Startup? Can You Figure Out If You Need An ‘Accelerator’ Or An ‘Incubator’?

Considering that the entrepreneur wave is at an all-time high the world over, the ecosystem too has been responding positively to keep up the tempo and give the rising trend a further boost. The fact remains that a majority of startups that are launched fail to survive past the crucial first year and the ‘great idea’ often dies with it. To better their chances of succeeding in the long run, they need handholding at various levels. They require mentorship and understanding of the business which can help them scale up. And to get the necessary support, they now haveangel networks, mentors/advisors and accelerators/incubators to count on.

Accelerators and incubators offer mentorship, capital, seed funding, tech, infrastructural support and everything else they need to build a strong and lasting foundation.  Though both accelerators and incubators serve as enablers for the startup ecosystem, it is important to understand how they differ from each other, so you know which way to go when you reach out for the necessary support.

A business incubator mentors and fosters a company completely in its initial stage by offering office space, business skill training, professional expertise and financial help; essentially offering the necessary advice and infrastructure for the business to stand on its own.

On the other hand, an accelerator plays a pivotal role post incubation and pre-VC funding to enable the startups to build scalability and healthy business metrics. Just like guiding a teenager is the most trying period for any parent, similarly, this stage is very crucial as most new ventures get stuck in the trenches of day-to-day operations and the need for guidance is far from over. In the midst of all the hustle-bustle, drawing up long term strategic plans (that are extremely critical to give a clear direction to the business), takes a backseat. Here’s where an accelerator comes into the picture. Its pursuit is to grow the size and value of a company as fast as possible, and prepare it for the initial round of funding.

Apart from this, the amount of time a company spends in an incubation program can vary widely, depending on a number of factors, but the period is generally longer as compared to an accelerator program, which typically ranges from a few months to a maximum of 1 year. So, while incubators essentially jump start your business and then kick you out of the nest; accelerator programs are more intensive and aim for the startup to raise venture capital fund at the end of the program and therefore, entrepreneurs who adopt this program for their company should understand that it will demand aggressiveness not only from them but also from their teams.

Moreover, some of the accelerators offer seed funding to the startups that come to them for the ‘run for investment program’ and also take a stake in the company. An incubator normally doesn’t offer any funding or take any stake in the company, but offers more of mentorship and shared resources (common office space and other basic infrastructure for startups etc.), without which taking the ‘entrepreneurship plunge’ can seem intimidating. Since most of the accelerators have a stake in the company, they do all-that-it- takes to ensure that the startups they are mentoring are successful, and just like the name suggests, they are able to accelerate the pace of growth and readiness for Series A funding for their startups.  In fact, a good accelerator would handhold a startup from start to exit.

Yet another differentiator is the fact that incubators have much smaller mentor networks as compared to an accelerator network where mentorship could be coming from more than 100 entrepreneurs who are affiliated with the accelerator. Most of them are successful CEO's or investors who are looking to fund the ‘next big idea/company’ or simply to help the local start-up community. They offer expertise in all areas related to a business – marketing, public relations, legal, strategy-making, engineering, accounting, operations and what not – everything that one needs to take the business to the next level.

The advice that one gets from the accelerator community is not philosophical but straight and clear ‘actionable talks’, because everyone there is interested to see the startup succeeding fast, very fast. This community works extensively on building a solid revenue stream for the company because that’s how they can prepare the startup to raise funds. Today investors in India are not just looking for a million-dollar idea or a power point presentation. Rather, they are interested in investing in companies that have already productized their ideas and have a revenue stream, i.e., they are looking for ‘real’ traction.

Reality checks are important for any company to know whether their business model is going in the right direction or not and an accelerator program is built to keep a continuous check on the company’s health.

Considering the immense support and value that both incubators and accelerators add to a startup at different stages in the early phase, there’s no denying that they make the journey far less bumpy for a startup. As an entrepreneur, if you are driven to ‘get it right’ the first time and better your chances of succeeding in the long run, all it takes is to reach out to a credible incubator or accelerator…Who knows, you might just be the next ‘Billion-dollar baby’ in the making! 

For More Details - http://www.ghvaccelerator.com/

Source : INC42. 

