Netz Capital Early stage venture capital fund

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Information about Netz Capital Early stage venture capital fund

Published on July 20, 2009

Author: netzcapital



Netz Capital Early Stage venture capital fund and advisory. Presentation delivered during Indian Venture capital journal event at Taj Lands End, Bandra, Mumbai, India

IVCJ Conference for Private Equity for IT & ITES Early Stage Financing 29th April 2009, Taj Lands End, Mumbai Atul Khekade Director – Netz Capital

Company Stages Idea $10K - $50k Business Plan Seed/Pre-Early Team Working Model 0.5% $2M - $5M VC Operations PE IPO Exit >$5M Acquisition

Fund Structure Idea •Scalability •Portability •Interface •Operational Efficiency •Market Size •Biggest Competitor Team Technology Infrastructure Early Promotion <$5K <$10K <$10K <$5K <$30K •Early Customers •Self Sustaining Operations - $1M Revenues •Gearing up for Next Round

Fund raising Challenges (In recession time) • Scalability • Operational Efficiency/Low fixed costs • Revised Exit Strategy/Profit making as first priority • Recession Proof Check • Serves a very basic need at ½ x price • Serves emerging/recession free markets Additional Evaluation • Long term viable and economic model Criteria • VC/PE Limitations • Scarcity of Capital • Bad M&A and IPO market • Painful Term Sheet, giving away majority control

Strategy: Winning or Surviving? In tough times • Highest quality, fair price • Fair quality, ½ x price • Fixed cash outflow model • Negative cash outflow model • Self funded Growth • Partnerships/Franchising • Budget as per market price • Bootstrapping / Re-inventing the budget • Advertising • Public Relations • Find Employees • Find/Nurture Entrepreneurs • Sales start after operations • Sales first

Moving to the next round of Capital • Is it absolutely necessary? • A successful company is the one that makes more profits – not the one that raises more capital. • Thought about raising capital from customers? – Long term commitments – Pre launch sales – Clearer revenue picture of the future. Raised $100M as Tata raised $5 Raised $6.2M deposits from million on nano from 125,000 customers forms wiki users

Seeding the Leader LEADER Process Consistency Business Model Vision Early Role Model Customers Organized Sales Process Media Presentation Friendliness Skills

Growth - A reality? • Recession – Greatest Opportunity to rise • Opportunity for cheaper alternatives of existing products Real Estate Automotive Travel Food Energy Entertainment Cost effective •Second hand •Full service Franchising Green Energy •Cheaper housing cars to low frill sources theatres airlines •Electric cars •Movie rentals •Airlines to •Car Rentals trains

Exit Strategy • Profit Making as soon as possible • Surviving till the markets recover – Undervalued M&A – Undervalued acquisition bids

Valuation • “It is better to own 10% of a $100 million company than owning 80% of a $5 million company” • Company’s leader deserves controlling interest • Valuation Criteria – Revenue – Competitor’s revenue – Early entrant? Or crowded space? – Early customers – Market size

Thank You • Atul Khekade • Info @ • +91 98203 72810

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