Angel capital is not an easy process and can be extremely competitive

Obtaining angel capital is not an easy process and can be extremely competitive. An entrepreneur can follow several strategies, so they can increase their chances of receiving angel funding. Angel investors primarily look for 6 important components when agreeing on an investment:

1. The promise of a large ROI
Angel investors expect more than just getting their money back—they also seek a profitable return on an investment since their investments tend to be high risk. As one financial analyst claims, “For every dollar that an angel puts into a company, s/he would like to take seven dollars out after taxes in seven years.”

2. The rationale behind every investment
Angel investors have a history of being successful entrepreneurs and many are delighted in helping build and create an enterprise that will promote the economic development of a community. Entrepreneurs should give angel investors a legitimate reason to invest in their company and cherish the skills and expertise an angel investor will bring to their enterprise.

3. A promising pitch and convincing business proposal
An entrepreneur should consistently practice and refine their pitch so it will be flawless. In addition to presenting a promising pitch, angel investors also desire to see an entrepreneur’s business plan, detailing the ideas and objectives of their company. This business plan should include any financial projections, comprehensive marketing plans, concise details about the target industry, and who the prospective consumers will be.

By preparing a flawless pitch and strong business proposal, the entrepreneur will undoubtedly increase their chances of obtaining angel capital. They should also tailor their pitch and business plans according to the type of angel investor they are planning to pursue. There are three major types of angel investors that business owners should be aware of.

1. a. Angel investors concerned with economic gain- these investors are motivated by the prospect of a large economic reward, especially if the company gains public recognition.Entrepreneurs who seek these types of angel investors should not only stress the purpose of their business idea(s) but also mention shareholder percentages and ROI in their pitch and business plans.
2. b. Hedonistic angel investors- these investors are attracted to investing because of the thrill associated with risky ventures. They also believe that the entrepreneur’s concepts are worthwhile and desire to help the entrepreneur market their innovative ideas. While the process of successfully obtaining angel capital is an extremely competitive process, new business owners who seek funding from these investors should have a well-prepared, convincing pitch and business plan.
3. c. Altruistic angel investors- these investors take pleasure in helping young companies thrive and enjoy promoting community development and job growth. Entrepreneurs who seek capital from these types of investors should perhaps stress the advantages of economic growth in communities and economically sound technologies.

4. A solid management team
To attract angel investors, an entrepreneur must also present a solid and trustworthy management team that is skillful, competent, and experienced in their industry. The entire team should have a firm record of success, be knowledgeable on marketing products and services, managing employees, and have insight on conducting proper financial matters. It is a proven fact that a strong management team can contribute to the successful growth of a company.

5. Proper business structure and organization
An entrepreneur’s business must be properly structured for investment. This includes an angel investor’s percentage of ownership as part of the business deal. Angel investors are also likely to be involved in company operations through active mentoring, management, or being a member of the board. Most angel investors will expect this type of formal agreement, as well as a large return on investment, in exchange for providing the new company with the needed business capital.

6. A well-defined exit strategy
The entrepreneur and angel investor should agree upon a time frame for the investment. This means that for a given period of time, the angel investor will provide the needed capital, expect to be actively involved in a company, and will anticipate an exit after that phase comes to an end. The most common exit strategy of an angel investor is through the sale or merger of a company.

source-go4funding

OUTLOOK OF FINANCIAL YEAR 2012 -13

Happy Financial Year 2012 -13 to all our readers!!

2011 -2012 has been an eventful financial year, perhaps a record year in terms of overall volume of financing for Venture Capital in India. One element that has continued to keep the confidence going around is increasing quality and quantity of startup entrepreneurs.

We saw a stepped up inflow of funds in  Traditional growth equity firms  which  provided a later stage support to venture backed companies, which augers well for entrepreneurs and the venture industry. Valuations, especially in ecommerce were beginning to look heady, in the middle of the year.It seems like venture capital is getting its roots entrenched , though predicting an year is tough– we hope for a great year in 2012 -13.

