Startup Next, the global and top pre-accelerator program – backed by the likes of Techstars, Google for Entrepreneurs, Global Accelerator Network and Startup Weekend – is coming to New Delhi !
The Startup Next program is designed for startups who plan to apply to accelerators or are pitching to investors for funding.
Startup Next is an intense mentorship program consisting of weekly sessions (one session in a week lasting three hours) for five weeks. The program has a structured curriculum and in-depth engagement with one-on-one mentoring, designed to help startups build the foundation of scalable ventures.
Continue reading “Startup Next, the global and top pre-accelerator program comes to Delhi.”
Employee Stock Options (ESOPs) is a powerful tool available to startups to attract as well as retain talent. However, often I have seen it being undervalued or under-utilised by startups.
ESOPs are shares that are given to employees so that they can enjoy significant monetary benefits if the startup is successful. Since the monetary value of selling equity of a successful startup can be several times higher than the salary, ESOPs alter the risk-reward equation and makes it attractive for potential employees to consider joining a startups, which otherwise at just salary levels may not be such a lucrative option.
ESOPs are especially useful when startups or early-growth stage companies have to hire senior talent with experience, and they don’t have monies to pay full market salaries.
In fact, investors too encourage founders to carve out an ESOPs pool – often between 5 – 20% of the equity depending on how well balanced the existing founding team is. If the team has gaps that need to be filled in, it is important to carve out a higher percentage of equity, as that will allow you to hire the right resources to complete the team.
As an entrepreneur, it is important for you to communicate the ‘value’ that your enterprise is likely to create and thus explain to potential employees the potential value of the stock they are getting under the ESOP. If the company is successful, the stock can provide a significant upside to employees.
Not just in hiring, but ESOPs can also be a very useful retention tool. That is because a well-structured ESOPs plan ensures that the equity is vested over a period of time (i.e. it is given to the individual in instalments spread over a period of time), and if the startup is successful, the individual is incentivized to stay on even if there is a matching salary offer from another company.
Panel discussion on funding for startups at the e-tailing India summit in Jaipur. While the summit was for e-commerce companies, the conversation on the panel was applicable to all startups.
At the eTailing India Conclave in Jaipur, April 2014.
It is possible to boot strap quite a few concepts into venture.
However, the perception these days is that if you have to be an entrepreneur, the first option should be to raise funds. (This perception has a lot to do with Business Plan Competitions in B-schools and engineering colleges where VCs are invited as judges).
My view is that raising external funding should be the last option. If possible, and it is possible in many cases, try to bootstrap a venture.
Bootstrapping necessarily means that you would be frugal. When you are low on cash, you innovate and become more creative in all things – in hiring, in developing the product, in marketing, everything… And you try hard to get to revenues faster. All these are fundamentally good for a business
At the pitch session for Microsoft Accelerator’s next batch, more than 35 startups presented at today’s event at 91Springboard in New Delhi ( May 30th 2014).
I was really impressed to see that the number of high-potential startups – great teams driving meaningful concepts addressing large market opportunities – was much higher than the number of average or not-so-good startups. The startup eco-system in India is certainly moving in the right direction.
Continue reading “Communicating your story in a minute”
Well, what you want to know about the angel investor are the following:
- Are you as excited about this as we are – what is your view of the opportunity?
- What do you think will be the challenges in the journey in achieving the potential?
- What is your expectation on return on your investment… and in what time period? What kind of an exit are you hoping for?
- What can you help us with, apart from the money?
- Why did you decide to invest in us?
In a lot of cases, because they typically invest in several startups, angel investors may have a causal interest in your venture. (Some call it the ‘spray & pray’ model where they invest small amounts in a number of companies that ‘seem’ nice and hope that some of them deliver on the potential promised). Your goal should be to get the angel investor super excited about the opportunity and the potential, and engage him/her as much as you can in helping you in the venture. Often warm introductions and perspectives from past experiences are priceless.