e_Paper 4-12-2016

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16 SUNDAY, DECEMBER 4, <strong>2016</strong> DT Feature 'The main objective of fund-raising is to accelerate growth' Tanveer Ali, Executive Director of Olympic Industries, talks about fund-raising • Nahid Farzana Every week expert mentors are taking sessions for the top 5 start-ups of GP Accelerator (GPA) which is operated by SD ASIA. The sessions effectively guide the startups for success in the long run. Tanveer Ali, Executive Director of Olympic Industries Ltd. came in as a mentor recently. His session was on fund-raising tips for the start-ups. He talked about the different phases of fund-raising. Here are few key points from the session: Before looking for fund-raising what are the crucial topics to keep in mind? Fund-raising is often a very sensitive issue. There is a lot of negotiation. It’s not only just between the investor and you but also between you and your co-founders and team members. All the members need to agree on how much to raise and how much of equity are you willing to give up. Lots of things should be well considered before making the decision of fund-raising. The big ones are- • Where are you today and where do you want to be next? • How much your business spending today? • How much do you need to get where you want to be in next 15-18 months? • How much of your business are you willing to give away to get that funding? • If you don’t raise money, where will you be? Why do we take money from external investors? There could be different reasons for each company to raise money. But typically 2 primary reasons are critical- • Diversifying economic risks by involving more people. If you acquire shareholders you spread the chances of risk. • Accelerating your growth should be the primary reason of why you want to raise money. Focusing on the growth of your business should be your key planning. By taking investors’ money, you plan the road map of how quickly to accelerate the growth or reach your goals. If you have certain goals that you know you can reach in 3 years, would getting external capital cut the time to one and a half year? If the answer to this question is yes, then comes a more critical one. How much of your business do you have to give away to meet your revenue goals in 1 and a half year? What do investors look for in a business before deciding whether to invest or not? These are the three most important things that any investor would review: • Team • Product market fit • Market size Every venture capital investor looks at different things in business. But the general number one item that any investor would look for is the Team. Typically while assessing different criteria in investment assessment, the investor put 70% of the valuation in Teams. Whether the team is confident, compatible and has the ability to execute the plan has a great impact on investing decision. Typically it takes an average startup 7 years to reach a level of liquidity events. Investors look for a team that can iterate through this time. The role of each member of the team might overlap and they need to carry along. Also, it’s important to figure out how the members will react if they fail. The team is valued so high because you invest in people and you do that so that they can salvage the business. The team needs to truly understand the product market fit and the market landscape. Their confidence and commitment need to be high to carry the start-up for 7 years. So while trying to get investment, focus on the strength and dynamics of your team. Once you have figured these out, you need to think about your fund-raising ask. • How much you want from investors? • What right and privilege will you give them? Fundraising is not a fun thing to do. You need to negotiate and meet investors many times. Also when you do fund-raising, you are not building your business which is a pretty big opportunity cost. So, you need to decide how much you are asking for and what will you be offering them in return. How much do you need to raise? How much is too little or too much? You must have a financial model. Ideally, you need to know how much money you will need in next 15-18 months. Risks of raising too little funds • You may not be able to spend money for acceleration of growth • You may not see the expected results • Competition catches up • You have to start fund-raising again and thus lose focus on building your business Risks of raising too much • You raise expectations of investors and if you fail to deliver, you stand to lose further investment, and (possibly) even the original investments • If they don’t give more funding, you will have to raise at a lower valuation which will bring down the value of business and negatively impact your market image. • The idle hand makes a poor decision. You take more aggressive chances and make wrong decisions. How you are going to spend your money matters to investors Investors don’t just want to throw around their money. They analyse 3 different major components of how you going to spend their money • Your product roadmap is very important. Investors like to know where you will take your company’s technology next and it matters a lot in their investment decision. • How much of your expenses are going to be over your revenues is also very important. Investors focus on the optimisation of cash flow. • You need to point out where you are going to spend the money specifically. Marketing, advertising, product development, hiring, etc. budget needs to be specified over a period of time. What does a perfect investor look like? • Has experience in similar field • Has time to guide you • Can add value and strategise How do you raise funds? • Investor pitch. What should be in the investor pitch? • Dynamic team • execution strategy • what you will do and what you did so far • market problem and solution • market landscape • roadmap A typical investment pitching process might take some 30-90 days. You need to be patient and plan ahead about the amount you need to raise. If you raise less, you will again have to spend up to 90 days in pitching and your business performance will eventually fall behind. Funding is just one piece of the entire puzzle; it helps you to accelerate your growth. It should never be seen as an achievement or goal, rather as a mean to achieve your objectives. •
