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Valuation for Startups: Key Insights for Founders Valuing a startup is more than just crunching numbers—it’s about understanding the dynamics of equity, dilution, and growth potential. Here are key takeaways from the document: 1) What is Valuation? It’s a monetary estimate of the benefit from owning an asset. For startups, this often means the potential future gains from growing the business. 2) Equity Dilution: Raising capital often leads to dilution of founders' equity. However, with successful funding, the overall value of the company—and founder wealth—can increase, following the “growing pie” principle. 3) Pre- vs Post-Money Valuation: Pre-money valuation refers to the value of your company before receiving outside funding, while post-money valuation includes the new investment. 4) Multiple Rounds of Funding: High-growth startups usually go through multiple funding rounds, with each round potentially diluting founder equity but increasing overall company value. 5) Critical Assumptions: Valuation relies on several assumptions, such as market potential, team capability, and product success. Accurate financial modeling and scenario testing are essential. PS. check out 🔔 for a winning pitch deck the template created by Silicon Valley legend, Peter Thiel https://lnkd.in/ejp-Bhnu

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Whoa…… from $22B to zero. And before this, in February, once the world’s most valuable Edtech startup was valued at $250m post money. Chilling. Any thoughts on why this is happening and insights for founders, Edtech and beyond? #startup #fundraising #valuation #chasingthebubble #fundamentals

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This hard reset is required for all AI founders from India building global B2B products: Product Innovation > GTM muscle Product innovation is happening at a rapid pace in each of your categories, valley competitors are building thought through features that can help them win customers mid-long term, GTM muscle alone without product differentiation wont help you win in the first half of this AI decade. We are doing this hard reset within BoldCap on what we are looking for in AI founders. Ping us if you are tinkering in global AI B2B products. Shiv Tayal Pratham Chadha Aditi Gera

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How do people see founders from IIT? 1. Raises investment People: "It's easy to raise money when you are from IIT" 2. Burns money People: "Investors should look beyond IIT's founders. Founders from non-IIT/IIM backgrounds would better utilise the money." 3. Build a successful company/unicorn People: "Valuation is still high. It won't sustain and will fail" 4. Shuts down after raising money People: "I told you it won't work" Meanwhile, Founders, the real ones, don't care whether they are from IIT/IIM. They keep building, keep pushing, and keep changing the world. ******* Follow Shubham Bansal for unfiltered life stories and learnings.

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Sujith Nair, Beckn's WhatsApp-averse, badminton-loving chief mover and shaker, gave us a peek into the world's first # e-commerce protocol. Imagine if Colgate wanted to sell a lot of toothpaste, would it open separate exclusive stores on every street? NO! Instead, it ensures its products are available in all stores where people come to shop, and not just toothpaste. Similarly, Beckn is a way for an online business to make its products and services available on other stores (popular daily-use consumer apps) instead of setting up its own store (its own consumer app) and waiting for customers to come in droves! The Beckn Protocol underpins Open Network For Digital Commerce (ONDC) and is a universal translator for e-commerce platforms. We would normally call it the Rosetta Stone for digital services, but now we have BHASHINI 😉 . It allows disparate systems to "speak" to each other seamlessly. The Beckn Protocol has become a verb in the tech world. "Just Beckn it!" has become a common phrase among developers when discussing open-source solutions for digital commerce. In fact, we like it so much that we are using Beckn use cases as our episode artwork (instead of our normal groovy cover art) to spread the word in our own little way. Some may even argue that the yellow and black in the artwork denote open mobility networks (read taxis) 😀. The even more nerdy might catch the movie reference in the title 🎬. So, is it an app? Is it an aggregator? Is it a platform? No. It is a Super Capability - #decentralised and #open. Listen, learn and use. sujith nair | Pramod Varma | Sanjay Purohit | Shankar Maruwada | Shireesh Joshi | T Koshy | Namma Yatri | FIDE | Antler | Bingepods (Ideabrew Studios) | OpenExO | Thinkers360 | IBM Alumni | Microsoft Alumni Network | The RSA (The royal society for arts, manufactures and commerce) | World Economic Forum | Digital India Corporation | nasscom | Abhishek Singh | Nilesh | Sheetal https://lnkd.in/dydrjnbU

