Ideas|Products|Startups|VCs

I have failed to understand why startup guys and entrepreneur think its pretty easy to raise venture capital, may be they get to read lot of investing news at TC.

Lot of people have approached me asking to help them in raising venture capital and most of those people are working in big MNC software companies. They have a simple idea and would want VC backing in developing their product. Their dreams are shattered when i bluntly tell them it won’t happen, you need to pump in your money during the development.

There is a clear misconception in the market about the funds and type of funds, lets try to make it simple by defining different types of funding -

a) Seed Funding - Seed funding is the very first investment an entrepreneur receives and mostly its raised from family and friends (F&F) and also sometimes referred as FFF - friends, family and fools. Generally seed fund ranges from $10-25k.

F&F is a risky venture for those with the money because the project that they are funding may not be more than just functional specs or drawings, not sure of product can be out in the market.

b) Angel Investors - Angel Investors are individuals who invest their own personal funds in an idea or a company that they feel strongly about. Most of the angels are seasoned entrepreneurs, company executives, HNI’s. Generally the fund angle investors lend is in the range of $100-$500k.

c) Venture Capital - In simple words they are biggest money lenders for startups and growth stage companies. Venture Capitalists are generally small teams of investors with sufficient backgrounds in the fields in which they are investing. New ventures will seek to raise funds in rounds of funding called “series.” Often times when researching companies you will see that Company X received $4M in Series A funding and $5M in Series B funding. Generally, the more series of investments, the more promise VCs, Angels or other investors see in the company. Generally they invest above $1M.

-Hitesh, vcBytes.com

Apnacomplex is a web-based software solution for Associations, Owners/Residents,Property Developers, to efficiently manage Gated Communities such as Apartment Complexes & Residential Layouts.

ApnaComplex is a bangalore based startup which provides a host of tools/features that facilitiates the management of entire life cycle of a residential property - right from launch of property by the Property Developer till ongoing maintenance of the property by the Owner/Residents association.

It enables associations to provide online services such as raising and tracking complaints, knowing outstanding dues and payments made, instant receipt issuance, free advertisements, online notice boards and receive notifications through sms and emails. .

ApnaComplex has adopted freemium model, one has to pay Rs. 499/- per month to access all the features and unlimited access to apnacomplex and have free plan for upcoming complex and association.

-Hitesh, vcBytes.com

Feeling bored at work and no mood to indulge in facebook, twitter etc here is a good news for you, 123timepass has been launched to kill your boredom. 123timepass is a bangalore based startup founded by ex Yahoo and MIcrosoft managers ( they would like to remain anonymous for sometime)

123timepass is meant for users who would like to kill their time diligently. 123timepass has features like Greetings, Games, Chat, SMS etc. Greetings are all flash based and are of very good quality and best part is they are completely free. You can find greetings of all general categories like Birthday, love, Best Wishes but additionally they have event based greetings like Guru Purnima etc. which i have  never come across.

Free SMS is another feature which will draw users, workflow around sms is well made. User can schedule the sms, can send sms to a group also.

Chat is quite unique at 123timepaas, its a 1-1 chat with another user logged in the system. No chat rooms, cant select the user you can chat. Its totally a random chat with a stranger picked by the system, must admit quite a thrilling experience

Even games at 123timepass are flash based, quite engaging ones Pirate Shoot out is one of my favorite game. Games are categorized mainly into - Adventure, Board games, Sports, Shooting, Timeout.

I strongly believe intention of launching 123timepass is to give a tough competition to 123greetings.com and may be inspired by the IPO of later. 123timepass generates revenue from Ads.

Do indulge in 123timepass when you are bored and recharge yourself.

-Hitesh, vcBytes.com

SKS Microfinance which gives small loans to poor borrowers, founded by Vikram Akula is coming out with Initial Public Offering (IPO) of 16.8m shares with a fixed price band at 850-985 rupees/share. Thus SKS microfinance is all set to raise $353M from the IPO process.

SKS Microfinance is India’s biggest microfinance institution with a loan book of Rs. 4300 thousand Crores is well funded by  Sequoia Capital, Kismet Capital, Unitus, venture capitalist Vinod Khosla and Catamaran.

