There's enough money in the market for valuable startups, concur investors

There's enough money in the market to be invested in valuable startups and sunny days are ahead for them, believe investors.

Speaking at a panel discussion at TechSparks Mumbai, Puneet Kumar, MD, Steadview Capital; Shashank Randev, Co-founder & Founder VC, 100X.VC; and Abhishek Bhagat, MD, Digital & Technology Investment Banking, JM Financial Ltd, concurred that we are past the so-called funding winter and bright days may lie ahead.

Bhagat of JM Financial believes that while some startups raised funds at inflated valuations in the past few years and are struggling to justify the price tag, there are plenty of opportunities ahead for many startups.

"If somebody is doing something valuable, there's actually enough money in the market today. If you are founder and you are doing something right, I think it's as good a time to raise money as ever," said Kumar of Steadview.

Randev of 100X.VC also believes there is enough money today to invest in bright startups, and these startups can also raise follow-on rounds. He said his fund is deploying capital at a very fast pace, after making 62 investments last year.

Bhagat agreed that the capital pool has increased and there are large companies, which are sitting on big cash reserves, now willing to deploy capital. However, more creativity may be required as the times are different, he added.

Time to rethink funding

The panellists also believe that founders must rethink funding in such turbulent times. While funding may be needed to keep the wheels turning, there are various ways to build a meaningful business while being bootstrapped.

"Basically, we have started seeing funding as the biggest milestone in startup journeys whereas the real milestone is actually the customer love," said Kumar.

Taking money is an obligation to investors, which requires a founder to run their company in a certain way, he said.

Founders must consider where the money is coming from and what value investors bring to the table, said Randev.

"You're also diluting your own stake beyond a point as you're raising money. You keep reducing your stake, but it should not be to a point where you don't have interest in the business," said Bhagat.

"That would be the worst case scenario, because you are not just doing it for yourself but also for hundreds of employees or hundreds of co-creators you may have brought on board when you started the company," he added.