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{New pod 🎤} "𝐆𝐓𝐌 𝐋𝐞𝐚𝐫𝐧𝐢𝐧𝐠𝐬 𝐟𝐨𝐫 𝐔𝐒-𝐈𝐧𝐝𝐢𝐚 𝐁2𝐁 𝐒𝐚𝐚𝐒 𝐒𝐭𝐚𝐫𝐭𝐮𝐩𝐬" This episode explores GTM strategies and learnings for US-India B2B SaaS startups. We cover everything from finding design partners in the US, scoping MVPs, figuring out what ICP to focus on, navigating the unique challenges of early PMF, GTM hiring in the US, and finally, working towards creating M&A exit options. Joining me for this discussion is Satya Ganni, an experienced SaaS founder and operator who has successfully built and sold five companies and led two acquisitions as a buyer. He is currently serving as CEO of Beamer and Userflow. Beamer is developing a cutting-edge product-led growth toolkit tailored to product leaders at SaaS and digital-first companies. They recently acquired Userflow to augment the business. TIME STAMPS: (01:15) Satya’s journey as a repeat US-India SaaS founder and operator (04:38) [Case Study: 0-to-1] Finding US design partners (11:09) Scoping B2B SaaS MVPs (15:42) [Case Study: $10k-100k ARR] Identifying which ICP to focus on - SMB vs mid-market vs enterprise (22:23) [Case Study: $100k-$1Mn ARR] Navigating the unique challenges of early PMF (27:18) [Case Study: $1-5Mn ARR] Building a US leadership team post-PMF (34:33) [Case Study: $5-20Mn ARR] Working towards creating M&A exit options  (38:46) Learning to become a proactive relationship builder YouTube - https://lnkd.in/guGQeBwA Spotify - https://lnkd.in/gAg7XeF4 Apple Podcasts - https://lnkd.in/gkYEDpED An Operator's Blog - https://lnkd.in/ggGbzSKY

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Just stumbled upon a tech-twitter discussion where someone working in Private Equity shared a screenshot and had mentioned in his mail that he will share the signed document via Legitt. One step closer to the vision. The vision is 36 months from now, any business, whether a single-person-show, a small team, a mid-size business or an enterprise business, will use Legitt AI in one form or the other. Legitt AI is no more just a Contract Management Platform. It's much more than that. Write to me for a demo and learn how you can super-charge your business with Legitt AI.

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I built a 4 step framework to understand the VC business. Access → Picking → Entry → Exit. It works for all types of VC’s irrespective of their size, industry focus & geography. Let us dig deep. 1. Access – Is the next Sachin Bansal coming to pitch to you? If not, it is NOT worth being in this business. Unlike the stock market, where anyone can open an account and start buying, in venture capital, you risk falling into the trap of adverse selection. This can significantly impact your IRR. To avoid this, it is essential to make sure the top 1% founders are pitching to you and you are seeing 80% of the deals in the market. 2. Picking – You receive 400 applications every month. Congratulations Most VC’s proudly flaunt this in their pitch decks – but are you actually seeing all 400 or just the ones referred to you. What if the next Sachin Bansal filled your application form but you never saw it? So seeing everything is a must but it is only the first step. The real challenge lies in picking the right market and founders that align with your investment thesis. 3. Entry – You Choose the Asset, But the Asset Also Chooses You. You might excel at sourcing the best opportunities and making the right picks, but if the founder doesn’t choose to take your money, all that effort is in vain. Without a strong brand, even if you nail steps 1 and 2, you’re still at risk of missing out on the top deals, which can ultimately lower your IRR. 4. Exit – The Final and Most Crucial Step After making 20, 30, or even 50 bets, the ultimate question is: What’s the exit math to ensure a strong return for your investors? How much ownership do you need, and what are the realistic odds of achieving the returns necessary to justify those investments? This is where most VC’s go wrong. Ultimately, you are only as good as your last deal. You have to track and make sure you are getting better at each of these – every quarter just like a start up would. If you’re an LP evaluating a fund, the important questions to ask are – 1) Are you seeing the best deals in the market? What are you doing to make sure you continue to see them. 2) How do you pick companies? Show us an investment memo? 3) Have you lost any deals, and if so, why? Found this useful? Let's continue the discussion in the comments. #vc #venturecapital #investing

