1. 21 Point Action Plan:
to Save Your
Startup Dream
March 2020
Private and Confidential
India’s first early stage
MicroVC fund

2. These are unprecedented times and there isn't a comparable
economic hit in recent history!

3. Context
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2008 was a systemic crisis that led to a credit freeze. However,
the market recovered as other parts of the economy were still
functioning
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The covid19 crisis is different as entire markets have shut down
This crisis is a reset button for the whole economy, i.e., it is
much deeper and much wider than 2008
As of this moment, there is no clarity as to when the demand will
be back and if it will be similar or completely different from the
demand curves, we took for granted before Feb 2020

4. Financial Planning for
this Crisis
Focus on Survival!

5. Financial Planning for this Crisis
Expect shutdown to
continue for 6 to 8
weeks
Survival is the most
important mantra for
this crisis
The speed at which
you respond to this
crisis will be the most
important determining
factor for your survival
Remove all fixed costs
Reduce all variable costs Reduce excess staff
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6. Financial Planning for this crisis
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Expect shutdown to continue!
1. The shutdown can continue
for 6 to 8 weeks from March
25th, 2020
2. The reopening will be
gradual. Therefore, supply &
demand will take time to pick
up
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7. Financial Planning for this crisis
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5 1. You (as a founder) must stay
healthy and alive
2. Your employees must remain
healthy and alive
3. Your dream (your start-up) must
continue to live to be useful to
society
Survival is the most important mantra!
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8. Financial Planning for this crisis
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Quicker Response!
The speed at which you will respond
to this crisis will be most important
1. How fast can you cut costs?
2. How fast will you find new
revenue lines?
3. How fast can you preserve the
cash in your bank account?
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9. Financial Planning for this crisis
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Remove all fixed costs!
1. Ask the landlord to forgo rent until
June 30th, 2020 (do not defer the
rent)
2. Ask for waiver on all payments for 90
days
3. Stop payment on EMIs and
renegotiate deferment terms
4. Do not fear cutting costs and losing
vendors, suppliers, advisor, or
employees for now – your start-up's
survival is the most important
objective
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10. Financial Planning for this crisis
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Variable Costs
1. Bring all marketing to zero
2. Reduce IT costs to zero
3. Renegotiate all your
contracts and stop all
retainers
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11. Financial Planning for this crisis
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Reduce Staff
1. Reduce excess staff and ask
the current team to increase
productivity
2. Cost reduction is possible in
any business if there is a will to
do it
3. Cancel all hiring plans unless
supercritical to your start-ups'
survival
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12. A dead company
cannot help anyone,
and this is a crisis that
no one saw, therefore,
whatever you do to
keep yourself afloat
is correct

13. Budget Planning
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This is the time to be a pessimist & stress
test your business plan!

14. Budget Planning
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Revenue Assumptions
Cost Management Investor Help &
Partnerships
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15. Budget Planning: Revenue Assumptions
July 2020 Revenues:
40% of Feb 2020 numbers
Growth Rate:
10% MoM growth
Best Case Medium Case Worst Case
Assume Zero revenues up to June 30th, 202011
July 2020 Revenues:
40% of Feb 2020 numbers
Growth Rate:
5% MoM growth
July 2020 Revenues:
25% of Feb 2020 numbers
Growth Rate:
5% MoM growth

16. Budget Planning: Cost Management
Cost
Management
One Mantra: Conserve cash at all costs!
The money you have must last
you 18 months, so reduce your
burn and ensure that your
company will survive.
Rationalize employee costs
from April 1st, 2020
• Execute steep salary cuts
at the top level, i.e.,
executive teams, etc
• Request employees to
submit the bare minimum
required for sustenance
• Unless there is a genuine
reason for an employee to
refuse a cut in pay – save
the livelihood of everyone
else that relies on the
company
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17. Budget Planning: Investor help and partnerships
• Ask for help
• Take all the help you can
• From everyone you can
• Most start-up founders are at home and
thinking of new avenues for sustenance –
reach out and create partnerships where there
weren't any earlier
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18. Ensure that no employee
goes to bed with an empty
stomach, without a roof over
their head or without
required medicines.
However, any employee
refusing to help the company
in a time of crisis is not going
to be with you in the long
run.
Protect those that will.

19. Fundraising
Anticipate
delays!

20. Fundraising
Timelines
Planning
Alternative Fundraising
Avenues
Bridge
Investments

21. Fundraising
Most funds have taken a moratorium on large ticket
fundraises until June 30th, 2020
• The partners cannot meet the founders which is a
prerequisite for most funds
• With almost no business to show, due diligence
timelines would get extended in the lockdown
Timelines
Planning
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Expect fundraising to heat-up from March 2021 if
the virus does not reappear in the winters

22. Fundraising
Alternative Fundraising Avenues16
17 Bridge Investments
Raise employee capital
• If your monthly salary outgo is ₹50 lakhs and you can save 80%,
i.e., 40 lakhs for 3 months, it is equal to ₹1.20 crores of funding
• Handout equity to employees willing to take a pay cut
• Reward your supporters handsomely for their sacrifice. These are
the most faithful supporters of your dream and your vision
Raise vendor capital
• The calculations are the same, but if vendors are willing to take
delayed, differed, or forgo payments – REWARD THEM!
• There are many avenues to raise bridge capital if your company
will not survive the full 18 months without an emergency injection
• Reach out to previous investors, angel syndicates, and early-stage
funds
• Do not focus on the valuation – focus on the survival

23. Remember 85% of ZERO
=
ZERO
When you think of valuations

24. Good Practices
This is a break away
from the normal but
not from your goal

25. Good Practices
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Do not relax after
budgeting and
cost-cutting
exercises
Create support
groups -
internally &
externally
Unlearn and relearn

26. Good Practices
Do not relax after budgeting
and cost-cutting exercises
Explore new business avenues
• This time is your opportunity to
innovate and find new
opportunities for business
Measure everything
• New business models will
emerge from the ruins of the
old. Keep a close eye on your
numbers and pounce on any
opportunity to grow
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27. Good Practices
Create support groups -
internally & externally
1. Create founder support
groups: Every founder is
hurting at this time so give all
the help you can give and take
all you can get
2. Create strong support groups
inside your company with your
critical employees so that you
are aware of their challenges
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28. Good Practices
With the daily time saved
from lack of commute, staff
meetings and sutta breaks,
use the time to:
1. Learn new skills
2. Read books you haven't read
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29. However, if, after all attempts, you might have to sacrifice a few
to save the rest – then do it.

30. Save the Dream
Your start-up is your dream and if your vision
is under attack, you must do everything you
possibly can to save it.
Hundreds, if not thousands of lives depend on
your company so you must save as many as
you can.
Those that understand what you are doing will
support and you must reach out to those that
are confused, scared, and disenfranchised.
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31. 31
Artha Venture Fund I
Contact Us
5, Surya Mahal, B Bharucha Marg, Kala Ghoda, Fort, Mumbai - 1
Registered with SEBI as an Alternative Investment Fund under Category 1
Vinod Keni
vinod@artha.vc
Growth Partner
Anirudh A Damani
aD@artha.vc
Managing Partner