FAQs

1) You don’t know whether your startup is currently qualified or not and at what stage or achievements, it will qualify for fundraising.

2) You have connections with certain investors / funds but fear to prevent your startup from rejection from those investors / funds on below grounds:
– your documents including Pitch Deck, Business Plan, Business Projections, Valuation, Story Telling etc. are improper
– lack of prior experience to approach and impress the investors / funds towards positive inclination to your startup

3) You can appoint an i-banker but there are below issues with an i-banker too:
– a good i-banker take an engagement signing fee plus a monthly retaining fee.
– a good i-banker need exclusivity but then the i-banker will charge it’s routine success fee for approaching to your connections as well.

Following are the respective pointwise solutions for aforesaid problems:

1) We neither execute your fundraising mandate nor recommend you to do it unless you get your startup checked from us with Check My StartUP”. Most of the startups qualify for FREE for this service by just answering 5 questions in 5 minutes. Click here to Try Now. With Check My StartUP, you can not only get a traction on whether your startup deserves for raising funds but also a comfort on how much to raise? and on what dilution? and what terms?

2) In Check My StartUP, we also comment on whatsoever is missing or improper in any of your underlying documents. You can get it rectified yourself or avail our service to get it done. Further we recommend you to appoint us to approach even to those investor / funds who are in your connections. Dont’t worry, we have a highly discounted, special pricing package for investors / funds in your connections, which is acceptable to most of the founders.

3) We don’t charge any engagement signing fee or a monthly retaining fee. Instead we charge a nominal fee on per pitch and per meeting basis for each potential investor / fund. Even we work with exclusivity for your transaction but we provide you 75% discount on success fee in the form of cash and equity both, on the routine fee that we charge for approaching investors / funds in our network.

As briefed above, the model deviced by us is unique in the world, which not only expediate the time and probability of getting you a successful fund closure but also offer a win-win solution for yourself as founders and ourselves as i-bankers.

On the basis of discussion with you at the time of accepting mandate, we approach to the investors / funds in your as well as our connections simultaneously or we first finish approaching to investors / funds in your network and if we are unable to get success then only tab our connections.

Fund My StartUP consists of 3 easy and practical stages:
1) Get your startup eligibility checked with Check My StartUP
2) If eligible then execute a Service Mandate for Fundraising with us
3) Be responsive in providing us the reverts to the concerns of investors / funds and conducting digital and / or meeting in person with them.

When it comes to deciding whether to opt for the exclusive mandate route or to go open listing route, the exclusive mandate is in best interests for clients and is indisputably the wisest choice, as it helps to achieve the best possible price the market will pay. This is because exclusive mandate – permitting only one agent to accomplish the sale – affords the agent the opportunity to work with and for you, never against, without the pressure and inherent disadvantages of several other agents also looking to sell the property.

Moreover at Transparent, we have a highly discounted, special pricing package for investors / funds in your connections, which is acceptable to most of the founders.

To prevent such disputes and know more about various agreements and instruments which are essential on Day one of starting the startup , check our exclusive blog on Not just Statutory Compliance! Apply Internal Corporate Governance to build the Backbone of your Startup!!

“Having Value” and “Being Fundable” are two completely different things. While a good idea is usually a necessary ingredient for the formation of a good company, it is not sufficient by itself for any serious investor to fund.

Why? Because there are also other good ideas out there, some of which have already been developed, tested and put into practice, thus decreasing the amount of risk an investor will be taking. The bottom line is that the chances of getting the ideas by themselves funded by professional investors are quite rare in today’s scenario.

Almost 29% of the startups fail as a result of running out of cash. To learn more about the solutions to the internal cash management howler of startups, check our exclusive blog on Why’s and How’s of Internal Cash Management: Fuel that keeps the engine of startups running

Investors would advise entrepreneurs to reverse engineer the end state. As a rough rule of thumb, each funding milestone should last two years. One full year to put heads down on building the business and then pick up your heads to fundraise with the intent of closing six months after. That way, you’re never within six months of being out of cash.

Investors think there’s a big danger in raising too much money in many companies, particularly seed stage companies, because it allows the entrepreneur to ignore the market feedback and continue to believe what they want to believe for too long. Investors are big fan of raising only enough money to get through the core risk reduction in that round, whether it’s product market fit or proof of revenues. Then add something like six months onto that runway for each one of those rounds to account for uncertainties.

There are two dangerous stages where having too much capital can actually be a detriment to the company. The first is before a company finds product market fit because it takes off the sense of urgency. You can ignore market feedback. You can chase the wrong opportunities because you have just too many resources. It leaves you unfocused.

The second is when you are at max revenue growth, but don’t yet have good unit economics because you can get in the trap of continuing to burn your excess capital to fund for the revenue growth whereas if you had more constrained capital, you would start to think about converting that revenue growth to actual unit economic growth.

The reason this feels so much like a bubble is because there are so many companies out there who continue to invest in user growth who haven’t proven unit economics or certainly haven’t proven that they can build unit economics off of a contained infrastructure and ultimately be profitable.

In this environment, you’ve got to pull back from growth until you’ve got good unit economics that justify that growth.

It’s math. It’s a function of two numbers: the amount you raise and the valuation of the company. So if dilution is a sensitive issue, you need either a larger denominator which is the value of the company and you can get that through potentially proving out more before. Or you can take less money to decrease the numerator.

But again, many investor’s think that being obsessed about dilution is the wrong thing to obsess about. You should, optimize for success.

The venture business is built around the notion of an expanded pie, not the size of the slice and that’s how an entrepreneur should think about it as well. Entrepreneurs and investors should be asking what’s the biggest pie they can bake and not asking about protecting a slice. Frankly when an investor talk to an entrepreneur who seems obsessed with protecting their slice, he wonder whether they have the ambition to build as big a pie as investor’s do?