Continuing with our series on economic recession and startups – here is an interview with Ashish Gupta of Helion Ventures.
Early and start-up stage funding is getting difficult to raise – what would you suggest as sources of capital for someone who has not been able to so far raise funding
Angels are typically a big source of capital for seed investing.
For someone raising a series A round, what mistakes can they make in the current funding environment
This environment brings more caution and hence investors will be more sensitive to valuations, will be sensitive to people having made more progress and hence validation, burn will need to be kept low.
For someone raising a series B, what do they need to demonstrate to justify their valuation and funding needs.
How they are going to generate revenues, what will they do with the money (at the level of detail where one can validate a lot of the claims), execution plan that is thought through not just as “here is the product” but rather “here is the product, the sales strategy, and the marketing strategy”
VC investing goes through the fear and greed cycle and VCs often follow the herd. What are you doing in the current fear cycle – are you doing lesser deals, are you waiting/watching?
What will demonstrate that you are taking leadership in building India’s next generation of companies?
All investing goes thru the above cycles J else you would not have cycles at all. Leadership will be demonstrated by the same metrics – investing in companies that are building real businesses. Slower or faster is not necessarily a good metric because we look at things bottoms up and there are good companies at all times.
Have you have been through such a slowdown before and have invested in companies during such a slowdown that turned out to be huge wins for you? Please share.
In the year 2000 – invested in Daksh.
Which industries you are most bullish about?
We look at stuff bottoms up and that often is not aligned with industry views. That said, some industries that are interesting include education, retail services, mobile VAS.
Why do you think is now a good time to start a company?
its always a good time to start a company if one has identified a need that is very well defined and can be converted to revenue. The claim that downturns are a good time to start companies is a fashionable thing to say. It is the case that a lot of the “curiosity driven” entrepreneurs get weeded out in downturns. But that does not make it easier to build companies. In downturns pros are: more resolute people start companies, everyone focuses much more on expense and revenue and hence companies are built more tightly, fewer competitors start then. On the cons side for an entrepreneur, its harder to raise money, customers are less willing to buy because many paralyzed, exits become harder. So it depends on the particular person and company and is not a generic claim that can be made.