-kind words cost nothing-
Venture capital is a form of investment in early-stage companies with strong growth potential. The types of businesses venture capitalists invest in tend to be young and often pre-profit, and potentially even pre-revenue. Venture capitalists buy minority equity stakes in these companies and provide them with financial support and business expertise to help them grow and succeed.
We have a history of collaborating with companies that not many seem to approve initially. For these companies solve rather unsexy problems of the rather common janta. We don’t care if it looks ugly, as long as it promises a good future and a growth as if it was weed.
However the process is subjective. Sometimes we feel network effect is more important than the tech, or that tech is more important than design, and sometimes we feel distribution is more important than engagement. Bear with us through these ugly discussions as we just are interested to know how strongly you feel about the market and your approach to stand out.
After you send us your profile, we review it and check the feasibility of the idea. After a few meetings and calls, if we form a positive impression of you, we hear your final pitch and come to a decision. We give it a few weeks before taking the final call.
We think that a country of our size has big markets and bigger markets, so choosing
a market is about relative size.
Venture capital supports entrepreneurs in finding and developing their business model so that they can bring their product to market, satisfy a business or consumer need and create genuine value. Since the companies are young, we as venture capitalists take a balanced and systematic approach in determining not only the feasibility of the business concept but also the entrepreneur’s motivation and context.
In the end, we love to invest in bright ideas and young founders, who have the ambition and encouragement to see their idea through to success.
We aim to generate value by investing in early-stage or start-up businesses with high growth potential and a creative, transformative business model or product.
We are open to all sectors. All we expect is mutual growth.
Sunday evening, because we just can’t wait for the week to start!
It is never too early to reach out to us. The best time to pitch is when you haven’t got a single customer and the best form of pitching is a link to your product or your service.
It will help if you describe yourself to us in a word or two: blogger and hacker, consultant turned cook, designer mom of two, Musician turned data analyst, doctor turned banker, etc. We ideally want you to be all of these.
After arduous research, we have found that the following criteria defines a good entrepreneur. So either you have all of the below, or just the last one.
- Hunger – Underdogs, like struggle
- Have only one focus in life
- Hustle – Take very quick decisions using subconscious
- Very frugal, lifestyle already sacrificed
- Love breaking the norms / your surname is Bansal
Sam Walton always said, “ I know I am not the first one to do this change but I promise I won’t be the last one to do this either”.
It’s more about the execution, and not about the idea sometimes. In India some business models are just dead on arrival. And yet there are many ideas that will work very well in India. We don’t mind if you are inspired by somebody, but we prefer that you write your own script.
1.The Product Life Cycle
Is your product innovative and well researched? How long will it take to start bringing in profits and how long before you need new product variants? These are important factors for us when we are deciding if we want to invest, as the cash flow cycle depends on the product life cycle. Generally, we prefer investing in creative projects that have a bright future projection.
2.Your Willingness To Take Suggestions
Everyone is passionate about their idea but only a few are willing to bend their ways and take suggestions from market experts. We are more likely to work with a person who is open to discussion on the various decisions that will be needed to be made, as investing is always a risk.
3.Your Cash Flow Projections
Any investor looks at the cash flow projections before he invests. The time duration it takes to recover costs and make profits matters. What you pitch is what we expect!
4.Return On Investment
The percentage of ROI is another deciding factor as to whether we will choose your project. We look for the growth of our money as well when we invest in the growth of your business.
We look for a business with a cohesive team. Everyone should be willing to give their best and we also do our best to put in our collaborative efforts to take your business to new heights.
We have sleepless nights after we say ‘sorry’ to an entrepreneur. So please make sure that your company is disrupting something, shaking things, offending a lot of people. If you want some clues, leverage from the list here:
- You think the current social networks will fade away, like their predecessors, and you want to build the next one.
- You were denied a loan by a bank and you want to raze down all those big buildings and shrink them to an app.
- You want to eliminate exams entirely, and want to do the assessments by monitoring the pulse rate of the students during the class.
- You don’t like the current music apps, and you think your taste of music should play on its own for you.
- You want to make consumer hardware in India, even though your batch-mates think you are nuts to stay back here.
- You want to create a brand leveraging internet for marketing, sales and distribution.
Here is what our term-sheet looks like. It’s rather similar to the ones other funds have, but we sincerely hope you will want to work with us in-spite of it. Please think of us as cool people because we have published it in open.
- Type of Security – Convertible Preferred Stock, standard conversion terms
- Vesting Clause – Equally vested over 4 years, 1 year cliff
- Liquidation Preference – non-participatory and no double dip
- Anti-dilution – Broad based weighted average
- Other commercial rights of investors – Convertible Preferred Stock, standard conversion terms
- Right of first refusal on promoter or angel stock sale
- Tag along right ahead of any promoters
- Drag rights on all promoter stock after IV years from investment
- Pre-emptive rights to maintain current level of shareholding
- Limited rights to angels if there is an angel investor, he/she will only have the liquidation preference and anti-dilution rights
- Board of Directors – IndiaQuotient – right to appoint 1 director
- Veto Rights
- New share issues, dividends, Buy back
- Related party transactions
- Borrowing or early repayment
- Dissolution or liquidation
- Merger, consolidation or sale of business
- Sell transfer or grant any IP rights
- Effect any change in management control
- Change in size of the board of directors
- Sizeable Capital expenditures
- Amending of the MoA of the company
- IPO plans
- Approval of annual accounts, operating budgets
- Removal or appointment of any key employee
- Change in scope of the business
- Lock in Period – 100% of the Founder stocks will be locked in till exit of the investors.
- ESOP Pool – To be created pre investment
- Representations and Warranties – Standard
- Use of Proceeds – To be agreed upon by investors and founders
- Financial Statements & Reporting – Monthly operating MIS before 8 th of next month, bank statements, quarterly financial statements including detailed cashflows, annual audited statements. Format to be agreed upon.
- Inspection Rights – Standard
- Sunset Clause – When Investors go below 5% shareholding
- Exclusivity – For 30 days
- Diligence and legal Expenses – Upto 1% of the transaction, on actuals, to be borne by the company
- Governing Law – As per Laws of India
- Validity – The offer in this Term Sheet is valid till 30 days from the signing of termsheet.
-never stop looking up-