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Start up: Funding options by Anand Lunia
 

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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    Start up: Funding options by Anand Lunia Start up: Funding options by Anand Lunia Presentation Transcript

      • 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
      • 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
      • 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
      • 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
      • 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
      • 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