SKS Microfinance plans to use the share sale proceeds to augment its capital base to meet future capital requirements that is likely to be fuelled by growth in the business, the company said in its offering prospectus.

Vikram Akula, the founder and the chairperson, who owns 3.8 per cent in the company as employee stock options, said he had sold 25 per cent of his stake to a private equity firm.

Sequoia is going to make around 15-18x returns from its investments and Catamaran has also hit the jackpot with their first investee company going public.

-Hitesh, vcBytes.com

Immense mind boggling  activity in the social buying segment taking place in India. Groupon, the American giant is valued close to a billion dollars. A couple of smaller Indian players have sold out. A few have grown bigger and better. Their margins have grown stronger, touching the 30’s, than what I earlier predicted. Funding has come to a few and others are on the negotiating table. This sector is up for a lot of action in the next 6 months.

In what could be a defining milestone in Indian entrepreneurial development domain - Grow VC, the ‘Virtual Silicon Valley’ software platform and world’s first-ever ‘Crowd-Funding’ and interaction platform for startups announced the launch of a local funding network in India, in association with Springboard Ventures – an ensemble of experts dedicated to promoting start-ups. Based around the same model as the existing global funding network Grow VC offers, the Indian local funding network will be the first of many “local” networks the company looks to launch within its wider global network in the coming months. Grow VC’s community platform for entrepreneurs who are looking to grow their early stage startups through the “crowd-funding” has already gathered considerable interest with hundreds of new sign-ups each month and active participation of investors, startup service providers, advisors and entrepreneurs within the online community.

Grow VC works to create a “Virtual Silicon Valley” community and develop new models for more efficient early phase funding. Grow VC just announced the Virtual VC Co-investment Fund to enable VC’s to participate in Grow VC’s seed investments. IndiaCo a leading investment management firm from India is the first partner to come aboard the fund and has committed to invest $5 million to the virtual fund will pave the way for other VC’s to join the fund. The local network in India will be spearheaded by Springboard Ventures creating a tailored network suited to Indian needs and culture.

The launch of Grow VC India will pave the way for many ‘firsts’ in the innovative start-ups domain within the country as pointed out by Satish Kataria - Managing Director at Springboard Ventures. “It would be the first ever single platform to bring together the various entities which revolve around the creation and growth of start-ups while allowing them all to interact and work together with each-other. Besides uniting angel investors and entrepreneurs, this platform offers a first-time opportunity to various experts and consultancies to now come forward and offer their services to start-up community through innovations such as ‘Service Investments’. “ says Satish. This will essentially help enhance the ‘funnel’ or ‘bandwidth’ of support to Indian entrepreneurs bringing into the system not just funders, but experts, advisors and other resources which can help create and grow successful start-ups.

Indeed, as a significant start towards this journey of bringing all key Indian entities together, Indian Angel Network – India’s first and largest network of Angel Investors – having more than 125 members throughout the country, have agreed to associate with Grow VC India – in order to further strengthen and boost Indian start-up eco-system.

“We see that India is very important market for Grow VC, because it has a strong entrepreneurial culture and also nowadays, more investors that are interested in investing in local but also international companies”, says Jouko Ahvenainen Founder & Chairman at Grow VC. “India also has a lot of experience in crowd-funding and other innovative finance models. We have already now seen a lot of Indian users also in our global service.” he adds. Local networks will play an important role in Grow VC’s strategy to build a strong global start-up funding community and the company aims to offer options and freedom to its users allowing them to operate on a local level or operate on a global level too if they choose to.

Eyeing a big slice of the fastest growing mobile handset market in the world, multinational IT giant Dell plans to bring its range of smartphones to India.

“India is one of the key markets for Dell consumers and as we work on the plans to bring the smart phones to this market, we continue to explore various go-to-market options,” Dell India General Manager (Consumer) Mahesh Bhalla said.

He, however, did not disclose specific details on the exact date for launch of Dell’s mobile handsets or the models to be made available in the country.

In an advertisement in a local newspaper, Dell today said it is “making a move into mobile phones” and has sought distributors with “retail reach”.

Dell, which is the world’s third largest PC maker, will be following its global peer Apple in introducing its handsets in the Indian market, which is dominated by low-cost handsets.