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Parameters overseas investors consider before investing in India

There is a constant buzz about India having become a hotbed for overseas investors, more so, since the BJP-led government took over the reins of the country in 2014. Add to it the fact that the ‘startup culture’ is at an all time high in the country with more students and corporate professionals jumping onto the entrepreneurship bandwagon than ever before. Given the scenario, there is little reason why investors wouldn’t be all wide-eyed, considering the number of unique and innovative business ideas springing up from across the length and breadth of the country; each of which offers them an opportunity to grow their money multifold. Also, diving into the Indian market gives the investors access to the burgeoning class of Indian Consumers, thereby creating deeper inroads for expansion.

But what is it that lures investors, overseas investors in particular, to put their money in a particular venture? In today’s article, I’ll decode the criteria that investors evaluate before finally taking the leap of faith and putting not only their money, but also time and experience, that will give the businesses the much-needed opportunity for a global footprint.

Image Credits : Shutterstock

These broadly include:

1. The overall economy/ governance of the country
2. Factors specifically related to deciding which business to invest in (this happens after the investors have already narrowed down their search to a particular country and sector
3. Overall performance of the economy – Amongst the foremost criteria that investors consider is the overall state of the economy of a country. No investor would risk putting their money in a country where the economy is on a downswing, owing to the uncertainty it places on their investments. On the other hand, an economy that had been consistently following the upward trend on the graph is likely to find favor with them.
4. Political stability – Political stability is yet another criterion that is important from an investment standpoint because the regulations and policies governing businesses change, every time a government changes. This can prove to be a big risk for investors, and one that few would want to take.
5. Ease of doing business – Long drawn processes for setting up and operating the business (in terms of completing the paperwork and getting the necessary clearances) can be a big put off for investors. They have no interest in wasting precious time in a system defined by red-tapism and would rather invest their resources where the government regulations and policies are ‘pro-business’. For instance, the Modi government has undertaken a slew of measures to change the long-standing perception of India not being a very ‘business-friendly’ country, and therefore, detrimental to the interest of investors.

Right from introducing a single portal for all businesses to getting the necessary clearances for setting up shop in the country (which will have an automatic escalation mechanism, and hence will avoid delays and corruption), to announcing huge initiatives like ‘Make in India’ and ‘Digital India’, the world is suddenly looking up and taking notice of India as a great investment opportunity. And the results are for all to see with several deals already having been signed with countries like Japan, Australia, US etc. and many others underway.

Other countries that rank high in terms of ease of doing business and have thriving economies include Singapore, New Zealand, UK,US, Finland, Hong Kong, Denmark etc.

4. Tax regime – The tax regime applicable to businesses are also important from an investor’s perspective. They would much rather settle for an investment in a country where the tax regime is business friendly instead of one where they constantly need to focus their energies on how to minimize their taxes rather than pursuing more significant business matters. Moreover, issues like retrospective tax that have plagued India in the past are a big dent on a country and are a sure shot way to ‘shoo’ away the investors.
5. Identifying the high growth sectors – After having assessed the government and economy-related criteria, the next thing that investors look out for is the high-growth sectors. They ideally prefer to invest in sectors that either find favor with the government (for instance, the current government is inclined to give infrastructure projects and renewable energy projects a big boost and is offering many sops to investors and entrepreneurs alike) or those that have been performing well consistently over the years or in sunrise sectors that offer great potential in the coming years (the ROI is high in such sectors because even a small investment can yield high returns in a relatively short span of time).
6. Choosing the right venture to invest in

Once the investors narrow down their search to a particular country and also a particular sector, the next step is to evaluate the options in terms of the companies that can yield the maximum returns for them. The vital aspects taken into consideration to arrive at the final decision include:

1. A unique and disruptive value proposition – In a market that sees new ventures coming up every day, investors are always looking for that one idea that stands out from the rest and has the potential to change the landscape of that domain.
2. Return on investment – There can be no better option for investors than to place their bets on a venture that has the potential to create disproportionate value within a relatively small timeframe as compared to other businesses
3. Passionate and driven management team – A great management team can accomplish a lot simply with their passion and drive. Investors look for these qualities as well as credentials of the management team to gauge how far they can take the business and live up to their promise. It is important that the management team has the capability to mobilize the funds and derive optimal resource performance; to convert the business plan into hard figures. They should prove their worth not just by coming up with winning strategies but also by executing them efficiently and effectively to get the desired output.
4. Business Scalability- Plausible investments occur when a business is anticipated to be a global performer. It is important for investors that the innovation or idea they are investing in is scalable and has the potential to grow across geographies, so it can reap the maximum returns.
5. Leveraging technology- In today’s era, technology offers a competitive edge to any business that uses it effectively. It gives businesses the cutting edge to accomplish their long-term vision faster and better and gives them a definite lead in the market. From an investor’s perspective, if they have to choose between a business running in a traditional manner and one that bases its operations and decisions based on technology, the latter will be a clear winner. After all, the effective use of technology is a common factor between all leading global companies the world over.
6. Exit strategy – Last but not the least, a clear-cut exit strategy is a crucial parameter, on which several businesses fail and investors reject even the most innovative ideas. Unless the company has a proper exit strategy chalked out, investors will not be interested in investing because that is the moment of truth for them; the stage where they get to encash the benefits they have reaped on their investment.

