There are some
triggering factors that push a woman to launch her business; such as the need
for a job, invest savings, become one’s own boss, realise her own dream or
maintain a family tradition. Women may also have to balance home and work,
which might lead to stress. This can get accentuated if the family environment
is not conducive to doing business.
However it is a ground
reality that many women quit their start-up dreams because of lack of resources,
higher risk factors, and lack of marketing, management, financial skills and
the burden of compliance costs. Access
to hard and soft infrastructure, market, skilled HR, appropriate credit,
technology, and statutory compliances are some of the key areas of support
requirements.
Women
led start-ups in eastern and north eastern India have often shared that there
is an absence of mentorship, and most importantly an ecosystem that can guide
and strengthen first generation women entrepreneurs. The
start-up ecosystem consists of a group of people, start-ups, and related
organizations that work as a system to create and scale new start-ups. The start-up ecosystem in India is flourishing
with more women being motivated every day to set up their own enterprises. Each
start-up goes through certain stages of growth such as the seed stage, minimal
viable product stage and then a fully established brand stage. However, access
to appropriate financing avenues and trusted mentorship networks are still a
luxury to many. Women led start-ups are especially seen to be at crossroads when it comes to
taking their ventures to the next level because of barriers pertaining to
social and cultural norms.
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Business leaders from selected domains, professors, incubation heads, investors, financial advisors, entrepreneurs from North Eastern region of the country interacted with a group of women founders and leaders. The speakers discussed about the trusted avenues to acquire fund for specific business, the appropriateness of finance, ways to pitch start-up ideas to investors, importance of building women mentorship networks and the ways to scale early stage business ventures. They covered various areas of starting up a venture from scratch, shared their challenges and success stories, retailing, finances amd a lot more. The start-ups were from a wide variety of domains including agrotech, ed-tech, food, textile, handicraft, travel, and tourism.
Key Take aways for early stage women led startups:
1.
Need to increase knowledge of funding sources,
maintaining book of accounts and managing finances
2.
Explore more retail and E-Commerce options as selling
channels
3.
Seek mentoring support from experts as guidance to
strategically investing finances
4.
Develop a business model, strategize as per risks
involved
5.
North Eastern region has lot of untapped protection
for business growth and expansion
6.
Documentation of finances, marketing and business
needs to be in place.
Funding for early stage start-ups:
“When one goes big, one can do more”
The first and foremost
reason why start-up ventures need funding is to cover up their capital cost.
When you seek funding from a specific organisation the value of your venture
increases, attracts attention in the market, gains trust of potential customers
and provides you a linkage to the community and network. Entrepreneurship has taken a new
turn in the minds of the present generation, and it being one of the most
discussed topics in the modern day and age, various venture capitalist organisations
have come into action.
Nickson Sharma of North
East venture Fund (NVF) shares “there is a lack of knowledge when it comes to
finances and managing funds, even when they follow a step by step process in
building the company by many start-ups. Also when it comes to retailing, most
of the ventures are stuck with a single retail platform despite having the
option of retailing in various platforms at the same time, hence increasing the
sales”.
To avail funding support connect with NorthEast Venture Fund (NVF)
NVF is a 100 crore fund
working with early and growth stage start-ups. It is associated with the
Ministry of Development of the North Eastern Region and was launched by the
North Eastern Development Finance Corporation Limited (NEDFi)
NVF is focused on
investing in different technology based sectors like heath technology, education
technology, food processing, food technology etc.
Mission is to improve
entrepreneurship, equity funding, start-ups, and technology innovation in the
region of North East India.
It mainly focuses on
investing in enterprises and providing resources for entrepreneurs to maximise
their investment return.
They have invested in 51
ventures in the last 5 years, where around 15 of them were women led companies.
They have invested in Nagaland, Manipur and Mizoram.
NVF also helps entrepreneurs connect with the
previous ones who had already worked with them, helping them build communities.
Mentoring support by 100X
VC
100XVC is a venture
capitalist organisation working with various startups of diverse portfolios.
With financial support 100XVC also invests in
marketing, HR, management specifically of a potential company. They also
provide mentoring support to the ventures on how to strategically invest in
various areas and what business model will work with respect to their product
or service.
Scaling up
It is seen that most of the local based startup ventures come up with traditional products, so how much are they interested in becoming a huge brand?
It's not
about the interest but to see if the ventures have the resources or the
knowledge to do it in a much wider perspective.
The easiest and the most effective way to make a product known in the market is to sell it online, as the internet is something which is accessible to all.
