Simone Roznowicz’s Post

Just 30% of startups successfully raise their Series A rounds after raising Seed capital. 70% die between Seed and Series A because they can't find any PMF (Product Market Fit). Series A capital is growth capital. The purpose of this #money is to take your product to a wider audience and multiply your revenue. Series A rounds have a large range in India. I have seen a few founders raise as low as $2M in their Series A while some lucky ones raise as much as $10M or more. The size of your Series A depends upon the amount of capital investors are willing to give you. Very few #founders say no to more money. The temptation is too big to resist. As a founder, you can always use the extra money in some way. The quantum of your Series A round also reflects the stage of your business and your ambition. When you make your financial projections, your revenue and other targets for the next 2-3 years tell you how much capital you need to achieve them. Every funding round is linked to certain milestones. The money you raise has a certain purpose, a goal. If you achieve that goal, your next round becomes a cakewalk. If you don't, then you must give investors a compelling reason why you couldn't do it. In 90% of Series A rounds in #India, numerous funds and individuals invest together. The largest investor who typically gives 50–60% of the money is called a lead or a lead investor. The lead decides the valuation and other terms & conditions. The smaller investors, called the co-investors, follow the lead. Sometimes a few investors might show an interest in your startup but say they can't lead the round. These are smaller investors who typically invest with a larger VC. IMO, you should not engage too much with them until you have found a lead investor. Unless you have found a lead investor, they are useless for all practical purposes. I am not saying you should ignore them. We (Tremis Capital) are one such co-investor. I don't want you to ignore us. However, the focus should be towards finding a lead investor. Once you have found a good lead, preferably a #VentureCapital fund, things quickly fall into place. A good lead investor is a big validation for other investors. Finally, don't wait for your perfect investor. You might want Accel or Sequoia, but when someone offers you money at reasonable terms, take it. Time is more important than a big name. P.S. We are organising our next Founder Fundraising workshop on the 3rd & 4th of August. It's an 8-hour boot camp for founders who want to raise capital. The registration link is in the comments.

I’ve talked to 50+ VC-backed startup founders, and you’d be amazed by the number of people who “didn’t know the rules of the game” when they raised their first round… By Guillaume Moubeche I’ve also invested money as a LP (Limited Partner) in a few VC funds to understand better the ins and outs. So, here’s a quick recap of the “golden rules” for everyone who’s thinking about raising. VC or Venture Capital is a form of private equity and a type of financing for startup companies with long-term growth potential. VCs usually manage the money of their LPs, promising to return 3 to 5 times the investment over 5 to 7 years. To make it simple: If you give them $100k, they will give you back $300k in 5 years (or at least that’s what you hope for when investing). So, to be able to invest money in companies, VCs have to raise funds for their LPs. But how exactly do they raise funds? Well, exactly like entrepreneurs - they need to convince investors. And the best way to do so is to have an impressive track record (this is important for later), either because they’ve worked in other funds before or thanks to their network. Once they’ve raised a fund they usually invest it over 18 to 24 months. This is where it becomes interesting… Remember, LPs will only get a return on their investment in 5 to 7 years. But one fund is usually invested over 18 months. So what’s happening during that gap time? Well, VCs usually raise another fund. And another one every 18 months… But how can they build a track record if they usually want to exit after 5 to 7 years (as they promised their LPs?) Well, they usually give a valuation to their portfolio. And for them to show that their portfolio value is growing, they need two things: 1- They need startups to raise another round at a higher valuation 2- They need a liquidity event to exit (startup is getting acquired - an IPO or selling to other investors) And that’s where most founders get confused… There’s a simple reason why VCs pressure founders to spend the money they’ve raised “fast” OR raise another round… VCs play a “portfolio” game where their portfolio must be growing so they can raise another round. When founders play an “all-in” game. VCs want you to take the maximum risks possible because they are fine losing 7 times out of 10. But as a founder, are you fine taking that level of risk knowing that you could be in control and have a lot more chance to succeed if you decide to take a bit more time to achieve your ambitious goals? P.S: I have nothing against the VC-backed route. I just feel like it’s important to know which game you’re playing 💪

Venture debt firm Stride Ventures has raised USD 165 million (about INR 1,380 crore) for its Fund III, which it plans to invest in Indian startups within a year. The third fund has garnered strong support from a diverse mix of investors, including insurance companies, family offices, corporate treasuries and high net-worth individuals (HNI). Read the full news here. https://lnkd.in/giWMQGT7 #venturedebtfirm #venturedebt #strideventures #startups #business #entrepreneurs #businessnews #latestnews #news #latestupdates

Startup #Investing is on positive rise After 2 years of slowdown there are definitive positive signs regarding startup investments. There are several mixed reasons for this 1. Maturity among founders Entrepreneurs have realised not to change unreasonable valuations and present a more realistic business case when raising funds 2. Rise of tier 2/3/4 investors Not only on angel investing but business community from smaller towns are actively participating in taking bigger bets targeting bigger equity in proven startups. They are now actively setting up family offices and participating as LPs also. 3. Dry powder of VCs VCs have raised some big funds in last 2 years and now there is a pressure to deploy that money. Currently they have used hardly 10-15% of the newly setup funds What’s your views on this? Have shared by views along with industry colleagues here https://lnkd.in/gDxFSNDk #LetsBuildItTogether Avinya Ventures We Founder Circle Invstt EvolveX

Micro VC Funds: Why is This a Trend? Micro VC funds, defined as those with less than $50 million in AUM, are becoming a popular and exciting option for founders seeking early-stage financing. I recently read an insightful article by Ankit Sharma that resonated with me, and I fully agree with his perspective on this trend. According to Crunchbase, the number of Micro VCs has surged by 120% in recent years, with around 58% of them based in the US. At Kiara Capital, we take pride in being a Micro VC and embracing the advantages it offers: greater agility and flexibility, swift decision-making, and a deep, specialized knowledge base thanks to our sector focus on B2B Fintech. When well-managed, Micro VCs stand out by walking closely with founders, providing personalized attention from partners, and offering essential support during the crucial early stages. This close relationship drives innovation and helps startups navigate initial challenges. For founders, partnering with Micro VCs can significantly enhance their chances of growth and success. This trend not only boosts the startup and innovation landscape but also fosters a thriving ecosystem for new businesses. Read Ankit Sharma's article here: https://lnkd.in/esrfGXBg #VentureCapital #Startups #Innovation #Entrepreneurship

Startup School 6: Why raising VC investment is so hard (…for European, all-female, purpose-driven teams) #startup  #fundraising  #angelinvestor  #investments  #VentureCapital  #vc #Entrepreneurship  #venturefunding  #investing #TechNews #Innovation #technology  https://lnkd.in/eaHnvNK4