SUMMARY
On Day 2 of Startup Mahakumbh, MSH hosted two sessions on fundraising for early stage startup founders
The sessions featured industry leaders like Simpl’s Nitya Sharma, Droom’s Sandeep Aggarwal, Shiprocket’s Vishesh Khurana, early stage VC Anup Jain
The sessions delved into strategies to raise seed funding, common pitfalls to avoid, and more
The Ministry of Electronics and Information Technology (MeitY) Startup Hub (MSH) hosted two insightful sessions on the second day of the ongoing Startup Mahakumbh, touted as one of the biggest startup events, in New Delhi. These sessions focussed on providing valuable guidance to early stage startup founders for fundraising.
The first session, “Mistakes & Learnings For Founders During 1st Round Of Fundraising,” addressed the current funding environment and key considerations for early-stage startups.
The session featured Sandeep Aggarwal, founder and CEO of Droom; Nitya Sharma, cofounder and CEO of Simpl, and Vishesh Khurana, cofounder of Shiprocket. It was moderated by Vaibhav Vardhan, cofounder and CEO of Inc42.
To dig deeper into the dos and don’ts of startup funding, the MSH hosted Anup Jain, an early stage VC, in the second session. During the interactive session, he shared tips and strategies for raising seed funding.
Funding Climate, Opportunities & More
During the first session, Vardhan asked the panellists about their views on the funding landscape in 2024. To this, Aggarwal said, “For an early-stage startup, there is never a funding winter. Their ideas are resistant to economic cycles. I have written more checks in the last year than ever before.”
Sharing his optimism with the attending startup founders he said this is a great time to build startups and there is enough dry powder with investors.
Echoing similar sentiment, Simpl’s Sharma said seed-stage funding continues to be attractive despite investors being cautious.
Khurana said that a compelling founder profile and a minimum viable product (MVP) can secure funding even for pre-revenue companies.
The panellists also discussed the importance of raising funding at the right time from the right investors.
Advising founders to focus on business continuity, Aggarwal said, “Funding is one of the most difficult things you will do. You need to find someone who does funding for a living or a cofounder who can look at it. Because the business must go on.”
He also urged investors to not raise funding solely for marketing purposes. “The right time to go to a VC is when the fire is burning and money is the gasoline to fuel the fire,” he said.
Meanwhile, Khurana emphasised the importance of choosing the right investment partner and aligning funding with the growth phases of the startup.
Avoiding Common Pitfalls
The session also offered insights into common mistakes founders make during fundraising.
Sharma highlighted that unclear communication from investors can be a problem at the time of investment. He advised founders to seek clear “yes” or “no” answers from them to avoid confusion.
Khurana warned against changing core goals to appease investors. “If an investor tells you to change your goal, it’s a big red flag,” he said.
Seed Funding Strategies
The second session by Jain provided founders with a roadmap for securing seed funding. He gave the attendees three mantras — Know Your Investor, Know Yourself, and Know Your Pitch.
“Startup founders tend to get busy with their business but don’t forget what your investors look for. You are the product and the investors look at you first at the early stages,” he said.
He advised startups to always study the portfolio of the investors they’re reaching out to. Citing his own experience, Jain said, “I have received decks from an investee company’s competition. You don’t want to make such mistakes.”
He also urged founders to build genuine relationships with investors before seeking funding by connecting with them via various events. “Networking events like Startup Mahakumbh and others help connect with investors. Use AI to see which networking events best suit you and block your seats,” Jain added.
To conclude, he shared some practical questions for early-stage founders to ask investors — Are you currently investing? What is your investment process? What is the minimum and maximum check size you typically offer? What percentage of ownership dilution do you typically target?
