Start-up Investing – Baby steps for a newbie investor – III

This is the 3rd part of the series on Start -up Investing – a multi-part series on how a newbie investor can be a part of the Start-up Investing eco-system.

Start-up Investing – Baby steps for a newbie investor – III

This is the 3rd part of the series on Start -up Investing – a multi-part series on how a newbie investor can be a part of the Start-up Investing eco-system

Do find the Ist part of the series here & the IInd part here .

In this part, let’s look at as to what happens post the investment into a start-up by a CAT I Angel VC fund, especially at Auxano.

The action post investment happens and begins even before the investment happens.

We sensitise the company on the requirements of data, on a monthly / quarterly basis, as the case maybe.

What is this data we seek – MIS of the company, which depicts the health of the company. Raising the funds and deploying the funds is an important aspect. The eco-system today is very fluid. The pandemic and the war, was never in the playbook. But then it happened.

MIS also enables the founders to keep track of the daily activities in the business and also know the financial health of the company.

It also gives information on the state of affairs of the company.

Also, even if the founders do not have an inclination towards the financials, they get in sync and are able to approach the next round of funding and information sharing with greater confidence.

The quarterly updates also enables to understand the progress / state of affairs of the entity on a larger time period and with benchmarks and budget.

Key Performance Indicators (KPI’s) are also an integral part of the same. There are common KPI’s and then there are sector / company specific KPI’s

All of these for a VC is not a ‘tick mark ‘exercise. This should add value to the entity. Also, the entity should not take it as a ‘tick mark ‘exercise.

A journey begins with a small step and the discipline in this, will make the business and the founder more in sync online with financial discipline.

Is it all about data and MIS?

What about team dynamics , strategy, sounding board for ideas, sharing insights , connecting with business opportunities – are also a few of the areas where Auxano  and the portfolio companies work in sync .

Can a startup fail , even after all of this ?

Let’s address that in the next part of the series.

Author(s) :

Brijesh Damodaran