Every Startup needs to raise funds for scaling up fast. If you don’t raise funds, then your competitor might raise funds, scale up and give you steep competition. Therefore, you should keep on raising funds and scaling up your startup. Please go through the Steps of Angel Funding for your Startup:
1. Eligibility
1.1 Legal Structure: You should have the structure of a private limited company in order to raise funds against equity. An LLP or a Firm is not eligible as it cannot issue shares.
1.2 Revenue and Profit: We accept applications having a monthly profit above 2 lakhs and annual revenue above 50 lakhs for angel funding. Both these conditions are mandatory as per the standard policy of the Angel Network.
1.3 Product: The startup should have its own product whether physical or digital, however it should be a product with standard price, quantity and delivery time. More than 90% of the revenue should be from the sales of the products.
1.4 Brand: The startup should have its own brand.
1.5 Documents: The following documents are mandatory:
(a) Pitch Deck: You should have the pitch deck prepared as per the standards of the StartupLanes. This is the most important document the investors for raising funds. You may avail the Pitch Deck Services.
(b) Financial Projections: Investors wants to know about your plans for spending the funding that you are going to raise. In this the most important aspect is that customer acquisition and revenues along with your profitability. Your exact amount of funding required will come from this document, therefore this cannot be ignored. Do not mention a random amount of funding required in your pitch deck, get the exact number from your financial projections sheet.
(c) Valuation: You have to know the value of your company because investors will invest in your company for a share of your company. Investors will get to know about the equity that they will get for their investment from this document. This is an extremely important document. Most of the founders make this mistake of getting an inappropriate valuation, only get the “Fairshare Valuation” that is propounded and developed by Dr. Shishir Gupta, who is the Founder and CEO of StartupLanes. You may avail the Valuation Service by StartupLanes.
2. Chek before the Funding Application
Most of the pitch decks, financial projections and valuations that are made by the founder themselves or by their designers are not appropriate. To be honest, more than 98% of these documents are wrong. We don’t explain you the mistakes because generally founders don’t understand, and they start arguing with our team. That’s why it is important for you to understand that these documents are most important and therefore it is recommended that you get these documents made by the experts of StartupLanes.
3. Funding Application:
Pitch to the Investment Banking Team of StartupLanes. They will evaluate your startup. You can apply through the StartupLanes Biz Portal.
4. Connect with SL Team
SL team will connect with you to setup a mock pitching session.
5. Mock Pitching of Founders
The SL team will setup a zoom call for your mock pitching. You should pitch to our team in the same way you are going to pitch to the investors. This will ensure that our team finds out the challenges and then they can suggest you the improvements that you should do.
6. Approval of Startup
After the mock pitching, our team will inform you about approval of your application. We generally don’t reject any application if the self-evaluation process is followed, however in case your application is rejected, you can raise a concern to get it reviewed for one more (final) time or book a call to talk to directly talk to the CEO of StartupLanes.
7. Due Diligence by StartupLanes
We do the complete due diligence of the startup before accepting it for funding, therefore you will be required to submit the following documents for the due diligence: RoC certificate, GST certificate (if applicable), Pan card, address proof of the company, address proof of the founders (current location), two personal references (friends/family) and two work references (other founders), two staff references (team members) and two educational references (college professor/teacher/principal/others), and you have to provide your financial documents certified by your CA including Trading A/c, P&L, Balance Sheet (provisional is also OK), company’s bank statement, GST statement, income tax filings and RoC filings. You will be required to declare that you don’t have any pending cases or police complain against you or your co-founders, at the time of due diligence.
8. Funding Mandate
After the due diligence is completed, our team will share the legal contract with you, that is called mandate. You have to review it by yourself or get it reviewed by your lawyer, sign it and send across. Please note that this mandate is non-negotiable and nothing will be changed in it, except factual errors and typing mistakes. Sign it and get it signed by the SL team, keep the signed copy with you and send across to our team as well.
9. Payment Verification of Startup
There is a legal fee of US $25 or INR 1000+GST to be paid towards the legal charges of the mandate that is also used to verify the bank account of the startup. Please pay the charges and inform our team. This is only for the people looking to raise the funds through Angel Investors, not applicable for the VC funding.
10. Research Report of Startup
The Research Team of StartupLanes will prepare a research report on the basis of data provided by you to present a bird’s eye view to the investors. This research report makes the decision-making process of the investors, easy and fast. Our team may ask for additional information while preparing this research report, please help them, this is for the benefit of all. We don’t charge any fee for the research report from anyone; therefore, you don’t have to pay for it.
11. Startup Teaser
Make a one-page teaser describing problem, solution, revenue, industry, customers, product, competitors, funding required, milestones, and valuation in 1-2 lines for each and send across to us. Do not mention your name, your company name, brand name or any kind of contact details in the teaser. We send this teaser to the investors in our network to pick up their initial interest.
12. Promo Video of the Startup
Our team will give you a basic format to record your video mentioning important aspects about your startup and explaining why should investors invest their money in your startup. This should be a 3 to 5 minutes video. We will do the editing, you just have to record and send to us. We won’t charge you for the video editing and sound editing.
13. Startup Demo Day
Our team will give you a date for the exclusive demo day. It is applicable for startups looking to raise Angel funding from the angel investors in our network. This is an exclusive event for one startup where investors will hear the pitching from you. No other startup will be present in the event, it is an exclusive event for you.
14. Investor Outreach
Our team sends the Research Report, Promo Video and Teaser to the Angel Investors in our network in case of Angel Funding. The interested investors will express their interest to receive the meeting link for the exclusive demo day. On the other hand, in case of Venture Capital Funding, we outreach the suitable VCs one by one and our team will identify the interested VCs for the personal connect.
15. Personal Connect
This is applicable to VC Funding only, where our team connects the Founders with the VCs on a personal call or meeting through video conferencing.
16. Commitment
Our team connects with each investor personally to take their commitment of the amount that they wish to invest. We will inform you about the total investment committed.
17. Investor Due Diligence
The investors will do the due diligence to the facts and figures mentioned by you.
18. Term Sheet
The term sheet will be signed by you and the investors to put all the terms and conditions of the investment into the legal agreement.
19. Share Holder’s Agreement
This is an agreement to define the terms and conditions for the startup and the investors who will take the share allotment.
20. Fund Transfer
Investors will transfer the funds directly to the bank account of the startup. You should have a new bank account opened for the purpose of receiving funds as per section 42 of the Indian Companies Act, 2013.
21. Success Fee & Lead and Syndication Fee
You have to transfer the success fee to StartupLanes for the services as per the mandate along with the lead and syndication fee.
22. No Objection Certificate by StartupLanes
After the payment of success fee, please apply for the No Objection Certificate to be prodived by StartupLanes.
23. Announcement
Now, you can announce the funding in the media. You should announce it in at least one national media so that the tracking sites can validate your funding and valuation.
24. Share Allotment
You have to allot the shares to the investors within the time limits.
25. Next Round of Funding
Start preparing for the next round of funding through StartupLanes or through other Angel Networks/VCs with the help of SL team.
Please feel free to ask questions during the pitch session.