Conclusion:

Investing millions of dollars on a business is not an easy decision and the options need to be weighed very carefully. It requires that investors take the decision keeping in mind a host of factors related to the overall economy, high growth or high potential growth sectors as well as those related to deciding which company to put their money in.

Though certainly high risk translates into high returns when it comes to business, no investor would want to see their investment go in vain

Vikram Upadhyaya

Accelerator Evangelist, GHV Accelerator. Vikram is a Strategic leader and entrepreneur with a successful background of building and leading top performing teams focused on exceeding goals. Dynamic in orchestration of multimillion-dollar business start-ups, turnaround & growth ventures. Advanced communicator and cultivator of key relationships with all levels of personnel, clients, businesses, and executive managers. Big picture thinker, talented and driven to impact bottom line while ensuring staff compliance with enterprise standards, procedures, and regulations. Vikram is a visionary & an entrepreneur, holds 16 years of Indo-Japan Market Experience.

For More Details - http://www.ghvaccelerator.com/

Source : YourStory. 

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Leveraging technology for a competitive edge (ENTREPRENEUR INDIA)

If there is one thing in common amongst leading businesses across the globe, it is the fact that technology is an integral part of their overall business strategy.

I have always emphasised on the need for startups to clear the Concept of T.E.S.T. and POC to improve their chances of succeeding in the market. In my previous articles, I have already elaborated on three aspects of T.E.S.T., i.e., ‘Team’ and ‘Execution’. In continuation, I’ll be covering ‘Technology’ in today’s post.

There is no doubt that technology will drive the future. Be it our homes, workplace, or any other aspect of our day-to-day lives, technology will rule. In fact, it already does, its scope will expand further.

But what is it that has made technology an indispensable part of our lives? The answer is simple… it simplifies everything we need to do.

It is precisely because of this reason that businesses can benefit tremendously by integrating technology into everything they do, be it Operations, Human Resources, Finance and Accounting, Inventory, MIS, Supply Chain Management or Customer Management. Businesses that leverage technology are inherently more scalable than those that do not leverage technology across various functions.

Technology: An integral part of business

If there is one thing in common amongst leading businesses across the globe, it is the fact that technology is an integral part of their overall business strategy. It has enabled them to consistently derive the maximum value from within and deliver it to customers. It has enabled them to scale up and become the reckoning force that they are, across the globe. Consider names of leading companies across any sector and you will see a strong role of technology in their business strategy. Be it Google, Apple, Accenture, Proctor & Gamble, Unilever, Airtel, Vodafone, Microsoft, or Nestle, or even manufacturing companies like Samsung, Bajaj, Honda, etc.

Many entrepreneurs of startups and small businesses, even if aware of the advantages that technology offers, are usually wary of implementing it fearing the cost or inability to allocate people who can make the most of it. But time and again, it is proven that the pros far outweigh the cons and it will add tremendous value to the business in the long run. In fact, startups stand to gain significantly by integrating technology into their operations because their superior performance on various parameters on account of technology itself will act as a barrier for entry for other potential market players.

For a business, technology does much more than making things simpler. Overall, it helps improve the efficiency and effectiveness of an organization multifold across functions, which has a positive impact on its top-line and bottom-line. It ensures better speed and accuracy in operations and enhances the responsiveness towards operational and environment-related challenges.

Gaining a competitive edge

Whether you want to ensure better and faster communication through email, forecast market trends to come up with a winning strategy, track your inventory across multiple warehouses or generate the most complex MIS reports, that can take hours or even days to do manually, technology ensures that you can accomplish all this in a matter of just a few seconds.

Moreover, technology can help cut costs significantly by minimizing the manpower requirement and operational expenses and optimizing productivity. Ultimately, it is a company’s costs and responsiveness tothe dynamic market environment that serve as vital components in getting a competitive edge in the market, and this is where technology can make all the difference.

