Startup Advisory
India is home to more than 100 unicorns. Most of these companies had early backers who believed in them and provided funds at an early stage. Today, those early backers are millionaires because they believed in those startups and risked their money.
Startup investing was earlier limited to a certain set of people, but that is no longer the case, it has been democratized.
Who should invest in startups?
According to us, people with high networth having a high degree of risk taking ability should consider investing in startups. Domain experts may also consider investing in startups from the same sector as they will be able to assess the risk better.
Why is startup investing considered risky?
In their quest to grow quickly, startups tend to burn a lot of cash due to which there is a constant need for funding. If the funding dries up, it becomes very difficult for the startup to survive. Hence, there is very limited capital protection in case of startups. If you invest in any other instrument, there is a high degree of principal protection even if partially, which is not the case in startups.
What is the typical investment size and investment type in startups?
The cheque sizes usually range from 5-10L per startup. The investments are mostly equity investments. There are debt structures as well where you receive regular coupon payments, but they are less popular as startups are generally starved for cash and adding an interest payment may not be the best idea.
How is Growthvine different from the other startup investing platforms?
Happy to take that one. Our team is made up of people with investment research experience across financial companies. We have been analysing businesses for than 10 years and are very conservative in our approach. Our experience and approach is what differentiates us. Our process is simple, we hunt for startup opportunities where we are able to trust the management, the business has a long runway for growth and the funding needs are not extreme.
What are some of the startup terminology so it is easier to understand their business?
CAC (Customer Acquisition Cost): This is the marketing spend that a company does in order get the customer on board.
ARR (Annual Recurring Revenue): This is the revenue which the company is making.
Cash burn : This is the net negative cash that a company is making every month. Say a company earns revenue of Rs. 100 a month, but is spending Rs. 120 in costs, then the burn will be Rs. 20 If startup investing excites you, contact us and become a part of India’s next leg of growth.