In 2011-12, Public markets were choppy throughout the year in India, and globally in the latter half. The exit front in 2011 -12 was actually bit disappointing as dozen plus venture backed companies (largely Internet related), which could be half a billion or more in value, primary exit theme for most of those was IPOs (initial public offering).

With trends over the last six years been:

·         2006 - Mobile Value Added Services;

·         2007 - Education, Real Estate;

·         2008 - Healthcare, Retail;

·         2009 – Microfinance;

·         2010 - Rural, Agriculture;

·         2011 – Ecommerce and so on.

Not many themes have continued the momentum – I do hope ecommerce does.  And for 2012, maybe we will be back to mobile VAS (times are changing there), or Education. 

The Outlook of 2012-13 looks to be driven more by the health of the markets, rather than by the availability of a good pipeline. Investors may start thinking about diversifying their exit options – both in Internet companies where traditional thought in India has been around IPOs (for lack of an M&A market), but also in terms of looking at investment areas where the dependency on IPOs is less (good old outsourcing!).

Wish you all the best for FY 2012 -13!!!

What questions an Investor asks an Entrepreneur ?

• What ignited the spark in you to start a new business venture or to make significant changes in an existing business? How did the idea for your business come about?
• How do you find people to bring into your organization that truly care about the organization the way you do?
• How important have good employees been to your success?
• What three pieces of advice would you give to college students who want to become entrepreneurs?
• If you had the chance to start your career over again, what would you do differently?
• What would you say are the top three skills needed to be a successful entrepreneur?
• What have been some of your failures, and what have you learned from them?
• How long do you stick with an idea before giving up?
• How many hours do you work a day on average?
• Describe/outline your typical day?
• How has being an entrepreneur affected your family life?
• What motivates you?
• How do you generate new ideas?
• How far are you willing to go to succeed?
• What is your greatest fear, and how do you manage fear?
• What are your ideals?
• How do you define success?
• What is the best way to achieve long-term success?
• Is your company profitable or what is your profit for last year?
• Where did your organization's funding/capital come from and how did you go about getting it? How did you obtain investors for your venture?
• How do you build a successful customer base?
• How did you decide on the location for your business?
• Do you believe there is some sort of pattern or formula to becoming a successful entrepreneur?
• If you could talk to one person from history, who would it be and why?
• Who has been your greatest inspiration?
• What book has inspired you the most? (OR What is your favorite book?)
• What is your favorite aspect of being an entrepreneur?
• To what do you most attribute your success? What would u say are the five key elements for starting and running a succesful business?
• What has been your most satisfying moment in business?
• What do you feel is the major difference between entrepreneurs and those who work for someone else?
• How do you go about marketing your business? What has been your most successful form of marketing?
• What kind of culture exists in your organization? How did you establish this tone and why did you institute this particular type of culture?
• In one word, characterize your life as an entrepreneur.
• What are some of the biggest mistakes you've made?
• How can you prevent mistakes or do damage control?
• What are your hobbies? What do you do in your non-work time?
• What makes you happy?
• What sacrifices have you had to make to be a successful entrepreneur?
• Excluding yours, what company or business do you admire the most?
• Where you see yourself and your business in 10 years? 20 years?
• If you were conducting this interview, what question would you ask?

Indian Funding Deals of the Week - March 26th to April 1st 2012

Funding, M&A Deals of the Week [Mar 26^th to April 1^st 2012]  