According to telecom regulator TRAI, India had about 617.53 million mobile-phone users by May-end, second only to China, while an estimate by research firm IDC shows that 101.54 million handsets were sold in the Indian market during the 2009 calendar year.

Dell had announced its entry into the growing smartphone category globally late last year.

Smartphones are mobile devices with PC-like functionality and other advanced features. Smartphone players in India include Apple, HTC, Research in Motion (with BlackBerry), while other handset makers like Nokia, Samsung and LG have also added an array of smartphones to their portfolio to tap the growth in this segment.

After covering few Indian group discount sites and their related news i have successfully insulated myself from buying any of the coupon since i am not crazy about discounted items. I buy things, if they have discount well and good but i never buy items just they carry discount.

I bought a coupon (paid Rs. 150 for Rs. 300 bill) for a chinese restaurant which is located close to my office from a bangalore based grouping site. I am a regular customer of this restaurant and  i quite like their food. That’s the prime driving factor for me to go for the coupon.

The ordeal starts from the moment i proudly inform the manager that i have a coupon and would like to avail the offer. He gave me a perplexed look since i am his regular customer. He took back the menu from the table and brought a laminated paper which was supposed to be menu for coupon users.

I was surprised seeing laminated paper menu and told him to get the original menu and give a 50% discount on 300/- bill since i wasn’t interested in this menu.  He declined and said it doesn’t work that way and you will get food listed in the laminated paper menu. I thought let me try and find out the reality

Demerits of Group Discount Coupons -

• Coupon users have customized menu and food is very different.
• Be ready to eat a very mediocre food.
• Don’t get good treatment and service as if restaurant is doing some charity by offering free food.
• Discount is valid on per user and never on bill, Pay Rs.150 for Rs.300 bill discount -50% is meaning less. Its a ploy to catch attention. My bill comes generally Rs. 130-140 in this chinese restaurant and i come out with satisfied feeling but after paying Rs.150 i was feeling cheated and served with ordinary food

Tata Communications, a leading provider of the new world of communications, and Google India today announce plans to combine their global resources to offer a portfolio of web-based, collaborative business connectivity tools that provide email, instant messaging, calendar functionality, video and office presentation tools for business’ across India.

The portfolio of business tools, powered by Google Apps™, is a significant move by both parties to bring value-added applications to Indian enterprises while offering localized pricing, billing and support.

The service is simple to subscribe, easy to use and streamlines the complexities of IT while allowing businesses to pay for only what they need. Indian organizations, particularly the emerging enterprises, will now have expanded access to Tata Communications’ cloud-based software services, helping them migrate their IT requirements to a pay-as-you-use business model. Building on Tata Communications’ leadership position as a SaaS service provider, the portfolio will help organizations reduce IT cost and complexity and be more productive. It will be particularly beneficial to companies with fast growing teams, offices spread across the country, or staff who travel frequently.

-Hitesh, vcBytes.com

Komli media an online Indian ad network has raised $6M from existing investors - Nexus Venture Partners, Helion Venture partners and DFJ.   The funding will be used to accelerate the company’s overall growth including its expansion across Asia Pacific.

In 2007 Komli has raised $7m from the above mentioned VC firms.

The funding will aid the company to continue investments in the following core businesses:

• Premium Brand Solutions - Komli Media will continue to build on its already strong set of exclusive high quality publisher relationships across the region.  The company will also invest in bringing the next generation of video, mobile and brand measurement solutions to the market

• Performance Marketing - The company will invest further in its core performance optimization platform to help improve ROI for marketers and increase yields for publishers

• Audience Measurement - The company will continue to increase its panel size and bring more audience measurement solutions that will deliver significantly greater data and insights to marketers and agencies

“With India’s Internet user base growing over 50 million and increasing broadband penetration, we see an acceleration of growth in the digital advertising market. The largest brand advertisers in India are now demanding a much higher share of digital and social media in their overall marketing plans. We will continue to make India a top priority of our growth plans”, said Prashant Mehta, Chief Operating Officer of Komli Media.

Komli last month acquired Australia based PostClick a leading site representation firm, covered here.