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📊 Is pricing the answer to fragmenting the UPI App market? 📊 📈💡NPCI has extended the 30% market cap deadline because the top 3 UPI apps have ~92% market share. Phonepe, Paytm & Gpay capitalized on the early mover advantage. New apps don’t have incentives to compete for UPI volumes because it is a “free product.” And while this was why it grew, it has now also hindered entry of new players ✅ Global real time payment (RTP) equivalents are usually free for the customer while merchants are charged. Ex: 🇧🇷 Pix: Merchant: 0.22 - 0.3% / txn, free for user 🇨🇭 Twint: Merchant:1.3% / txn, free for user 🇵🇱 Blik: Merchant: $0.1 - $0.75 / txn, free for user 🇸🇪 Swish: Merchant: $0.09 / txn, free for user 🇸🇬 PayNow: Merchant: 1.3% / txn, free for user 📈💡 If we want to keep RTP free for the end user, the constraint is free P2P payments. Only P2M can be charged. Is that feasible? Let’s look at the data: 📌 UPI Value (in Cr): From April ‘23 to ‘24, grew by 39.6%. P2P grew from 10L Cr to 14L Cr, at ~32% growth YoY. And P2M grew from 3.2 L Cr to 5.3 L Cr, at~65% YoY. 📌 UPI Volume (in B txn): From April ‘23 to April ‘24 UPI volume grew by 62%. P2P grew from 3.8B to 4.9B, at YoY 29%. P2M grew from 5B to 8.3B at YoY 65%. And proportionally: 📌 April ‘24 Value: Total: INR 19L Cr, P2P: 72.97%, P2M: 27.03% 📌 April ‘24 Volume: Total: 13.3B, P2P: 37.5%, P2M: 62.5% ✅ The constraint of only being able to price P2M transactions is not a blocker, P2M seems to have significant volumes. But that’s the overall P2M market: There is a big segment that falls within P2PM (unorganized merchants), that NPCI will not charge 📈💡Let’s assume that P2PM majorly consists of low value transactions of AoV less than Rs 2000. If we look at AoV > 2000 bucket of P2M transactions, this constitutes for 4.50% of txn numbers, and 68.36% of P2M txn value. ✅ So even excluding P2PM this still leaves a significant~68% of P2M monthly value or 4.5% of P2M txns that can be monetized So what’s the ideal pricing model? ❗Well, the cost of a UPI transaction is ~Rs 0.4. At 13.3B UPI txns that is a monthly cost of Rs 532 Cr. Which is Rs 6384 Cr per annum to maintain the UPI ecosystem! The pricing needs to generate atleast this much❗ 1️⃣ Option 1: Fixed fee / txn: If only AoV > Rs 2000 txns are charged, then to break-even, the fee per txn needs to be Rs 15, which is high. If ALL the P2M txns are charged, then a per txn cost of Rs 0.67 would be enough to break-even. But the P2PM merchant would be impacted 2️⃣ Option 2: % of txn value: If only AoV > Rs 2000 txns are charged, then the break-even fee is 0.15%. If the total P2M value is charged, the fee needs to be 0.10%. Seems to make more sense But even if pricing comes, while it incentivizes new apps it also incentivizes incumbents to keep their market share. Enter: the 30% UPI market share cap To read the full article and other pieces like this, click here: https://lnkd.in/gSPm49aq #fintech #UPI #NPCI

