Venture Funding Guide for Startups - India Region

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  1. 1. Venture Funding Guide ! for Startups - India! ! Autumn 2014! Alps Venture Partners!
  2. 2. 2pageALPSVENTUREPARTNERS Contents Execu3veSummary VentureCapitalFirms MajorVCPlayersinIndia ApproachGuidance Valua3on101 Methodologies OurServices ComprehensiveVCList 1 2 3 4 5
  3. 3. 3pageALPSVENTUREPARTNERS Executive Summary We are pleased to present our rst edi3on of Venture FundingGuideforStartupsIndiaRegion.Thisisatoken ofourconstantendeavortohelpsmallandmediumscale rms reach their true poten3al by exploring ways of mentorship,expansionandfunding. Since the beginning of decade, India has made huge progress and catapult its status to be one of the best emerging investment regions in the world. As per Interna3onalBusinessTimes,Indias3,100startupstoday makethecountrythethird-largestbaseofstartupsinthe worldbynumberofstartups,behindAmericaandBritain. Indiaisalsothefastest-growingstartupdes3na3on,adding about650startupsin2013andmorethan800thisyear, accordingtoNasscom. In the Autumn Edi3on we present to you the comprehensivelistofVentureCapital(VC)rmsinIndia, which will help you in great length to iden3fy the appropriate VC to pitch for. Further we have provided resources to prepare Investor Pitch along with Valua3on Basics to understand the methodologies to value companies in a beer way. Please share your feedback whichwillbeveryusefulforustohelpyouinabeerway. In upcoming edi3ons we will further cover more rms, more concepts and resources on funding, valua3on and pitching. BestRegards, AlpsVenturePartners
  4. 4. Venture Capital Firms ! Major VC Players in India! !
  5. 5. 4pageALPSVENTUREPARTNERS Helion Venture Partners Industries: Outsourcing, Internet, Mobile, Technology Products, Retail Services, Healthcare, Education and Financial Services. Helion Ventures Partners is a $605 Million India-focused, early to mid-stage venture fund, investing in technology-powered and consumer service businesses. It invests between $2 million and $10 million in each company with less than $10 million in revenues. The firm also participates in future rounds of financing in syndication with other venture partners and seeks a board seat in its portfolio companies. It prefers to exit its companies through public market listing, strategic sales, or transfer the stake to another private equity firms. contact@helionvc.com +91 80 4018 3333 +91 124 461 5333 Portfolio Companies
  6. 6. 5pageALPSVENTUREPARTNERS Accel Partners Industries: Infrastructure, Internet & Consumer Services, Mobile and Software & Cloud-Enabled Services Founded in 1983, Accel Partners has global presence in Palo Alto, London, New York, China, and India. They typically make multi-stage investments in internet technology companies. The firm considers investments between $0.5 million and $50 million in its portfolio companies. It seeks to take a minority stake in the portfolio companies. Portfolio Companies siliconvalley@accel.com +91 80 4123 2551 +91 80 4353 9800
  7. 7. 6pageALPSVENTUREPARTNERS Industries: internet and software sectors, data infrastructure, biotechnology, mobile application, telecommunications equipment, media, consumer internet, research and development, mobile, Blume Venture Advisors is a venture capital firm specializing in early-stage seed, start-ups, pre-series A, series B, and late stage investments. The firm prefers to invest in 80 percent in technology ventures and 20 percent in alternative technology sector including clean technology and robotics. It provides seed funding between $0.05 million and $0.3 million in seed stage and doubles its investment size where it co-invests. The firm also makes follow-on investments to its portfolio companies, ranging between $0.5 million and $1.5 million. It seeks to co-invest with angel investors, syndicates, and venture capital firms. The firm also provides mentoring and support to its portfolio companies. Portfolio Companies https://www.linkedin.com/ in/karthikreddyb Blume Venture Advisors
  8. 8. 7pageALPSVENTUREPARTNERS Sequoia Capital India Industries: Consumer, Energy, Financial, Healthcare, Outsourcing, Technology Sequoia Capital India is a venture capital firm specializing in investments in startup, seed, early, mid, late, expansion, public and growth stage companies. The firm prefers to invest in the information technology companies with a focus Portfolio Companies +91 80 4124 5880 +91 22 4074 7272 +91 11 4956 7200 on the emerging India-US cross border companies. It seeks to invest between $0.1 million and $100 million in its portfolio companies. The firm invests between $100,000 and $1 million in seed stage, between $1 million and $10 million in early stage, and between $10 million and $100 million in growth stage companies. It prefers to act as the lead investor in most transactions.