Technology complements all aspects of a business. While it is not technology alone that gives the business an edge, leveraging it to complement your efforts on all other fronts is what sets you apart and gives you an edge over others in the market. It can help you create a unique identity or value proposition and give you a lead over your competitors. Be it email, VoIP, cloud services, mobile technologies or social media, there are a host of technologies available in the market waiting to be tapped by companies.

The good part is that these technologies are now easily accessible and affordable and some of themcome absolutely free of cost, or at a very affordable cost in the SaaS (Software as a Service) model.

Leveraging the benefits of technology

As is the case with all functions in a business, it is the people within the organization who play a crucial role in leveraging the benefits of technology. Simply adopting technology just because others are doing it will be no good unless people are trained and retrained to use it effectively and optimally to give the business a competitive edge.

However, it is important to note that for a business it is not enough simply to adopt and integrate technology. Since newer and better technologies are emerging faster than ever, making the older ones redundant, it is equally important to identify the relevant ones and implement them sooner than your competitors, to not just ‘get’, but also ‘sustain’ your competitive edge.

For More Details - http://www.ghvaccelerator.com/

Source : EntrepreneurIndia. 

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T.E.S.T. your 'Execution' capabilities to build strong business foundation (ENTREPRENEUR INDIA)

This post is with reference to my previous articles on the Concept of T.E.S.T. and PoC and the importance of the first ‘T’ i.e., Team.

Like always, I reiterate my firm belief in the fact that startups that are well positioned on the T.E.S.T. (Team, Execution, Scalability and Technology) and PoC (Proof of Concept) criterion, stand a greater chance of tasting success.

Since I have already elaborated on T.E.S.T. and one of its vital aspects – ‘T’, i.e., TEAM – in the aforesaid links, today I will reflect on the next link in the chain i.e., “E” or EXECUTION.

“Without strategy, execution is aimless. Without execution, strategy is useless.” - Morris Chang, CEO, TSMC (a Taiwan based semiconductor manufacturing company)

This quotation pretty much says all that I want to convey in today’s post.

While most business leaders lay emphasis on strategy formulation or planning to build a strong foundation for the business, they often miss out on one key aspect that is instrumental in making plans materialize. And that is EXECUTION. Though planning plays a key role in any business, what is even more important is how, or rather, how ‘effectively’ those plans are executed. Even the best laid plans in a business stand to fail if not executed well.

A research by Dr Kotter, CIO at Kotter International, on this subject suggests that roughly only 5 per cent of all organisations succeed in implementing their strategies. A whopping 70 per cent of them fail in execution. The remaining 25 per cent are able to achieve only mediocre results on this front. The fact has been validated by several other studies.

This clearly reflects that companies currently undermine the importance of execution, not realising that building strong execution capabilities can help them acquire a competitive edge in the market, which can benefit all its stakeholders in the long run.

While developing a strategy or long term plan is considered to be a humongous task; and one that will decide its fate in the long run, the real challenge lies in executing it and bringing the strategy to fruition. This is where the real investment in time, effort and resources actually happens. And this is the stage where companies usually stumble.

Talent: An Important Tool

Talent is a critical tool that can be instrumental in effectively bridging the gap between strategies and the actual outcome by way of execution. Hiring people with the right knowledge, skills, competencies and experience and upgrading these skills from time-to-time, as the market demands, is therefore vital to building strong execution capabilities for an organisation. Moreover, a culture of meritocracy and an effective reward and recognition programme can further help motivate and retain talent and bring out their optimum potential, which can boost the overall execution capabilities of the organization.

But, that’s not all. While the senior management in most organisations usually focuses on drawing up strategies that can give them an edge in the market, the execution is usually delegated to the teams. To draw out the best capabilities of people who will actually be executing the plans, what is most important is that the plans are clearly communicated and understood not just by the core team, but, by every single employee who will work on making them a success.

A study by Harvard Business Review reveals that 95 per cent of employees do not understand their company's strategy? In that case, how can the companies expect them to execute the plans? Plans, therefore, need to be clearly and precisely formulated and communicated to everyone within the organisation. Also, while their execution may be delegated to the teams, the actual responsibility and accountability ought to rest with the senior management to ensure successful implementation.