Career 17 SUNDAY, DECEMBER 4, <strong>2016</strong> DT 7 deadly sins at work Personality traits that could sabotage your career • Sabrina Fatma Ahmad Do you find yourself changing jobs every couple of years because the “office politics” are getting too much? Here’s a newsflash: every organisation, by virtue of having a hierarchy, has a power structure, and this means politics is inevitable. In other words, there’s no escaping it. So if you’re unable to deal, maybe it’s time to look inwards to see if the problem may not lie with you. Even the best worker can fall prey to some social ills that turn an atmosphere toxic. Here are the seven pitfalls. Green eyed monsters A little competition is healthy. It provides you and your colleagues onus to push yourselves and do a little better. As a species, we’re used to comparing ourselves with one another, and whenever we come out on top by even a little, it’s a natural high. However, some people tend to have deep-seated insecurities, where competition is seen not as such, but as a threat, and thus their behaviours tend to be directed towards removing that threat. In other words, they’re jealous. And it is when this happens that the resentment, the backstabbing and sabotaging happens. If you find yourself feeling the work envy, take a moment to step back and ask yourself why this is so, and be honest. Is it really because the boss is playing favourites, or is it just that you feel threatened because you feel like you’re not good enough? The answer might just surprise you. If you’re on the receiving end of the work envy, take some time to identify the parties feeling it, and try to reassure them by taking interest in their life and work, and never being too smug around them. Monkey see, monkey do Every office has a certain work culture, and it pays to blend in to make things smoother on a day-to-day basis. This might mean dressing a certain way, or suppressing certain natural instincts in order to get along. Considering how much time we spend at work these days, when you start to get along with your colleagues, friendships form very quickly, and it’s a beautiful thing. However, it can also result in what we Bangalis like calling “cliquebaji”. When you have a group of people fitting in together, getting along, it’s only too easy to view anyone who’s slightly different through the lens of groupthink, and result in negative behaviour. It could be that one hijabi in the office that everyone shies away from, or that one guy who doesn’t smoke, that gets the smug sideeyes. If others are going all Mean Girls on them, it can be a problem. If you’re part of a group, remember that while it’s great to get along with everyone, you need to have your own opinions too. If you’re an outsider, consider blending a little bit in order to make things easier on yourself, but never feel like you have to give up on things that really matter. Stuck on a moment When the job is demanding, the comfort of familiar routines is increasingly sought after. A well-established workflow can make things run smoothly in the office. However, when the organisation gets too comfortable with doing things one way, a sort of rigor mortis sets in, and this can be a blow to innovation, and eventually cause the company to stagnate. If a new recruit or intern challenges the way things are done at work, take a moment to consider his/her point of view. Be open to new ideas so you don’t become inflexible. If you’re the young one up against hidebound traditionalists who absolutely refuse to change the way things are done, sorry. This is a battle you can’t win. Cut your losses and polish up your CV. All about me This is the age of selfies and self-expression. The notion of corporate loyalty is fast becoming obsolete, so that you are now expected to change jobs at least a couple of times in your career. Having said that, while it is important to put your needs first and think of how the job benefits you, there’s a line between being self-interested and just selfish. There’s still something called karma, so get on the lady’s good side by doing a few good deeds with no strings attached, and you’ll reap unexpected benefits. The quicksand Anyone who’s ever done a group project at school or uni will be familiar with this scenario: one person does the heavy lifting, a couple of people take “shortcuts”, and the rest pull a disappearing act faster than you can say Houdini. Work life is no different. There will always be people who take the easy way out, or shirk responsibilities. As a manager, you have to be aware of the slackers and hold them accountable. As a “star performer”, you need to manage your energies and learn to say no when your lazy co-worker asks you to cover for them yet another time. And if you’re the slacker, well...you’ll eventually get what’s coming to you. Don’t say you haven’t been warned. As changeable as the weather Human beings are moody, fickle creatures. They’ll break promises, change their minds and loyalties at the drop of a hat, and go back on decisions “set in stone”. This is Illustration: Bigstock all part of the bigger picture when you enter the workforce. Some people are more prone to getting carried away by emotions, and it can be hard to work with them. If you tend to be someone who has strong emotions, consider taking a step back before you act on them. If you’re on the receiving end of an emotional co-worker, treat the person with a certain amount of detachment, and you’ll be fine. Under the rug Confrontations are rarely pretty, and most people would rather avoid them. This is where passive aggressive behaviours come from. Left to fester, this can slowly poison the entire work atmosphere. Again, as a manager, it’s important to identify the source of conflict and try to mediate. If your co-worker is chronically passive aggressive, give that person a wide berth and try not to get involved. And if you feel like you have a problem with someone, sometimes a little communication is all it takes to smooth the waters. •
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