Start up: Funding options by Anand Lunia

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This slide deck was prepared by Anand Lunia for the TiE Institute Knowledge Series (TIKS) session in Mumbai , Aug 2010

This slide deck was prepared by Anand Lunia for the TiE Institute Knowledge Series (TIKS) session in Mumbai , Aug 2010

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Transcript

  • 1.
    • Office deposit- beg for it to be reduced to 3 or 6 months
      • Pay rent in advance, instead of deposit
    • Furniture- borrow, or buy second hand
    • Hardware, laptops, desktops- lease for 2 or 3 years, convert into a monthly cost
    • The idea should be to convert all expenses into monthly expenses
    • Don’t look at the interest rate of leases- it may be a bit high, but equity is far more expensive
    • Try to not lock in money for deposits and advances
    • Software purchase Costs:
    • Borrow or hire?
    Managing Capital Costs
  • 2.
    • Product Development costs:
    • Develop products from home, while moonlighting
    • Atleast develop prototypes before starting up
    • Time is the biggest cost factor- so don’t underestimate it
    • Hire senior resources part time till your sales start
    Managing Capital Costs
  • 3.
    • Salaries of employees, self- can they be back-ended or to some extent milestone based?
    • Travel and other overheads- lead by example in saving costs here
    • Marketing investments- become speaker at seminars rather than paying for them, for example. Write articles for newspapers rather than advertising
    Running Costs
  • 4.
    • Accountants, Lawyers, service providers can be lenders or may even take equity
    • Landlord taking equity? Or revenue share?
    • Employees – especially part time specialists take equity for their services
    Exchange Equity for Service
  • 5.
    • Best way to generate survival money
    • Gradually build your contact base, client base, knowledge base and reference base
    • Training, consulting, coding assignments to survive and even generate surplus capital
    Consulting Cash-Flows
  • 6.
    • Will a telecom operator fund your great product idea?
    • Will your first customer become your reseller?
    • Can a custom project be graduated into a product?
    • Can the advance money from a sale fund the execution?
    • Will you be willing to give a discount for an advance payment?
    • Will friends and family fund a project execution?
    Cash flows- Partnering Customers