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"In effect there are two different ways to run a company: founder mode and manager mode. Till now most people even in Silicon Valley have implicitly assumed that scaling a startup meant switching to manager mode. But we can infer the existence of another mode from the dismay of founders who've tried it, and the success of their attempts to escape from it. There are as far as I know no books specifically about founder mode. Business schools don't know it exists. All we have so far are the experiments of individual founders who've been figuring it out for themselves. But now that we know what we're looking for, we can search for it. I hope in a few years founder mode will be as well understood as manager mode. We can already guess at some of the ways it will differ. The way managers are taught to run companies seems to be like modular design in the sense that you treat subtrees of the org chart as black boxes. You tell your direct reports what to do, and it's up to them to figure out how. But you don't get involved in the details of what they do. That would be micromanaging them, which is bad. Hire good people and give them room to do their jobs. Sounds great when it's described that way, doesn't it? Except in practice, judging from the report of founder after founder, what this often turns out to mean is: hire professional fakers and let them drive the company into the ground." https://lnkd.in/gpAnbW4w

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Quick-Commerce is killing it in India — but couldn’t scale in RICH MARKETS Super-fast 15-minute deliveries = just don’t fit into the culture of rich countries like the US. India:  - Our middle-class & dual-income households are increasing (Maruti Alto sales dropping is a big sign, people are moving up in the chain)  - Life is fast-moving & people are busy chasing money & dreams.  - Labour is still cheap (though it's becoming expensive in metros now) West:  - Labour is very expensive. - Supermarket Culture is BIG, & it's massive in other mature markets too. People love their Costco runs - grabbing stuff for the week/month & making a day out of it. [Pricing is cheaper too].  - People plan their purchases for the week ahead & stock up accordingly. The India Consumption Story is a wild ride –– post-independence, India sprinted through its consumption evolution….& we moved directly from General Trade Consumption to ECommerce Checkouts. Unlike the West – which saw a massive modern trade revolution with sprawling supermarkets….we missed the modern trade/supermarket revolution…..Ofc, we have RelianceRetail, More, DMart & a bunch of others - but their contribution as a % is a joke. We moved from Kirana Shops to > Amazon Flipkart BigBasket all the way to > Zepto Blinkit Instamart We Indians love convenience & have accepted the fact that convenience comes at an added cost (we’re still ordering inspite of delivery & platform charges increasing). PS: I’m on average of ~5 quick-commerce orders/week. I know folks who’re at 2 OPD (Orders/Day) 😂 PPS: I feel ‘Fashion’ is the next category — where speed will change the way business is done. #Ecommerce #India #Superfast #10minuteDelivery