-Hitesh, vcBytes.com

Inmobi has raised $8m venture capital from existing VCs - KPCB and Sherpalo Ventures. Inmobi is a bangalore based mobile Ad network which serves nearly 17billion ad impression per month globally.

InMobi offers advertisers, developers, and publishers a dependable global mobile advertising platform other InMobi has invested in building a highly scalable, mobile customer discovery ad network leveraging its unique analytics engine AdROItTM to optimize ad serving in real time.

Interestingly there was a strong buzz in the market that Yahoo and Apple had shown interest in acquiring inmobi but it didnt materialize.

Inmobi was founded in 2007 by Naveen Tiwari, Amit Gupta and Abhay Singhal

Last year they had rebranded itself to inmobi from mKhoj, check out here.

-Hitesh, vcBytes.com

Xelf, a kolkotta based startup is an online book rental library where in user can queue up the books and it will be delivered at user’s doorstep and both ways delivery is completley free. Xelf users can keep the book as long as they wish and without incurring any late fees.

Xelf is founded by RIdhi Agarwal an IIMK alumnus and Amit Agarwal an SP Jain alumnus, Xelf which started as pilot project initially has evolved into a promising company which caters to above 20k users in kolkotta.

Xelf aims to be like Bookrenter of India and plans to expand in 6-7 indian metros within next 2 years. Both being avid readers always wanted to create a hassle free library for book lovers.

Xelf USP is impeccable service quality with strict turn around time and easy to use service coupled with simple pricing options.

-Hitesh, vcBytes.com

MagicRooms,a Bangalore based hotel Global Distribution System, has received a Rs 7 crore investment from Nexus Venture Partners. The MagicRooms platform allows you to seamlessly integrate your hotel’s property management system (PMS) with travel agents, travel portals and large corporate customers.

Magicrooms started a year ago is founded by Niranjan Gupta, With his finger always on the pulse of the industry, Niranjan has consistently moved with the times, anticipating trends far ahead of his peers. It was this vision that saw him setting up flightraja.com(now VIA), India’s first online airline ticketing site. Flightraja has since evolved into India’s leading B2B online airline ticketing site.

MagicRooms is an internet-enabled global distribution system for hotel rooms. By integrating with the hotel’s PMS, it allows seamless real-time distribution of room inventory and rates in seconds. End-users include travel portals and websites, travel agents, and corporate houses.

MakemyTrip is also one of their clients.

-Hitesh, vcBytes.com

Fujitsu Ltd, Japan’s biggest IT services firm, said on Tuesday that it would allow software developers to run their programs on its hardware free of charge so that they can examine performance.

Fujitsu hopes the testing will boost sales of its computer servers, aiming to double such sales to about $114 million by the financial year starting next April.

The testing would enable software makers to better promote their products to prospective clients such as manufacturers, a Fujitsu spokeswoman said.

Fujitsu has set up a test center for this programme.

-Hitesh, vcBytes.com

Let me tell you honestly none of the VC will fund your startup based on the business plan only, having said that its a important driving component for raising Venture capital.

Lets look at the must have components you should include while preparing the deck:-

Mission statement - You need to define clearly and very crisply about your company and what you plan to do.

Team - I sincerely believe Team is one critical component in raising Venture Capital, VC look at the business plan seriously if team is phenomenally good. Its good to have a business development guy in your team, VCs love to find them in founding team.

Pain Point or Problem - Define the problem statement clearly and how your business proposition can address those pain points,  VCs are generally not interested in looking at another Me 2 kind of companies.

Solution - Clearly define the solution which will address the pain point or gap or solve the problem. Make sure you have proper workflow included in the presentation, subsequently you can also walk through the product if its ready.

Market Size - Market Size is one component which really fascinates VCs. Detail out the market size, if better you can show show market size as per geography and explain clearly how many people is experiencing the problem and how your product can solve the problem.

Business model - You need to understand clearly you are here to make money and not doing any charity work, have 1-2 strong means of revenue generating means and can also list out possibilities of generating revenue in near future.

How much to raise - You should have crystal clarity on how much fund you need and why you need, VC will definitely grill you on this, you should keep a buffer to anticipate any unexpected event which can dent your business.

Marketing - Have marketing plan in place, how you going to take your product in the market

-Hitesh, vcBytes.com