Startup funding explained इसके बाद कोई और video की जरुरत नहीं पड़ेगी

By | September 2, 2019

Hello friends,my name is Sahil Khanna,you are watching Intellectual Indies and todaay we will talk about startup funding If you want to open a startup then how you can raise funds for that? So you want to start an startup and you have an idea You have to make business model for that idea and run it successfully But from where will the money come that you need to start your business? We call this as Fund Raising I am telling you a story to understand this You have a startup idea and you want to do a business on that Let’s assume that you have taken 1 lakh from your father to start your business You have prepared your website,infrastructure and whole business model Now when you go into the market you need more investment and money So from where will you get that money? You have two options : either you take loan or approach investors let’s assume you don’t take loan and go to investors. So let’s understand investors first So basically investors are of 2 types : Angel Investors and Venture Capitalist Angel investors are big businessmen like CEOs of companies They invest in your business and provide business know-how. They tell you the loopholes in your business model and way to improve it Basically they help you in improving business and also invest in your business Ventures capitalist are different. They invest in your business but don’t provide business know how Venture capitalist are companies which take money from big investors and invest it in your company so that if your business makes profit,those businessman will be profitable They are similar to share market brokers Now you go the investor and tell him to invest in your company whose vvaluation is 10 Crores Way to calculate valution of a company is different which we will understand in some other video So you go the investor and tell him that valuation of your company is 10 Crores and I want to give you 10% stake which means you are demanding 1 crore from them And on return you are giving them 10% share of your company So after requesting for the investment you came back to home After somedays you have 2 offers One from Venture Capitalist and one from Angel Investor Angel Investor says I will invest 6 lakh on valuation worth 6 Crores Venture capitalist says I will invest 40 lakhs on valuation worth 8 Crores So if you see as per offer,VC has a nice offer than Angel Investors But Angel Investors will also provide you business know how They will help in every level of your business. They have a wider netwoek and can help you in making a big player in the market But Venture Capitalist is providing you more money So what you do is you accept offers of both. And you negotiate with Angel Investors that valuation of your company is 8 Crores They both agree to it So overall you get 1 crore on valuation worth 8 Crore Due to which you company gets diluted by 12.5% Your share is now only 87.5% But in return you get 1 Crore for that The investment you got of 1 crore,you spend it all within a year Now comes second round of investment Again you go the investors and tell them that valuation of your company has now increased by 10 times Now I will pitch on 100 Crore instead of 10 Crore Value of my company is now 100 Crore Again you get the investment and again you dilute 10% share So when you go for the investment you ask for 10 Crore and vaaluation of my company is worth 100 Crore which means again you are giving them 10% stake So what will happen,87.5% will get reduced by 10% and the money you got as investment will also get reduced by 10% This thing is not always right There is one thing Share Holder Agreement which has a Anti Dilusion Clause Acc to this if you have invested in a company your share will not get diluted So if you need more investment to grow your business,that share will go from your shares which means the 10% you are paying will be through that 87.5% only 12.5% share will be fixed for the person who invested before You run your compaany for one more year and your market share again has increased Now you want to open headquarters in every state for which yiu again need investment Now you go for third round of investment You say valuation of your company is 500 Crore And again you dilute your 10% stake After this year,finally your company is in profit Your balance sheet shows profit that your company is growing This iss not like previous years where your company is growing but is not in profit Here you do buy out What you do in buyout,you go the company and say my company is in profit and value of my company is 2000 Crore And you say them that you have this much share in return of which you give me this much money And this company is yours Big company agree to it,but they are also brave. They think that if you leave as you are the only person who has made this company profitable You are the one who knows the maximum about this business You have the maximum experience about this business So if you leave this,then who knows this business may again suffer from loss So that company gives you some percent of money in the form of shares so that your interest remains in that existing company You will also get share from the profit so you will also do efforts to make the company grow And ultimately the big company will get profit from this We call this thing as buy out And if you don’t want investment,next medium is IPO-Initial Public Offer Here you list your company in share market And here your investors are general public If I have listed my company in IPO,then you can also buy share of my company If you think that my business model is good then you can be my partner by buying share of my company If you want to list your company in share market or create its IPO,then I will make aa video on that which will help you in launching your company’s IPO So guys this topic ends here,hope you liked it. 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