Startups grow from one stage to another, from an idea to a profitable venture, and transforming an idea into a venture requires financial resources. Startup funding is like the backbone of any business’s growth. Startup Funding refers to the money required to start and run a business. It is a financial investment in a company for product development, manufacturing, sales and marketing, office spaces, and inventory. Startup funding rounds are a series of investments that raise capital for a new business. As a startup expands and becomes successful, each funding round serves as a stepping stone toward greater growth.<a href="https://www.planify.in/startup-funding/" target="_blank">Startup Funding</a> is the process of identifying and calibrating financial resources to enable your idea in the marketplace. For the various stages of growth that your startup would experience, resources would be required to fund the developmental processes. Therefore, startup funding is extremely important to run your startup at every stage. While many founders decide to fund everything independently for independence and to prevent debt and equity dilution, a lot of third-party organizations for providing the necessary capital like accelerators, venture capitalists, etc. are emerging.&nbsp; &nbsp;

Sources of FundingThere are multiple funding sources that facilitate small businesses with the required funds, majorly categorized into Equity and debt. Equity primarily includes Bootstrapping (Founder’s savings), Angel Investors, seed funding, venture capital, etc.As per industry experts, the founders should raise money via equity funding i.e., angel investors, friends &amp; family in the initial phase of the company and subsequently move to debt funding when they have a stable cash flow to honor the interest payments.&nbsp;Financing enables you to establish more sustainable business operations for the long term. It helps to expand, modernize, and diversify the business firm and purchase various resources.<div class="se-component se-image-container __se__float-center"><figure style="width: 651px;"><img alt="" data-align="center" data-file-name="67ngj1VQNITAgQIZAJGYEYtRIAAAQIECBAgQIAAAQIECBAgQOAnYAT+7JUJECBAgAABAgQIECBAgAABAgQIZAJGYEYtRIAAAQIECBAgQIAAAQIECBAgQOAnYAT+7JUJECBAgAABAgQIECBAgAABAgQIZAIDBtkgOEi8130AAAAASUVORK5CYII=" data-file-size="0" data-origin="651px,432px" data-proportion="true" data-size="651px,432px" origin-size="1282,852" src="https://testing-planify.s3.amazonaws.com/sun_editor/06e49a2e-b46a-4737-b0db-75e027b7d78c_image.png" style="margin-left: 0px; margin-top: 0px; width: 651px; height: 432px;"/></figure></div><ul><li style="font-size:16px">Bootstrapping: This is also known asself-funding, which is when the entrepreneur invests their funds into the business. This can include using personal savings, loans, or credit cards.</li><li style="font-size:16px">Friends and family: Many entrepreneurs turn to friends and family members to help fund their startups. This can involve asking for loans or investments, often with less stringent requirements than formal investors.</li><li style="font-size:15px">&nbsp;Angel investors: Angel investors are typically high-net-worth individuals who provide early-stage funding to startups in exchange for equity in the company. They often bring experience, contacts, and expertise to the table in addition to funding.</li><li style="font-size:15px">Venture capital: Venture capitalists are professional investors who typically provide larger amounts of funding to startups that show significant growth potential. They often take an active role in the company and may require a seat on the board of directors.&nbsp;</li><li style="font-size:15px;color:#000000;background-color:transparent">Accelerators and incubators: Accelerators and incubators are programs that provide funding, mentorship, and support to startups in exchange for equity. They often offer additional resources such as office space, legal and accounting services, and networking opportunities.&nbsp;Each of these funding sources has its benefits and drawbacks, and entrepreneurs should carefully consider which type of funding is best for their particular business and stage of growth. It's also important to note that raising funding can be a time-consuming and competitive process and may require significant effort and preparation.&nbsp;For instance, Airbnb is an online marketplace that allows people to rent out their homes to travelers. The company was founded in 2008 and has since raised over $4 billion in funding from a variety of sources, including venture capital firms, angel investors, and crowdfunding. &nbsp;Airbnb's success shows that there are a number of different ways to raise money for a startup. The best approach for you will depend on your specific business and needs.&nbsp;</li></ul><div style="text-align: left"></div>