  9. 9. 8pageALPSVENTUREPARTNERS Nexus Venture Partners Industries: Technology, consumer and business services, media, energy, agribusiness, outsourced services, Internet, rural sector, cloud, storage, infrastructure, big data analytics, data security, and mobile. Nexus Venture Partners is a venture capital firm specializing in start-ups, early stage, and early growth stage investments. The firm typically invests between $0.5 million and $10 million in early / early-growth stage companies. The firm also invests up to $0.5 million in their seed program. Portfolio Companies +91 80 4945 6600 +91 22 6626 0000 The firm also participates in follow-on investments at later stages for companies that successfully execute their business plans. The firm can do multiple rounds going up to $20 million. It takes minority stake that varies from 20 per cent to 40 per cent. The firm prefers to take a board seat in its investee companies and do not seek to control or manage the company they invest in. plans@nexusvp.com
  10. 10. 9pageALPSVENTUREPARTNERS Inventus Capital Partners Industries: Consumer, Hotels, Restaurants and Leisure, Media,, Internet and Catalog Retail, Healthcare, Information Technology, Technology Hardware and Equipment, Telecommunication etc. Inventus Capital Partners is a venture capital firm specializing in early seed phase, seed-prime, series-A, startup, early stage, mid venture, and early- growth investments. The firm does not invest in capital intensive companies like semiconductor. It typically leads the first venture round with $1 million to Portfolio Companies +91 80 4125 6747 $2 million and invests from $0.25 million up to $10 million as businesses grow. The firm seeks to acquire a board seat in its portfolio companies. Inventus Capital Partners was founded in 1993 and is based in Menlo Park, California with an additional office in Ebene, Mauritius and Bangalore, India. mangala@inventuscap.com
  11. 11. 10pageALPSVENTUREPARTNERS IDG Ventures Industries: Digital Consumer Internet, Mobile, Media and Technology Enabled Consumer Services; Enterprise Software SaaS, Software Products and Enterprise services; Engineering Medical Devices, Clean-tech and IP-led Businesses IDG Ventures India is a venture capital firm specializing in startup, early stage and growth stage and expansion stage companies. It primarily invests in companies based in Portfolio Companies +91 80 4043 4836 +91 11 3019 4145 India but also invests in companies outside India that want to leverage India as an offshore resource base and/or want to drive significant sales revenue from the Indian market. The firm typically invests between $0.5 million and $10 million. IDG Ventures India was founded in 2006 and is based in Bangalore and Delhi. contact@idgvcindia.com
  12. 12. 11pageALPSVENTUREPARTNERS Canaan Partners Industries: Technology- Advertising & Marketing, Big Data/ Cloud, Consumer, Enterprise/SaaS, FinTech, Hardware; Healthcare Biopharma, digital Health & MedTech. Canaan Partners is a venture capital firm specializing in all stages of development, seed financings, start-ups, growth and early stage investments, typically Series A and B financings. +91 124 4301841 It seeks to invest globally with a focus on Asia including India, Israel, and United States. The firm typically invests between $0.05 million to $80 million in its portfolio company. It prefers to exit its investments within seven to 10 years. IDEA@canaan.com Portfolio Companies
  13. 13. 12pageALPSVENTUREPARTNERS SAIF Partners Industries: IT, ITes, Industrials, Financial Services, Internet, Consumer Product, Mobile SAIF Partners is a private equity and venture capital firm specializing in incubation, seed, early-stage, late stage, and growth capital investments. The firm invests organically and through acquisitions. +91 124 496 5500 The firm typically invests between $10 million and $100 million, in one or more rounds of financing, with investments between $200,000 to $500,000 in early stage companies, and between $30 million and $35 million in more mature unlisted ventures. For public market transactions, investments start at about $10 million. It seeks to obtain a significant minority equity ownership position in the range of 10 percent to 40 percent of a portfolio company along with a seat on the board of directors. info@saifpartners.com Portfolio Companies
  14. 14. 13pageALPSVENTUREPARTNERS Approach Guidance Before contacting the VCs, you have to articulate your idea into a Investor Pitch or Business Plan and assess the value of your firm through a Valuation. The three important prerequisites are: ARTICULATETHEIDEA Ar3culatetheIdeaintoa workable plan, future expansion, product d e v e l o p m e n t requirementsetc. 1 VALUATION AssessmentofPre-Funding Valua3onofcompanybased onfutureexpansion,current scenario,industryetc. INVESTORPITCH Prepara3on of Business Plan,Promo3onMaterial, Iden3ca3on of VCs, contactmailetc. 2 3 SequoiaGroove:FoundershelpingFounders HBS:EntrepreneurshipResources USSmallBusinessAssocia3onResources
  15. 15. Valuation Approaches and Illustration TheScienceandArtbehindValuingyourCompany