Since strategies or plans are usually devised for a longer period of time, for them to be easily comprehensible by everyone, they need to be broken down into small term ‘SMART’ goals (i.e., Specific, Measurable, Achievable, Realistic and Time-bound goals), so that every single person understands exactly what is expected from them in terms of performance to be able to effectively contribute to realizing those goals, and therefore, the long term plans.

It will also ensure that the communication that percolates down is consistent and no game of ‘Chinese Whispers’ comes into play, thereby leading to filtering or misinterpretation of the information or plan. Effective communication of the plan therefore ensures that all efforts are directed towards a common goal, thereby maximizing the impact of execution.

Monitor the Progress

The next step then is to monitor the progress against these goals to know the current position viz-a-viz the actual target. Unless a proper tracking mechanism in place, it’ll be difficult to track the deviation from the actual plan and take corrective action.

Also, what is important to note is that planning and execution are both interdependent on each other. While planning provides the basis for execution, it is important to take inputs from those involved in execution to understand the ground realities and undertake course correction, if required, to address the dynamic market environment. The more these two functions work in tandem with each other, the better competitive advantage a company can enjoy because of its ability to quickly adapt or respond to market conditions. This is what will set it apart from others and put in on the course to success.

For More Details - http://www.ghvaccelerator.com/

Source : EntrepreneurIndia. 

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Sectors luring investors interest in 2015 (ENTREPRENEUR INDIA)

The Indian market has been flushed with investments in recent times. This is great news for entrepreneurs or aspiring entrepreneurs from various sectors, as this seems to be just the beginning of what lies ahead.

With innovative ideas ruling the new-age businesses, investors across the globe are confident of what the Indian market has to offer and continue to lookout for the next big disruptive idea that has the potential to change the market and be a game changer.

The first level of disruption has already taken place and created a stir in the market. Whether you talk about eCommerce ventures such as Flipkart and Snapdeal, Taxi aggregators like Ola Cabs and Uber, Healthcare disruptors like Practo or Online Restaurant guides like Zomato, each of them has proved to be a huge disruptor in the sector that they operate and left a lasting impact – an impact that has changed the market forever and lead to an evolution of that sector.

However, it is the next level of disruption that now has the investors keeping a keen eye on the Indian market, regardless of the sector. For instance, with mCommerce, an extension of eCommerce, is gaining in terms of popularity. The market will see yet another shift and give a big boost to the mobile apps market.

Then there’s the Internet of Things (IoT). The market is primarily driven by hi-tech gadget lovers across the world. The domain includes breakthrough technologies like Google Glass as well as others that allow your door to unlock using facial recognition or your AC temperature to adjust automatically to your comfort level once you enter your room. These technologies are here to stay because of their growing demand among the discerning customers, who want nothing but the best for themselves, and are sure to be a favourite with investors in the coming years.

As for 2015, going by the recent trends, frugal innovation seems to be yet another favourite buzzword for investors. Be it smartphones, cars or household items like detergents and soaps etc., market leaders as well as startups are slowly realising the importance of frugal innovation and adopting it as an important part of their strategy to get ahead of competitors in the market.

It is the key to building sustainability for a product, service or brand. Frugal innovation means not just doing more with less, but rather, much better with fewer resources. It is all about integrating affordability, quality, simplicity as well as sustainability. Companies are increasingly working on how to improve their effectiveness and get better results with fewer resources and offer better value to their customers.

For example: In 2010, under the aegis of Paul Polman, CEO, Unilever, the company undertook the huge challenge of doubling the company’s revenues to 80 billion euros, while simultaneously halving its environmental impact by the year 2020. Ever since, it has built in sustainability and social inclusion into the core of its operations. The efforts have helped Unilever in building up and strengthening the frugal innovation engine that can help profitably serve 4 billion customers across the globe by 2020 in a socially and environmentally responsible way.

What investors primarily look for when they identify such disrupting business ideas is their long term sustainability and scalability. A high growth potential within a definite time frame is yet another prerequisite for attracting investors. Ideally these business should be growing or have the potential to grow faster than its competitors in the market and follow a steep, hockey stick growth curve.

In addition to the above, I believe that a business that clears the unique evaluation criteria of T.E.S.T. and POC (T.E.S.T. refers to Team, Execution capabilities, Scalability in the business model and Technology, while POC refers to Proof of Concept) stands a greater chance of receiving Stage A funding, which can be crucial for the future of the business.