Before selling something online, the entrepreneurs have to keep in mind that there is going to be a demand in the market, when there is demand there will be a need for upscaling. If the cost of capital is high, and the venture is not able to increase the next round of investment, then scaling up is of no use. So rather than fundraising, they should go for equity funding as the product needs to be of lower selling price, eventually there will be a higher chance of increased sales. Ms Lipi Panchmiya, analyst in portfolio management and research 100 X VC mentions that to grow business one needs to expand contact and network. This can only happen when some one stays in the same industry for several years. Therefore it is essential that an entrepreneur works in the industry, connects with people and then build contact over the years. Ventures also need to identify gaps they want to address and that can only happen when they understand and explore the market.
She further says “North East has a huge potential in going big online because of their diverse features that are present with respect to tourism and handicrafts, and it is seen that potential customers are interested in owning something which originates from the North-east. Various E-commerce websites give space to these ventures to put their product online, where they are able to sell nationally and internationally as well”.
Early stage start-ups
need to prepare the following points in order to apply for investment for scale
up:
1. Company Summary
2. Pain Points of the
idea
3. Solutions proposed
4. Platform/ Product
Description or Product Demo
5. Traction, Expertise,
Management Team
6. Key
Stakeholders (Investors, Advisors)
7. Market Opportunity,
Size and Market Analysis
8. Market Approach
and Strategy
9.
Customers/Clients,
10. Business and Revenue
Model
11. SWOT Analysis
12. Customer
acquisition strategies
13. Competitor
Analysis
14. Projected Financials
15. Fund
Utilisation
16. Road ahead/
Exit Strategy
17. Monitoring of the portfolio companies
Access and maintaining finances
Ventures that have an
annual turnover around 30 to 40 lakhs often fail to maintain the book of
accounts properly. To get funding, one has to maintain the following:
- Book of accounts need to be properly maintained,
mentioning the returns,
- To keep track of the balance sheets, documentation,
marketing expenses from day one.
- Ventures that are based on proprietorships must focus on making their company a Private Limited. To get venture capitalist funding they should be having shares, so to have shares they should register for a pvt. Ltd. company.
Mr. Subir Singha, Head of Operations in National Rural Economic Transformation Project (NRETP) says “Transparency is the key to get funding”.
Quick Glance on Funders:
NRETP helps these ventures approach various venture capitalist organisations and mentor them about the criterias they have to fulfil to get funds.
Numaligarh Refinery Limited (NRL) is a public sector company, providing funds as a grant. NRL has funded around 37 ventures out of which 14 start-ups are led by women. They have given around 8.5 crs out of the 10 crs fund that they have, 4crs out of the 8.5 crs is funded to women entrepreneurs. So the money that has been already granted to the existing 37 startups, now have a value around 400+ crs in total, out of 180 crs which is 45% of the total value comes from companies led by women.
The Startup India program has a criteria that it is compulsory for the companies to get 3% of women led start-up ventures.
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Connecting Mentors with women led start-ups through a Platform
Addressing
the plight of first generation women entrepreneurs we have launched a
mentorship platform (www.women4economy.net) to connect domain specific
mentors with women founders and leaders. At the early stage of business critical
mistakes can be avoided by working closely with people who have gone through
the process or are well aware of it. Drawing up the right set of contracts is
critical to any business, and access to a mentor network can make life easy for
an entrepreneur.
Who can be a Mentor? An entrepreneur, a professional engaged in management consulting, tax, corporate law, accounting, an academician, a business incubator head, industry expert, business gurus with years of experience in guiding start-ups or business enthusiasts
●
Giving back the knowledge
gained to the next generation
●
Sharing success and failure stories can guide first
generation women start-ups
●
Engagement with an exciting group of entrepreneurs with
new ideas
Benefit for Start-ups
The network aims to provide seamless access to domain specialists,
financial advisors, statutory compliance professionals and entrepreneurs and
de-bottleneck growth impediments for start-ups.
Some of the benefits will be access to sector specific mentors, support
to test proto-type, information on funding sources etc.
Incubation/Hubs any early stage start-up can connect
with
The Hub Jorhat, (NEATeHub) Assam Agricultural University’s Agri Technology Business
Incubator (an Atal Incubation Centre), IIMCIP Assam Startup nest, Technology
Incubation Center, IIT Guwahati, Guwahati Biotech Park, Indian Institute of
Entrepreneurship (IIE), IIMCIP- Nagaland, IIMCIP- Arunachal Pradesh, 100x VC
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