The Art & Science of fund raising: (Seed to Series A)

L to R: Ketan & I with Karthik and Sanjay of Blume Ventures – Thanks for believing in Mettl

Capital is startup’s fuel. It helps them scale, build markets, build products and beat competition. Fundraising is a bit of art and a bit of science (90% art and 10% science). Some founding teams are able to do it more successfully than most others. It is said that fundraising is one of the two most important jobs of the founders (the other being hiring rockstars and gainfully absorbing them). The most successful startups that we see around are the ones where the founders have become fund-raising machines. Access to deeper capital have become a competitive advantage for companies. Therefore one needs to learn this important skill.

In Mettl’s context, we raised the following rounds of funding (in Nov 2018 INR to US$ terms)

  • Angel Round – 2010: ~70K US$ from angel investors (friends, family and beyond)
  • Seed Round – 2011: ~250K US$ from Blume Ventures and Dr Singh
  • Series A Round – 2012: ~3.2M US$ from Kalaari Capital
  • Bridge Round 2015: ~.5M US$ from M&S Partners (an inbound interest)

finally leading to an acquisition by Mercer in 2018.

We had our own share of hits and misses (more misses than hits). In 2014-15 we were running out of money fast. We really needed capital for our survival but no fund would touch us. We sensitised our team about the shit ahead. In our minds we were expecting many resignations but very few did. As what happens when a portend army faces tough challenges ahead – you are left with the toughest, bravest and most able ones. Which is why I maintain that Mettl had an incredible team and startup culture. But this topic for some other day. From 2015 our entire focus was on how to make our customers win. We turned profitable the subsequent year and from thereon. We started getting inbound funding offers (when we didn’t need any). We finally found our new home at Mercer.

Frankly, I am not the best person to write about how to fund raise. We couldn’t raise money when we needed it the most. Had we not learnt how to build and run a business through our own means we wouldn’t have survived. This article is just an attempt to document what I have learnt about fundraising in my journey which ended at series A level in 2012. Much has changed in terms of the fundraising environment but I believe the fundamentals are time invariant. It may be useful for new and budding entrepreneurs who may experience fundraising frequently in their voyage.

I have structured the process into the following articles that I will publish over time. Please do point out for any suggestions/ new viewpoints/ related topic that I should cover/ errors/ typos/ negative feedbacks (and positive ones too). With a word of caution, these are just my thoughts and there could be other better alternate approaches to fundraising.

  1. Thinking through your own business
  2. Creating the B-Plan
  3. Examples of some great B-Plans leading to successful fund raises
  4. Contacting VCs/ potential investors
  5. Making presentations to VCs/potential investors
  6. When successful: Negotiating terms in a term sheet
  7. Tough Luck: Building a bootstrapped business 

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