To elaborate on the T.E.S.T. criteria, no business can succeed in the marketplace unless there is a great team in place, with right skills, capabilities and experience to lead others. An ideal team is also in a better position to execute and implement the business plan and give shape to the business. A great team needs to be backed with a great business model and technology that makes the business sustainable and scalable.

Similarly, POC or Proof of Concept refers to a test that proves that the hypothesis about the business concept has been proven. It could be a hypothesis around a technology innovation, service, value proposition, price-point, business model or anything that needs to be proven or demonstrated.

Most businesses that have a successful product or service believe that they have a successful POC. But POC ought to go beyond that and should include testing all aspects of a business that are vital for its success.

For instance, are you able to produce the product or deliver the service at a cost that is financially viable? Do your prospective customers see the value of the product or service, and are they willing to pay the price that you expect them to pay? In short, POC is about validating the commercial viability of the business. That is because planning different aspects of a business is as important as the actual innovation, product or service itself.

Any business that successfully meets the aforesaid parameters is sure to grab investors’ interest and there’s no stopping them thereafter.

For More Details - http://www.ghvaccelerator.com/

Source : EntrepreneurIndia. 

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Why due diligence is important for entrepreneurs (ENTREPRENEUR INDIA)

In today’s complex business and financial environment that has witnessed several companies, including some of the most trusted names in the business, compromise on integrity and getting caught under the net for fudged accounts, with the intent to siphon off money and evade even the best scrutiny, it is increasingly important for investors and buyers to insist on a thorough due diligence before making the final move.It is critical for a buyer or investor to know about the financial or legal health of the company they are planning to buy or invest in. Due diligence is a vital tool, based on which investors/buyers gauge the effectiveness of corporate governance and make up their mind on merger or acquisition, after validating whether the assumptions and assertions made by the company are true and fair.

This critical step is what enables the interested parties (buyers or investors) take that leap of faith. It is through due diligence that they can check for any unknown issues, which should have been brought to their notice earlier and evaluate the growth prospects of the company. These important inputs help decide whether the investment or acquisition will be worthwhile or not.

In several cases, where issues are uncovered during the due diligence process, companies are told to put them right before any further moves are made by the investors.

What do investors look for in the due diligence process?

First and foremost, investors need to know beforehand about the company's current and projected financial details, organisation information, market size, team structure and level of competence, potential to compete in the market and future growth prospects.

These are the key areas of interests for Venture Capitalists. They also want a perusal of all stockholder communications, customer and supplier agreements, credit agreements and loan/debt obligations, partnership and joint venture agreements. From a legal perspective, it is important for them to know the structure of the company, staff headcount and cost, further requirements in staff to grow the business, and liabilities and lawsuits if any.

Any conflicting claims already made, hidden or unresolved problem areas cropping up during the review will put a halt to any further progress with the investor. Any missing or incomplete information, missing signatures on contracts or facts that arise, which are inconsistent with previous claims or discussions, undisclosed debts and liabilities, will raise all the red flags with an investor and put a halt to further movement in the process unless resolved and clarified.

That is why it is important to ensure that all these necessary documents are well organised and ready to produce as and when required during the process.

Moreover, the company must have detailed presentations together (factually correct and on time) prepared by various teams, giving a detailed overview of that respective function or department to ensure that the right information is shared with the investors and any queries or doubts addressed. Also, the business should keep all lines of communication open with the investors and immediately act on clarifications sought with factual explanations.

Importance of a legal advice

A good legal team can prove to be immensely useful to manage the due diligence and securities offerings and in making the right pitches to the investors.

After the basic information sharing, assimilation of facts and verification of the same is over; the investors will rectify the problem areas, if any. While some problems can be addressed and corrected, others may be beyond the control of business, hence difficult to resolve.

In such case, investors might insist on making changes to the transaction documents, they might adjust the bidding price for the business, the shareholding structure, or investor rights and responsibilities.

It is only when these issues are settled, the due diligence process will be completed to the investor’s satisfaction, which in turn will help the transaction follow through to the signing stage.

Thus, due diligence help investors to get an accurate view on what the company has done so far and how it might fit into a broad portfolio or investment strategy. For an investor, this research helps them from missing something that could be vital to their decision-making process. What was once a short and rather perfunctory process has now grown into a highly detailed and quantitative process offering insight into the future prospects of business.

Though there is no one formula for this process, businesses that understand the criticality of this process and its components are certainly at an advantage, when it comes to attracting investments. They can leverage it as a stepping stone to a bigger and brighter future.