How Startup Funding WorksWhen startups receive money from investors, it’s usually in exchange for a percentage of ownership in the company through equity. When funds are arranged in a formal way to fulfill a specific business need, it’s called a funding round. These usually include investments from venture capital firms or angel investors as well.&nbsp;Some Insights about Startup Funding<div class="se-component se-image-container __se__float-center"><figure style="width: 651px;"><img alt="" data-align="center" data-file-name="UPtHSziVy+AAAAAElFTkSuQmCC" data-file-size="0" data-origin="651px,391px" data-proportion="true" data-size="651px,391px" origin-size="752,452" src="https://testing-planify.s3.amazonaws.com/sun_editor/f9cdb90f-567f-4717-a74a-a6db828a7d9d_image.png" style="margin-left: 0px; margin-top: 0px; width: 651px; height: 391px;"/></figure></div>Source:&nbsp; Bain &amp; Company Research report&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<div class="se-component se-image-container __se__float-center"><figure style="width: 717.253px;"><img alt="" data-align="center" data-file-name="RAAAAAElFTkSuQmCC" data-file-size="0" data-origin="717.253px,388.422px" data-proportion="true" data-size="717.253px,388.422px" origin-size="794,430" src="https://testing-planify.s3.amazonaws.com/sun_editor/41948747-9233-468b-9d6f-d67f56508400_image.png" style="width: 717.253px; height: 388.422px;"/></figure></div> Source:Inc42&nbsp;Ecommerce, Fintech, Edtech, Enterprisetech, and Media &amp; Entertainment were among the most funded startup sectors in India from 2020 to 2022. Ecommerce and Fintech consistently attracted significant investments, while Edtech experienced steady growth. Enterprisetech and Media &amp; Entertainment sectors also received notable funding, indicating interest in innovative business solutions.&nbsp;

Metrics to assess Startups PerformanceHere are Some metrics that are commonly used to assess startup performance:<ul><li style="font-size:16px">Revenue: Revenue is the total amount of money generated by a startup from its products or services. It is a critical metric for measuring financial performance and growth.</li><li style="font-size:16px">Gross Margin: Gross margin is the difference between revenue and the direct costs associated with producing or delivering the product or service. It provides insights into the profitability of the core business operations.</li><li style="font-size:16px">Customer Acquisition Cost (CAC): CAC measures the amount of money a startup spends to acquire a new customer. It helps determine the effectiveness of marketing and sales efforts and whether the cost of acquiring customers is sustainable.</li><li style="font-size:16px">Monthly Active Users (MAU) or Daily Active Users (DAU): These metrics measure the number of unique users who engage with a startup's product or service on a monthly or daily basis, respectively. They provide insights into user engagement and the growth of the user base.</li><li style="font-size:16px">Burn Rate: The burn rate represents the rate at which a startup consumes its cash reserves or funding. It is a measure of how quickly the company is spending money and helps determine its runway or the time until it runs out of cash.</li><li style="font-size:16px">Churn Rate: The churn rate calculates the percentage of customers or subscribers who discontinue their relationship with the company over a specific period. It indicates customer retention and satisfaction levels and is important for identifying areas of improvement.</li><li style="font-size:16px">Customer Lifetime Value (CLV): CLV estimates the total revenue a business can expect from a single customer over their entire relationship with the company. It is a crucial metric for understanding the long-term profitability and sustainability of the customer base.</li><li style="font-size:16px">Return on Investment (ROI): ROI is a financial metric that evaluates the profitability of an investment. It measures the return or gain generated from an investment relative to its cost and is used to assess the efficiency and success of various initiatives or projects.</li></ul>ConclusionThe startup needs to assess why the funding is required, and the right amount to be raised. The startup should develop a milestone-based plan with clear timelines regarding what the startup wishes to do in the next 5 to 10 years. A financial forecast is a carefully constructed projection of company development over a given time period, taking into consideration projected sales data, as well as market and economic indicators. The cost of Production, Prototype Development, Research, Manufacturing, etc should be planned well. Based on this, the startup can decide what the next round of investment will be for.&nbsp;&nbsp;

Startups grow from one stage to another, from an idea to a profitable venture, and transforming an idea into a venture requires financial resources. Startup funding is like the backbone of any business’s growth. Startup Funding refers to the money required to start and run a business. It is a financial investment in a company for product development, manufacturing, sales and marketing, office spaces, and inventory.
Startup funding rounds are a series of investments that raise capital for a new business. As a startup expands and becomes successful, each funding round serves as a stepping stone toward greater growth.

