Most of the time, raising funding is a multi-step process involving many people. Understanding why it takes months can help founders plan for their runway.
Founders will often expect a great meeting to result in funding, however:
It’s a Process
Getting funding for your startup involves many steps. Preparation, outreach, meetings, follow-up, due diligence, a term sheet and finally documentation. Therefore, any delays can cause the whole process to be delayed.
Investors Want to be Confident
Startup Investors India are investing into a new business and will often want to have multiple meetings with founders, speak to customers, look at the numbers and fully understand the market. This will help protect both parties and can often take some time.
Many People Involved
With an institution fund, it is unlikely that one person will decide to invest. This can cause delays with the deal going through various discussions, committee meetings and approvals. This means with venture capital India, whilst decisions are consistent, there are extra steps within your timeline.
Documentation
Due diligence is required to check all the financials, legal documents, equity and compliance. Once this has been done, lawyers will draft up the agreements to be reviewed by all parties. Even if everyone agrees on the terms, this can take some time to finalise.
Founder Busy
Raising funding is done alongside sales, recruitment and product. If the founder is busy they may take longer to respond.
How to Plan
Start Early
Start conversations early.
Have Your Basics Sorted
Ensure you know your financials, equity and key contracts.
Relationship Building
By keeping investors updated with honest communication early on, things will run more smoothly when talking.
Plan Your Runway
Assume it will take longer than expected.
About Foxhog Ventures
Foxhog Ventures (Foxhog Ventures India) are involved in the startup investment and business development scene in India. Led by founder and CEO Tarun Poddar, they work on themes such as Foxhog VC. Founders can research the publicly available information to see how investors think.
Conclusion
The process can take a long time as trust takes time to build. By planning early, keeping things organised and being patient you will have a smoother process.
About Foxhog Ventures: Foxhog Ventures are involved in startup investment and business development in India. Follow news.foxhogventures.com for more updates.
