By ROBIN GHOSH
(FORMER CHIEF ECONOMIST, THE BENGAL CHAMBER OF COMMERCE AND INDUSTRY)
KOLKATA, 18 AUGUST 2022
Every startup has to go through a track and pass through many stations. Stations are many and they are:
1. Idea station. No need for funds. Generate ideas.
2 .Pedalling station. Need a small working space, small capital, opportunity to connect with the ecosystem of the proposed business. May join sponsored Accelerator Programs conducted by Government and Private organizations.
3 . Embryo station. You can now raise money from friends and family, angel investors, high networth individuals, private investors and target oriented Venture Capital firms.
4 .Investor station. Now institutional investors arrive. Build a sustainable company. Accelerate. Create a big ticket company. A VC company should be able to exit within five to seven years.
5 .Takeoff Station. You are now ready for a take off. You have achieved product market fit. Exploited and harvested full opportunities. Achieved profitability. Obtained series of funding.
6 .Dilution Station. Investors will demand shares. Founders have to dilute equity. Investors may also demand shares in the company. Startups generally have to halt in each of the stations, spot opportunities and threats, strength and weaknesses, strategize, create action plans and implement the plans.
While implementing the plan, the startups have to be in sync with the ethos and expectations of the investors . What are the investors looking for ? They will look at the team, market, product and business model.
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