Funded Company / Acquired Company	Deal Type	Who Funded /  Who Acquired	Funding Amount	Remarks
Kalki Communication Technologies	Private Equity	IFC & Global Environment Fund	Rs. 23 Crore	Not Available
Raining Clouds Technology Pvt. Ltd.	Seed Funding	Vijay Shekhar Sharma	Rs. 1 Crore	to develop their Appsurfer App further
Staffoncontract.com	Seed Funding	Vishal Gondal	Rs. 50 Lakh	To develop platform further & market it
Exotel Telecom Pvt. Ltd.	Series A Funding	Mumbai Angels & Blume Ventures	Rs. 2.5 Crore	For Tech development & marketing of their cloud telephony platform
iimjobs.com	Seed Funding	One97, IVP & other individual investors	Undisclosed	To develop better platform & ramp up engg team.
Linc Pen & Plastics Ltd	Minority Stake	Mitsubishi Pencil Co. Ltd	Rs. 20 Crore	(13.5% stake) strategic investement
Proof of Performance Data Services Pvt Ltd	Series A	Yournest Angel Fund	Undisclosed	To strengthen its technology platform & Infrastructure
Yatra.com	Minority Stake	Salman Khan	Undisclosed	5% stake in Yatra.com
Universal Components	Majority Stake	TVS Group	Rs. 100 Crore	For general business expansion
Grover Vineyards	Merger	Vallee de Vin	N/A	to make joint entity – Grover Zampa Vineyards
Spear Logistics Pvt Ltd	Series B	Ambit Pragma Ventures	Rs. 7 Crore	For Business expansion
Enterprise Nube Services Pvt Ltd	Series A	Accel Partners	Rs. 8 Crore	N/A
IFMR Rural Channels & Services	Series A	Lok Capital + 1	Rs. 26 Crore	For offering financing in rural locations
Shriram Housing Finance Limited	Private Equity	Valiant Partners	Rs. 170 Crore	N/A
E2E Rail	Series A	VenturEast Proactive Fund and Zephyr Peacock	Rs. 30 Crore	For General Expansion
Mobimasta	Acquisition	Affle & D2 Communication	N/A	To scale up Indian Business
Tulsi Castings and Machining Ltd	Private Equity	India Venture Advisors	Rs. 40 Crore	N/A
Games2Win.com	Minority Stake	Nirvana Venture Advisors	N/A	10% Stake

source-trak.in

Branding by Solopreneurs

Strong branding is critical in our ad-cluttered world. After all, you want to ensure that you're the first provider in your niche that comes to customers' minds.

But what if your brand is, well, just you? How can you be memorable and stand out?
Never fear -- solopreneurs can have snappy branding, too. Here's a quick guide and some examples of one-person businesses that have great, memorable brands:

 Make it visual. Simple branding is best, especially if you can make an association in people's minds that helps them remember you. Two of my local realtors are Ed Aro and Penny McLaughlin. You guessed it -- Ed's logo is an arrow, and Penny's is a one-cent piece with her face on it in profile instead of Lincoln. Penny has had so much success with her brand that she grew into a real-estate empire with eight brokers, a.k.a. "Penny's Team." Their trucks are often seen around town, with that familiar penny logo on the side.

Be sure it's tweetable. Social media is increasingly important in coming up with your brand concept. Look what happened to Netflix when they didn't check if their chosen spinoff brand name, Qwikster, was available on Twitter. It turned out to be already taken by someone who wanted to post about their drug use. When you're choosing a brand name, consider how and whether it would work in social media.

Have fun. Some of my favorite solopreneur brands have humorous or whimsical elements. For instance, a proofreader and writing-consultant friend of mine, Stefanie Flaxman, is the Revision Fairy -- check out her cool cartoon. And franchise expert Joel Libava is the Franchise King, down to posing with a red-velvet-and-gold crown (once again, great visual). What better way to instantly communicate that he's the top expert in his field?

Make sure it fits. If the entrepreneurs I've cited above were uncomfortable with the brands they've created, their brands would flounder. You may be living with this brand for a long time, so don't go with a brand concept that embarrasses you. Customers will sense that, and you won't promote your brand as enthusiastically.

Be consistent. Once you've come up with your branding, you want to use it everywhere. Get new business cards, magnet signs for your car, stationery and a new sign for your store. Don't leave any of your old, less-awesome branding lurking around to confuse people.