How should an education startup raise funds to scale up to the next level?

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.

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Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

1 thought on “How should an education startup raise funds to scale up to the next level?”

  1. sometimes the entrepreneurs travel on biz and think its a pleasure trip! but hopefully your write up puts things in place and perspective…..investors are indeed all over the place, some nearer than you think but may be proximity might fade away in today’s tech connected world after all, as far as the right fit has been found…..but helpful nevertheless

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