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The worst-kept secret in retail is that retailers are overstocked. Buyers mistook COVID-19 growth for marketing skills. It was luck. Founders have lost their brands because of this. The biggest lie is that the root cause of this issue has been fixed. The second biggest lie is that there is an easy fix. Inventory Planning Software is not a new category. It pre-dates DTC, but DTC demand dynamics have certainly stirred the pot. It is incredibly nuanced, and each software has its place in the market depending on a brand size, sales channels, product types and categories, seasonality, assortment, continuity of products and growth rate. That's before you consider integration to your Ecommerce platform, ERP or WMS. Yikes. No wonder Operators burn more time reviewing these solutions than any other. The vendors find this tough, too. Some of the vendors I am highlighting here rejected my request for a demo 👀 Even if you're not currently shopping in this category, save this as your shortlist for when you need to. 📥 If you're one of these vendors, please use the comments to state your differentiation and call out your ideal customer profile to help people qualify themselves. Inventory Planner by Sage - Wider SKU range. Repeating products. £10K+ per year. Toolio - Merchandising focused. Works well with NetSuite. Retail+DTC forecasting. $10K+ per year/module. Flieber - recommended by a client of mine. Uses AI. No pricing intel. Singuli. Data scientists. Strong in 'What to buy'. Starts at $3,000/month. Optiply. AI and automated buying. Great for seasonality and resellers of brands with big catalogues. Syrup Tech. Google-backed. I don't know much, but logos look cool. I would love a demo tbh 😂 Lokad. The nerds of inventory forecasting. Over my head, but one for the more studious operator. Prediko is Shopify-focused. It integrates with the Bundle app and Shopify bundles. It is Felix Capital-backed. It starts from £119/month. Slimstock. Veterans of the game. Solid platform. Pricing is not disclosed. Netstock. ERP-Focused inventory planning. Works well with NetSuite in particular. It's a solid option you have an ERP-stack. Madden Analytics. Fashion-focused merchandise solution. I've got a demo lined up next week. More soon 👀 No inventory planning solution is going to replace the art of merchandising. These are tools to make the merchandise team's life easier so they can focus on making the right decisions. The hottest tip outside these solutions is Klaviyo waitlists and using pre-orders on new products to gauge demand and reorder before they land. Airtable isn't the right solution for figuring out what to buy. Airtable can help combine your costs, purchase orders, and supply chain workflow with the 'what to buy' data your inventory planning software generates. What Inventory Planning tools did I miss? Which of my summaries sucks and needs to be amended?! #inventoryplanning #techstacks #ecommerce #shopify

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This post from Vaibhav Domkundwar beautifully shows how surviving long enough can position a startup to take advantage of an eventual tailwind. When we invested in Yulu, no one had a clue that Quick Commerce will become the next commerce phenomenon in the country after payments. Because Yulu intelligently survived, kept improving the product and is capital-efficient enough to be agile to market needs, it’s now befitting from QC tailwinds. Reminds me of what the Rippling founder once said - as a startup, just survive 10 years and the odds are that you will end up succeeding.

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For founders who say - “If I get investments, I will gain volume in B2B. I will keep margins low. But overall will have good profits daily.” - 1. Don’t just look at volume and margin. Look at barrier to entry too. If money is your moat, there are much larger money-whales out there to push you out 2. You are probably reaching out to the wrong investors. You should create some traction and apply for a cheap bank loan. Check for collateral free / susbsidised schemes. An Angel investor will expect 60%+ returns, a bank - 10-12% returns. Even if your ROCE is 30% (which is great), the Angel will always be dissatisfied, while the bank will be more than happy to help you grow. 3. For businesses where capital is generating 30% free cashflows YoY, look at 7-10 years of organic growth. I have not seen anyone who has stayed long enough in their game not do well. 30% compounding over 10 years gives you a 12-13 times return. Over 30 years? 2000+ times 😬 4. Figure out products that have shortest cashflow cycles, and products with highest margins. A healthy mix of these two will improve your annual rotations and help compound at 2x speed. It will also ensure you have regular cash flows to pay your staff / team. 5. If you are optimising for cashflow by keeping margins low, make sure you only sell to the most trusted customers who pay on time. Also, it will really help if you mentally consider only “cash received” as “sales done” for low margin products. For B2B product businesses, capital erodes faster because of rotation issues than product issues per se. 6. Once you have figured out the market and spent enough time, you might just figure out a white space where you would want to double down and create a product / service to serve that need. You will already know the right vendors / players in the supply chain to partner with. And who to sell to. You can self-finance it, or raise institutional capital to grow. This could then become what we call an “investible business” for angels/VCs etc. P.S: Recommendations based on auditing tons of B2B businesses, evaluating pitches from founders who are trying to figure B2B, and watching my own family members run B2B product businesses. As boring as B2B product businesses are, especially trading businesses, they compound wealth at 30-40% p.a. when starting capital is less than Rs. 1cr. Great way to create generational wealth. Slow, patient game. Feel free to add to / challenge the above points. #enterprise #business #cashflowmanagement