I highly recommend that companies keep this in mind, even as they are just starting up. With good legal advice, keep the records clean right from the beginning. This will save any problems at a later stage and also the aftermath of cleaning up process.

Conclusion

For Investors Due Diligence to be a cakewalk, the entrepreneurs need to have self-discipline in maintaining the records of the venture, such as daily operations documents and details. It is always good to split the responsibilities amongst the Co-founders for recordkeeping and timely reviews. This not only helps the entrepreneur to keep the due diligence outcome positive, but also ensures that they have daily data on their fingertips.

To sum up, the top 10 priority tasks every entrepreneur should religiously follow, irrespective of the stage of the venture, in order to ensure complete compliance for Investors Due Diligence:

1. Do Indexing of all the signed documents and official records
2. Keep the records at one safe place
3. Label your files with color codes and time stamping
4. Do regular and frequent board meetings
5. Review all the pre-decided agenda one by one and check if the documents are in place
6. Entrepreneurs should know the financials and record them
7. Interact with your Legal Advisor/CA or the financial consultant on regular intervals
8. As early stage Entrepreneurs, you might not be perfect in processes, but be honest in your data and remain transparent
9. Never ever hide or fudge your data from your investor, because you think it’s not worth sharing.
10. Last but not the least; never be ‘Penny Wise Pound Foolish.’

For More Details - http://www.ghvaccelerator.com/

Source : EntrepreneurIndia. 

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With the ‘Uber’ Syndrome Catching Up, Indian Startups Should Gear Up Big Time! (IAMWIRE)

A large country like India, and one with several infrastructural challenges, offers some unique opportunities for innovators. One such opportunity area is security & safety. The Uber case that took place in December 2014, brought into focus the need for solutions around safety & security.

A technology startup headquartered in San Fransico, Uber connects passengers with taxi drivers in 200 cities across 53 countries and enjoys a valuation of over USD 40 billion just about 6 years into its inception. The success story of Uber would have been a commendable one had the Company not become synonymous with flouting safety regulations and indulging in unfair business practices in order to make a quick buck, thereby leading to legal tangles in several countries where it operates.

Unfortunately, over the past few years, there has been a rapid increase incases of sexual harassment and assault, economic harassment (e.g. not paying daily wages in time or in full), murders, etc. in India. Women and senior citizens are particularly vulnerable.As a result, safety has become a prime concern for both, individuals and the government. Going by the incident of the rape of a woman executive in an Uber cab by its driver in Delhi, the company cannot escape the liability by virtue of the fact that it is only a cab aggregator and does not directly operate any taxis. It is ultimately a taxi services company, albeit an app-based one, and therefore cannot shirk the responsibility of ensuring the safety of passengers who hire a cab through them.

In fact for any business where customer security is involved, it should be built into the core of the operations rather than going the Uber way and resorting to shortcuts to achieve growth targets. As a result of this fiasco, all app-based cab services were banned in Delhi citing security issues. The ban will be lifted only if they agree to follow the rules meant for Radio Taxis.

Where Can Startups Innovate

While the government has to take necessary steps to ensure that it is able to keep the citizens safe & secure, it is not going to happen in a hurry, as India is too vast a country for the government or public infrastructure or policies or resources (security agencies, police etc.) to address these issues immediately.

And this is where I think that technology-enabled solutions can contribute significantly, in making India safe & secure. Innovators are already thinking of how to address security issues using technology. Some of these innovations could be in areas related identity verification; databases of track records of publicly accessed private individuals (e.g. cab drivers); performance and compliance tracking; reporting; alarms & alerts etc.

Software, as well as hardware products can create solutions across different types of cases, and the scale of the opportunity provides opportunities in India for tremendous cost-efficiencies to make these solutions affordable.

Biometrics and digital identity technologies are now commercially available, and inexpensive to use as one of the platforms for safety and security solutions.

Some of these solutions could be company specific (e.g. Uber or OLA may use a proprietory tool or process solution for due diligence on drivers and tracking), while a number of these solutions can be managed by third-party innovators/entrepreneurs who can offer their solutions as a managed-service offering.

Think about it. India is a developing country with a population of 1.2bn. We have 925mn mobile phone connections and a smartphone penetration of 350mn. Our GDP is 1.87tn USD and is expected to go to 3tn USD by 2020. The size of the market opportunity is large. One effective solution can make a whole world of difference to people who no longer feel safe outside their homes (or even inside). Moreover, India has the capability to create and outdo many such ‘Ubers’, keeping the integrity of the system intact.

