| Scouting for Funds |
| Seed
money |
Are you an entrepreneur looking for seed money to start your
dot-com? Welcome to the world of angel investors, Venture Capitalists (VCs)
and private equity investors. However before you approach them to make a bid
for funds, keep the following in mind:
Angel investors take on the maximum risk since they step in at the preliminary stage, so all other things being equal, capital is more expensive at this stage. Striking a few alliances and developing a prototype, which could simply be the ‘proto-web site' could enhance your chances of getting funds on better terms.
Caption: Although it is not very difficult
to get early stage funding, you can increase the confidence of the investor
by putting in money to set up a site.
DBS Internet, Coolstartups, Ultimedia and Netacross are a
few among the web consultancies, which guide you through the initial phase.
A site which gives VCs an idea of what you want to do can be set up for as
little as Rs 50,000. Remember the budget should not be your major worry as
most of the consultancies are willing to give their services in return for
equity in the proposed venture.
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Where
the primary objective is to get seed money, it does not matter who does
the funding. However, if you are aiming to gain access to a larger network
for your business needs; it is always better to approach a specialist
outfit.
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You are at an advantage if your angels are working with a VC firm to fund
startups. For instance the VC firm Chrysalis Capital and angels Infinity work
together on deals. So if you are able to sell your idea to Infinity, it becomes
easier to get successive rounds of funding. However, if you are not lucky
enough, don't fret. There are specialized firms to take care of the funding
process for you. Edelweiss Capital and coolstartups.com
are two such entrepreneurship catalysts, which help you get funding.
Your team should be good. Angel investors want to be convinced about your capacity to execute and the onus is on you to present them with a team that is capable of rising to the challenge. If you have already roped in people with a good track record in functional areas it can make all the difference.
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