This document provides advice for entrepreneurs seeking investment from investors. It discusses common risks entrepreneurs face like failure and emotional challenges. It emphasizes the importance of learning, especially by getting hands-on experience. Sources of early funding include bootstrapping, friends/family, and customer payments. The document warns against common mistakes like unrealistic valuations and bluffing. It provides tips for fundraising including generating multiple ideas, sharing for feedback, and proving traction with paying customers. Overall, the document offers guidance on preparing a startup for investment through diligent planning and execution.

1. What an Investor wants
an Entrepreneur to
know
Dr Aniruddha Malpani
www.malpaniventures.com

12. Risks
• Be prepared for failure
• Learn to be resilient
• Can be a great journey - will
teach you a lot about yourself –
and about the world !

13. Lonely journey
• Lots of emotional angst
• Hard to convince your family that
you want to chuck up a safe job !
• Need to find support
• Other founders are the best source

14. The role of mentors and
coaches
• Mentor vs Consultants - big
difference !
• Incubators
• Accelerators
• Many parasites in the startup
ecosystem
• Advisory board

18. Key ingredient for success – Learn!
• To sell. Learn to tell stories
• To lead a team
• Get your hands dirty
• To be patient and persistent
• Work in a startup – the best way to
learn a lot very quickly !

19. Sources of funding
• Consultancy
• Job
• Bootstrapping
• Family and friends
• Customer-funding
• Crowd-funding
• ICOs

20. Ideas, Implementation and
Funding
• Ideas are a dime a dozen. Don’t fall in
love with your ideas – most are bad !
• Generate lots of ideas ! This improves
your chances of stumbling on the right
one
• Don’t worry anyone will steal your
ideas. Share them and ask for criticism,
so you can polish them !
• Passion is necessary but not sufficient

22. Common mistakes
• Ask for a NDA
• Use DCF for valuation
• Try to bluff
• Refuse to accept criticism and
feedback
• “ Wannabe entrepreneurs”

23. Red flags
• Only an idea, with no
implementation
• Hockey stick curve for revenue
• “ No competition”
• No skin in the game
• Too many buzz words, such as AI
and ML

25. Due Diligence
• Pre-negotiation
• Due Diligence Checklist
• Negotiation
• Term Sheet

26. Funding
• Negotiation
• Valuation
• Control
• Our preferred option - CCPS

28. Legalese
• Term sheets
• SHA
• Focus on areas of agreement
• Use standard templates
• Find a startup friendly lawyer

29. Whom do I fund ?
• Fall in love with the team
• LOI vs ROI
• Integrity
• Curiosity
• Humility
• Willing to teach – and to learn
• Paying customers

30. Bootstrapping
• Proves you can implement !
• Shows faith in yourself ! If you don’t
invest in yourself, why do you expect
investors to ?
• Guerilla marketing
• Your customers are your best source of
funding !
• If you can get paying customers, the
investors will follow !

31. Smart money vs dumb
money
• Not all investors are the same
• Do your homework before
accepting funding
• Treat the money with respect –
raising funds means taking on lots
of responsibility

33. Pearls of wisdom
• Beware of investors :
– asking how much return you can give to them
– not respecting your time
• Don’t push-sale your company, get investors
to come to you
• Follow up till investors give you an answer. If
it’s a No , ask why they rejected you
• Learn to negotiate - Don’t be too rigid and
don’t be too flexible

34. Pearls of wisdom
• Raising funding is no validation for a business
– only repeat paying satisfied customers are
• Don’t fall in the trap of vanity metrics
• “No”s are not a personal rejection . Think of
them as being a lack of meeting of minds
• Don’t compare yourself with the unicorns –
they are outliers !

35. Angels vs VCs
• Angels invest personal money. Come in all
shapes and sizes, because they have different
motivations
• When did they sign their last cheque ?
Interview their founders
• VC structure – GPs and LPs
• Institutional imperative – decision making by
investment committee

36. Bitter truths
• Most startups fail
• No one knows which startups will fail
• It’s a numbers game
• What goes up usually went down first
• All companies always need more money