that pitch decks do not mindlessly circulate in the market & it reaches the right set of investors.
On the similar front we at Auxano look forth with a vision of entrepreneurship, innovation and growth. We believe in empowering founders through guided direction, streamlining of processes fueled by a shared dream to scale to new heights.
Author:
Dr. Archit Shah