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💲💲 If you are a D2C Consumer Brand Startup you should know this VC that invests in pre-revenue stage Startups! 💰 VC Background: Meet Sauce VC a Cat II VC that launched their first fund in 2019 with a modest corpus of INR 60 Cr and since then launched 3 more funds and made 33 investments. Their recent INR 365 cr Fund launched in Aug'24 plans to invest in 20-25 consumer brands. They pick 6-7 selective investments annually out of 3000+ deck they get. However, their Fund I has a success rate of 50% (not a bad idea to invest in the fund if you are a UHNI). Infact their Fund IV was oversubscribed 3 times. 💰Notable Investments: Mokobora, Hocco Ice cream, Supertails, Innovist, The Whole Truth etc 💰Stage at which they invest: They invest even at pre-revenue stage to early traction stages. Ideally this VC invests at pre-seed to Series A. 💰What do they look for: Taking call at pre-revenue stage is really tough, especially in Consumer Brand segment. Hence, they look for founders who have deep experience in the segment either by the family background or by the founder's professional background. However, if the founder is not well-versed with the D2C game, they are cool with it. But the founder should know the segment, scope for new brands and plan to differentiate the brand. 💰Ideal cheque size: $ 1 Mn. But can go up to $ 5 Mn. 💰Investment Style: Sauce VC prefers working along with the founders to ensure the success of the Startup. They lead the rounds at pre-seed and Series A stages. Once the Startup is into Series B, they take a back seat and only participate in the following rounds. 💡 Hope this helps. Share it with some great founder of a consumer brand who is at early stages and needs to know this. If you want a warm-introduction, DM me or let me know in the comments. Bhavesh K Jatania Raunaq JaisinghaniAshish SharmaMohit Kanjwani

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While the IPO window still feels like it’s nailed shut, and some verticals (AI) are faring better than others (SaaS), the overall startup outlook (at least on the layoff front) has improved. When startup fundraising plummeted in the summer of 2022, the key measure of success shifted from rapid growth to a clear path to profitability. Tech layoffs overall are now at a two-year low, despite recent downsizing at Miro and Dropbox, suggesting a potential stabilization across the industry. It will be interesting to see how these numbers look in H1 2025 as innovation in AI continues. #startupoutlook #startuptrends

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Being a founder requires the most diverse set of skills than anything I've experienced. Since I started Mylance in early 2020 I've learned: 1. How to build a website 2. Start-up equity dynamics 3. How to hire great people 4. How to train them 5. Understanding basic accounting principles 6. Setting up a business bank account 7. Managing cash flow 8. Filing business taxes 9. Choosing the right legal structure for the business 10. Drafting and reviewing contracts 11. Protecting intellectual property 12. Navigating regulatory compliance 13. Setting up payroll systems 14. How to accept online payments 15. Managing subscription billing 16. Utilizing CRM tools 17. Customer support best practices 18. Creating effective customer feedback loops 19. Conducting market research 20. Building a product roadmap 21. Prioritizing features and updates 22. Running beta tests and gathering feedback 23. Implementing agile development processes 24. Using project management tools 25. Automating workflows with Zapier 26. Integrating third-party APIs 27. Ensuring data security and privacy 28. Setting up cloud infrastructure 29. Scaling the tech stack 30. Creating and maintaining documentation 31. Marketing and promoting the product 32. Building a brand identity 33. Utilizing social media for growth 34. Running paid advertising campaigns 35. Networking and building relationships 36. Fundraising and managing investor relations 37. Creating pitch decks and presentations 38. Handling public relations and media inquiries 39. Continuous learning and self-improvement 40. Balancing work and personal life Just to name a few! If you're signing up to be a founder, get ready to learn a TON.

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