  16. 16. 14pageALPSVENTUREPARTNERS Approaches and Methodologies MARKETAPPROACH GuidelineCompaniesMethod GuidelineTransac3onsMethod BacksolveMethod COSTAPPROACH BookValueMethod Replacement/NetRealizableValue/ Reproduc3onCostMethod INCOMEAPPROACH DiscountedCashFlowMethod Approach INCOME APPROACH MARKET APPROACH COST APPROACH
  17. 17. 15pageALPSVENTUREPARTNERS Income Approach The income approach recognizes that the value of an investment is premised on the receipt of future economic benefits. These benefits can include earnings, cost savings, tax deductions and the proceeds from disposition. Discounted Cash Flow Method (DCF Method) is a form of the income approach that is commonly used to value businesses or equity interests. Market Approach The market approach assumes that companies operating in the same industry will share similar characteristics and the company values will correlate to those characteristics. Therefore, a comparison of the subject company to similar companies whose financial information is publicly available may provide a reasonable basis to estimate the subject companys value. Cost Approach The cost approach considers reproduction or replacement cost as an indicator of value. The cost approach is based on the assumption that a prudent investor would pay no more for an entity than the amount for which he could replace or re-create it or an asset with similar utility. Generally Accepted Valuation Methodologies I M C
  18. 18. 16pageALPSVENTUREPARTNERS Enterprise Stages Stage Description I No Product Revenue and limited expense history with, an incomplete management team with an idea, a plan, and possibly some initial product development. Typically, seed capital, or first-round financing, is provided during this stage by friends and family, angels, or early stage venture capital firms. II No Product Revenue but substantive expense history because of product development and business challenges. Series A or Series B funding happens with early stage venture capital firms, which may provide management or BOD expertise. III Significant progress in product development; key development milestones have been met (for example, hiring of a management team); and development is near completion (for example, alpha and beta testing), but generally, there is no product revenue. Typically, later rounds of financing from venture capital firms and strategic business partners. IV Additional key development milestones are met (for example, first customer orders or first revenue shipments) and has some product revenue, but it is still operating at a loss. Typically, mezzanine financing rounds occur during this stage. Also, it is frequently in this stage that discussions would start with investment banks for an initial public offering (IPO). V Enterprise has product revenue and has recently achieved breakthrough measures of financial success, such as operating profitability or break-even or positive cash flows. A liquidity event of some sort, such as an funding, IPO or a sale of the enterprise, could occur in this stage. VI Enterprise has an established financial history of profitable operations or generation of positive cash flows. Some enterprises may remain private for a substantial period in this stage. An IPO could also occur during this stage.
  19. 19. 17pageALPSVENTUREPARTNERS We aim to be a leading independent global Valuation and Hedge fund service provider, operating in key onshore and offshore global financial centers including USA, UK and India. Founded by former Big Four audit valuation experts with in-depth industry knowledge in Information Technology, e-Commerce, Electronic Equipment and Instruments, Advertising, Internet Software & Services, Banking & Insurance, and Healthcare & Life Science, etc. We deliver a bouquet of valuation services under one roof Introduction and Services
  20. 20. 18pageALPSVENTUREPARTNERS Strategic Valuation Services Fairness Opinion We provide independent advice to shareholders, promoters and boards of directors to assess reasonableness and fairness of the price and terms of a transaction,, for transaction negotiations and in related party transactions Internal Valuation We offer independent advice to boards of directors to help them determine the right price to pay or accept for a business. Joint Venture Valuation We evaluate JV relationships and advise our clients on their JV entry and exit assessments. We also assist our clients in determining contributions of the JV partners, whether in the form of cash or intangibles Our strategic valuation services include advising senior management, boards of directors, shareholders and promoters of public and private companies on evaluating transactions for acquisition or divestment opportunities, raising capital, considering mergers, de-mergers, joint ventures or divestitures.We assess critical value drivers of the business and advise clients on the fair value of their businesses. ESOP Valuation We value the ESOP awards with Relative TSR metrics, using sophisticated modeling techniques such as...