My college-going daughter and I kid one another that New York city must be filled with single neurotic women who can't find Mr. Right. And their ticking biological clocks aren't helping! We joke about this, for that's the impression you'd get from the innumerable movies that we've guiltily enjoyed watching together.
If you replace "Will I find Mr. Right?" with the question "Will I ever get funded?" we might as well be talking about the typical entrepreneur who's tired of pitching to their nth prospective investor. And the ticking cash-flow situation doesn't help either.
So that the suspense doesn't kill you, let me answer your question. Hell YES! you will get funded.
Now that's behind us, let's talk about What the hey "getting funded" means. I assume most folks - young (and some not-so-young) entrepreneurs - when they talk about getting funded mean raising capital from a venture capital firm - or at the very least an Angel group - in other words, institutional investors. If so the answer is a little more sobering - most folks will likely NOT raise institutional investment! But then again you are not most folks are you?
Don't be discouraged - and if you are that easily discouraged - you might want to check if really want to be an entrepreneur. Statistics from countries in which entrepreneurship and the startup ecosystem are healthy and active - whether the US, EU or India - indicate that less than 1% of all startups raise angel or venture funding.
Regardless of what you've read or heard, at the end of the day institutional investors are looking to get a good return on their money. Both in the Indian context and even in the larger world of cloud computing, mobile apps, fat-pipe world, folks want to see far greater validation and customer or user traction. Unless you are Ashok Soota or Elon Musk its unlikely anyone's going to write checks, because they think your idea's hot. So the best way to raise funds, is to have done two things
#1 built a business that shows promise and demonstrates you can actually execute
#2 having raised some money in one of three ways spelt out below, to achieve #1 above
The best way, IMO, to achieve #2 is of course to get customers to write you checks. Numerous businesses such as Practo that have gone on to raise serious money began this way. My first business Impulsesoft too got its start this way. It has the advantage of letting you know, that someone actually values what you are doing and is willing to write a check.
Many businesses however, need capital to even get rolling. PayTM (One97) founder Vijay Sharma did freelancing on the side to generate cash. In his own words "At one point of time, before I could raise funding, to earn monthly survival money and capital for the business, I started doing some freelance assignments. I worked half day on those and half day on one97. It was tiring but at least I was able to have it going."
Most folks usually get friends, families (and other fools, including yourself) to write you a check or more. Finally you could borrow money - could range from family, bank (personal loan against collateral), credit card or that usurious money lender you may not yet know. It all depends on your risk appetite. Here you are asking someone else to take a bet on you and you need to take the first step.
Sure the world is changing - FlipKart began with an investment of Rs. 6 lakhs and the same amount will NOT get you started in that business. When Federal Express was getting started they needed upwards of $80 M and starting a new airline needs some REAL money. So sure some businesses can't get off the ground without serious capital - but usually such a business is started by folks or businesses that have already done one or more business. You as a first time entrepreneur can and will raise money - only keep in mind it will take longer than you reckoned, will involve kissing a good deal of frogs and is far more in your hands that you realize.
Finally in the Indian context, it's important to keep the right perspective.If as an entrepreneur you feel it’s hard to raise money, the story on the other side for an angel or VC is also not all hunky-dory. Angels and VCs are sitting on money and not finding enough good deals - a lot of money is chasing few quality deals - which is why you read about those unrealistically large numbers the other guy or gal seems to be raising. Here's what you do.
- First quit reading about who's raising how much money
- Keep building your business - in other words get customers, ship product, collect revenue
- Build a strong board of advisors & mentors who can help you & your company grow
- Get out there and keep hustling - networking, building relationships & pitching