Startup Funding: What It Is And How It Works

<span style="font-size:12pt;font-family:'Times New Roman';color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;"><a href="https://www.planify.in/growth-funding/" target="_blank">Growth funding</a> i.e. Series A onwards round of funding, is a form of financing used by companies to expand their footprints by investing in products, investing in R&amp;D, entering new markets, hiring new talent, acquiring assets, and making strategic acquisitions. The growth funding is segregated among various series of funding ranges from Series A to Series D (can further be extended). The amount of funding startups raise at the growth stage ranges between ~<span style="font-size:12pt;font-family:Arial;color:#202124;background-color:#ffffff;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">₹2<span style="font-size:12pt;font-family:'Times New Roman';color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">5 cr to <span style="font-size:12pt;font-family:Arial;color:#202124;background-color:#ffffff;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">₹<span style="font-size:12pt;font-family:'Times New Roman';color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">100+ cr.<span style='font-size: 12pt; font-family: "Times New Roman"; color: rgb(0, 0, 0); background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre-wrap;'>Series A is generally raised by firms that have already obtained traction in their respective markets but still need additional capital to reach further expansion goals. This Series A ranges between ~<span style="font-size: 12pt; font-family: Arial; color: rgb(32, 33, 36); font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre-wrap;">₹<span style='font-size: 12pt; font-family: "Times New Roman"; color: rgb(0, 0, 0); background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre-wrap;'>25cr to <span style="font-size: 12pt; font-family: Arial; color: rgb(32, 33, 36); font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre-wrap;">₹<span style='font-size: 12pt; font-family: "Times New Roman"; color: rgb(0, 0, 0); background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre-wrap;'>50cr. The fund generally lasts for 12 to 18 months.&nbsp; If a company still needs funds after this period to dominate its market, it can go through Series B funding. By the point a startup gets Series B funding, it’s already successful and the success could be in terms of successful deployment of product, penetrating into difficult markets, etc apart from positive net profit. Series B funding is mostly used for scale — not development.&nbsp;<span style='font-size: 12pt; font-family: "Times New Roman"; color: rgb(0, 0, 0); background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre-wrap;'>Post Series B, the company moves towards Series C, where the funding will be provided only to those companies which are profitable. These funds are often used to expand market reach or M&amp;A activities. While it’s possible to undertake later rounds of funding, they’re typically used to help organizations push toward Mezzanine Financing, Pre-IPO, and IPO. Series C round of funding expands the horizon of investors and extends to hedge funds, private equity firms, etc. At this stage, usually, the firms have a huge customer base, stable revenue flow, good margins growth, well-established R&amp;D facility, etc.&nbsp;<span style='font-size: 13pt; font-family: "Times New Roman"; color: rgb(0, 0, 0); background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre-wrap;'>Some factors to consider when determining how much growth funding to raise:<ul style="padding-inline-start: 48px;"><li aria-level="1" dir="ltr" style='list-style-type: disc; font-size: 12pt; font-family: "Times New Roman"; background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre;'><span style="font-size: 12pt; color: rgb(0, 0, 0); background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre-wrap;">Growth plans: Consider the company's growth plans and expansion strategies. The funding amount should align with the growth objectives and plans of the company.</li><li aria-level="1" dir="ltr" style='list-style-type: disc; font-size: 12pt; font-family: "Times New Roman"; background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre;'><span style="font-size: 12pt; color: rgb(0, 0, 0); background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre-wrap;">Internal Due diligence: Review the company's financial projections and business plan to determine the funding needed to support those projections. Consider factors such as projected revenue, expenses, and cash flow requirements to arrive at a funding amount that provides an adequate runway for growth.</li><li aria-level="1" dir="ltr" style='list-style-type: disc; font-size: 12pt; font-family: "Times New Roman"; background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre;'><span style="font-size: 12pt; color: rgb(0, 0, 0); background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre-wrap;">Valuation and equity dilution: Consider the company's valuation and equity dilution implications when raising growth funding. Higher funding amounts may result in higher equity dilution.</li></ul>

<span style="font-size:13.999999999999998pt;font-family:'Times New Roman';color:#000000;background-color:transparent;font-weight:700;font-style:normal;font-variant:normal;text-decoration:underline;-webkit-text-decoration-skip:none;text-decoration-skip-ink:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Types of Growth Funding<span style="font-size:13.999999999999998pt;font-family:'Times New Roman';color:#000000;background-color:transparent;font-weight:700;font-style:normal;font-variant:normal;text-decoration:underline;-webkit-text-decoration-skip:none;text-decoration-skip-ink:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">There are different types of growth funding available to businesses, including:<span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;"><ul style="margin-top:0;margin-bottom:0;padding-inline-start:48px;"><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Venture Capital: Venture capitalists are investors who provide funding to high-growth businesses in exchange for equity. They typically invest in startups or early-stage companies that have the potential for high returns.</li><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Private Equity: Private equity firms invest in established companies that are looking to expand or restructure their operations. They typically provide funding in exchange for a controlling stake in the company.</li><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Angel Investment: Angel investors are individuals who invest their own money in early-stage companies in exchange for equity. They typically invest smaller amounts than venture capitalists or private equity firms.</li><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Mezzanine Financing: Mezzanine financing is a hybrid of debt and equity financing that provides companies with capital to grow their operations. It's typically used by companies that have already raised some capital but need additional funding to achieve their growth goals.</li><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Strategic Investments: This type of funding involves partnerships with other companies that provide capital in exchange for a stake in the company. Strategic investments are often made by companies that are looking to gain access to new technologies or markets.</li></ul>

