Last Saturday saw some curious entrepreneurs from all across Mumbai attending YourStory's weekly interactive session, in association with The Hive. This particular session had Shiladitya Mukhopadhyaya, a formidable name in the entrepreneurial circles, offer advice to young entrepreneurs on how to get ‘investor ready’.
Shiladitya’s journey to becoming an entrepreneur is quite the revolutionary story, which you can read here. Currently, he is Founder and CEO of Pointshelf, a hyperlocal mobile-based loyalty and payments platform for small and medium businesses; Co-founder and Advisor of Hipcask, a mobile app for wine, beer and whiskey lovers; and Co-founder and CTO of Rasilant Technologies Pvt. Ltd, a B2B company that helps companies automate their internal processes.
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On being a tech entrepreneur, Shiladitya said,
“A tech guy always judges his own work and they’re never really satisfied, which may not always work to their advantage when it comes to a startup. If you’re passionate about the problem, you’ll find a way out of it.”
He then went on to speak about how the foremost thing for an entrepreneur looking to build a startup was establishing the stage they were at currently. The most important part of this process was to ensure enough people saw one's product, were asking for it and that it was put on a valid social network to further its reach.
According to Shiladitya, the fundamental thing to consider before getting to the first stage of starting up was recognising one's product and market, and considering if one should tweak the product according to the market. It is also mandatory to note down your target audience before pushing on further. He, however, pointed out the advantage of being a tech startup, in that one had the opportunity to reach a larger group of people, made all the more possible in this ‘age of individuality and expression’.
At this point of starting up, one also needed plenty of motivation to keep things running.
To the audience's many questions on securing investors for their startups, and on equity troubles, Shiladitya explained that the investor would first like to know how many people you can have on your product platform and how many would actually use the product. This would be his way of gauging the market size. The next thing the investor would look at is if the product can survive in the face of competition from similar products, and also if his money would immediately accelerate your business. Speaking mostly about angel investors for the initial stages of startups, Shiladitya stated that while the investor would not expect immediate returns from the product instantly, he would be looking to make returns from the ‘next guy’ who invests in your product.
“Funding depends on what stage your product or company is at. More importantly, you need to find investors who will believe in you,” he said. Every entrepreneur should have an idea about of his or her ‘future revenue’ and should also be aware that there are various ways to monetise one's product, but there should be some realisation on which ‘bucket’ you are falling into.
“A mere show of passion doesn’t quite cut it, you need to show a product map to your investor”, Shiladitya cautioned. He extolled the importance of showing the investor a vision window, and what you are aiming to accomplish by the end of it. When it came to an angel investor, the lowest end would witness a funding of about Rs five lakh, while the highest end could procure a Rs 20-25 lakh, when it comes to an individual investor pooling in all his money. However, most angel investors worked with one or more fellow investors be it by professional association or otherwise.
As a response to audience questions on equity, Shiladitya said that one needed to rule by rationale and gut when it came to the percentage of the company that could be guaranteed to the investor. He advised the entrepreneur to stay away from an investor who was asking for 50 percent or more, because that was the amount owed to a partner, not an investor.
Shiladitya stressed on the importance of both founders contributing equally in terms of work and effort for the company- to make it an equal partnership. Else, the percentages should then be refigured, maybe even bringing in a third founder to the platform.
On the need to secure a target audience for your product, Shiladitya said- “You have to cater to the correct crowd, the correct growth and in most cases- that is the youth. That is the target audience you should be building your startup for.”
As a final piece of advice to entrepreneurs everywhere, he said, “Have a grand vision, but also plan your next step that will lead you to that vision.”
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)