This was my answer to a question on Quora:
The way to raise capital for your education sector startup would be the same as it is for any other startups. i.e. first you need to assess if your venture is likely to be of interest to investors. (Not all kinds of businesses are VC/angel fundable).
Investors would want to know the following:
- Is the concept/product/solution addressing a real need or opportunity?
- Is that opportunity large to build a very large business ?
- Is the venture doing something that is innovative, disruptive of differentiated than what the customers are currently doing to address the need that you propose to address?
- Is the differentiator defensible? I.e. Is there something unique about your venture that gives you a significant head-start and a defensible competitive advantage.
- Is there a strong business case underlying the concept?
- Can this scale?
- Is the team competent and aware of of experienced in all aspects that will be required to build a strong business around the product
Also, while being in a Tier 2 city should not be a deterrent for really high-quality ventures, especially if you have traction to demonstrate, it is indeed challenging to raise capital as typically you and investors would need to meet often, at least in the initial stages. Hence, it may be better to find a local anchor investor, and then seek co-investments from other investors.