We believe that the opportunity is real, the opportunity is NOW and the problems need to be addressed. And we also firmly believe that only technology innovations can address some of the major challenges related to security at the scale and speed at which we need to address them.

Here is what Startups can do, to avoid getting ‘Uberised’ –

• Have tech-enabled processes in place, to ensure accountability. And make it a norm. This can be critical for future collaborations
• Regular mystery audits to ensure compliance by even the ground staff
• Legal compliances and processes to ensure interest protection and liabilities of not only your company, but all stakeholders
• Gauge the risk factor – from your point of view AND also from the customers
• Have an escalation matrix, whereby customers can connect directly with you

For More Details - http://www.ghvaccelerator.com/

Source : IAMWIRE. 

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Why Intellectual Property is critical for startups (ENTREPRENEUR INDIA)

When entrepreneurs embark on that unique business idea that they have no doubt would be a commercial success in the market, their prime focus initially is how to actually start giving shape to the venture. In the midst of numerous things that go into building a startup from scratch, the word ‘Intellectual Property’ (IP) is often not their priority. And even if they consider IP protection, it seems too expensive a proposition for a startup to act on.

But what entrepreneurs should remember is that assessing IP implications is not just about protecting the work you are doing. It is also to check if someone else has an IP for similar work. Often, there could be others in different parts of the globe working on a similar idea, which you may not be even aware of. What will happen if you find out one day that someone else has already patented that idea or product or solution that you have painstakingly developed?

Importance of IP protection

In today’s competitive and dynamic environment, IP can be a unique selling proposition (USP) of the product or service, and it helps create a sustainable and defensible differentiator for the company. By owning IP, a high entry barrier is created, thereby helping you to grow your venture faster with respect to your competitors’ offerings. Note - IP is always given high weightage by the investors and creates good value for your venture.

IP has, in fact, been identified as the key ingredient for startups across the world to get a competitive advantage in the market, according to the Start-Up Genome Project that aims to map, model and analyse what it takes to make startups tick.

IP assumes even greater significance for technology startups, where new innovations are being made every day. There is a huge brand value attached to IP, in both the manufacturing and technology sector. It gives investors, clients, and other stakeholders a tremendous sense of confidence in your commitment and passion to not just succeed, but also become a market leader in your area of operation.

There are essentially three ways in which a startup (or any other organisation) can protect its intellectual property (i.e., the idea or concept/ product/ process/ associated symbols, logos etc. that define the brand), namely, through:

1) Patents
2) Trademarks
3) Copyrights 

Intellectual property is, in fact, an asset for its owner and has a commercial value attached to it.

Payal Chawla, Founder, Juscontractus says, “Protecting IP requires thought and strategy. A novel technological innovation, like Tetrapak, would be worth protecting through a patent, which can be very expensive. In certain situations, it may be possible to seek a trademark protection or simply protect through a trade secret. This can be done through investing in marketing, and creating a recall between the owner and the product. The point is - there are different strategies available for different goals. Intellectual property can be very valuable. It is not unknown for a brand to be three times the turnover of a company. IP, if correctly and strategically protected, can take the valuation of a company to a completely different level.”

Also remember, if someone else happens to do so before you, then you are likely to be pushed out of the game (even if you had started working on the idea first), lest you are found guilty of patent infringement or copyright violation.

Companies can even leverage these patents as a means to further boost their revenues through licensing. For instance, Ford and Toyota have both bought licenses from Paice LLC to use its patent covering hybrid cars.

In summary

While startups are constrained by a paucity of funds when it comes to protecting intellectual property, what is important is that they should still continuously work on identifying IP and at the same time consciously work on setting aside funds to protect IP.

Since international patents may prove to be expensive at this stage, a good start would be to apply for a domestic patent/trademark/copyright. As the company scales up, it can set aside a budget for patent/trademark/copyright in the international market. Failure to do so can affect the company’s prospects to scale up.

It’s not just at the startup stage that IP is important. Businesses are constantly reinventing and redefining themselves in today’s day and age, where change is the only constant. This means greater focus on innovations, which in turn, means a greater need to protect IP.

The importance of IP cannot, (and should not) be undermined by startups, and established companies alike, because of the long-term sustainable advantages it offers.

For More Details - http://www.ghvaccelerator.com/

Source : EntrepreneurIndia. 

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