<span style="font-size:13.999999999999998pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:700;font-style:normal;font-variant:normal;text-decoration:underline;-webkit-text-decoration-skip:none;text-decoration-skip-ink:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Pros of Growth Funding<ul style="margin-top:0;margin-bottom:0;padding-inline-start:48px;"><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">One of the benefits of growth funding is that it allows startups to scale quickly and reach their full potential.&nbsp;</li><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Growth capital often comes from experienced investors who can provide strategic guidance, industry connections, and expertise to startups.&nbsp;</li><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Growth funding can provide startups with a competitive advantage over their competitors by enabling them to invest in key areas of their business and build a strong foundation for long-term success.</li></ul><span style="font-size:13.999999999999998pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:700;font-style:normal;font-variant:normal;text-decoration:underline;-webkit-text-decoration-skip:none;text-decoration-skip-ink:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Cons of Growth Funding<ul style="margin-top:0;margin-bottom:0;padding-inline-start:48px;"><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Growth funding often comes in exchange for equity, which can dilute the ownership of the founders.&nbsp;</li><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">With the dilution of equity, the involvement of multiple stakeholders could delay the execution of key decisions.&nbsp;</li></ul>

<span style="font-size:13.999999999999998pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:700;font-style:normal;font-variant:normal;text-decoration:underline;-webkit-text-decoration-skip:none;text-decoration-skip-ink:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Key Insights of Growth Funding<span style="font-size:13.999999999999998pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:700;font-style:normal;font-variant:normal;text-decoration:underline;-webkit-text-decoration-skip:none;text-decoration-skip-ink:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;"><span style="font-size: 12pt; background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; text-decoration-line: none; vertical-align: baseline;"><img height="454" src="https://testing-planify.s3.amazonaws.com/sun_editor/d48cd54f-5940-462c-b807-1b43a3a1cdd7_image.png" style="margin-left:0px;margin-top:0px;" width="643"/><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:700;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;"> Source:&nbsp; <span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Bain &amp; Company research report<span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Since Q4-2022, the growth-stage startups have experienced a slowdown in funding as they have to prove their profitability and have significantly higher capital requirements. The uncertain macroeconomic conditions, Russia Ukraine war, layoffs of multiple MNC’s, fear of upcoming recession has added to the gloominess of the funding environment across the globe<span style="font-size:12pt;font-family:'Times New Roman';color:#ff0000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">.&nbsp;<span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Challenged by this, companies took to different cost-cutting measures to conserve capital and prolong the exhaustion of funds. The focus largely shifted from rapid growth to revenue generation and profitability.<span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">According to the PWC report of FY22- Startup perspectives, funding winter mostly impacts the growth stage of startup funding. The funding in growth and late-stage deals continued to decline, with&nbsp; deals comprise around 79% of the total funding. As per Inc42, The growth stage funding has declined by ~11% in terms of deal volume and 4% in terms of deal value by $7.8bn in 2022 as compared to $7.8 in 2021.&nbsp;

<span style='font-size: 12pt; font-family: "Times New Roman"; color: rgb(3, 3, 3); background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alternates: normal; vertical-align: baseline; white-space: pre-wrap;'><img height="393" src="https://testing-planify.s3.amazonaws.com/sun_editor/017b86cc-74c0-44e8-b4ff-9344fbe8e6aa_image.png" style="margin-left:0px;margin-top:0px;" width="624"/><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:700;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;"> Source: <a href="https://inc42.com/features/growth-stage-startup-funding-trends-that-will-dominate-the-most-of-2023/" style="text-decoration:none;"><span style="font-size:12pt;font-family:'Times New Roman';color:#1155cc;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:underline;-webkit-text-decoration-skip:none;text-decoration-skip-ink:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Inc42</a><ul style="margin-top:0;margin-bottom:0;padding-inline-start:48px;"><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">The Indian startup ecosystem is expected to witness a significant increase in growth-stage deals in 2023, with investments reaching to $7.4 billion.</li><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">In 2022, growth-stage funding witnessed a remarkable surge of 273% compared to the $2 billion invested in 2020.</li><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Industry experts predict that in 2023, startups with a valuation exceeding $500 million and a focus on profitability will attract more funding.</li><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">When it comes to industry sectors, technology startups continue to dominate the growth funding landscape, receiving the majority of venture capital investment. The top five sectors for venture capital investment in 2021 were SaaS, Healthcare, Fintech, E-commerce, and Transportation.</li></ul><p style='list-style-type: disc; font-size: 12pt; font-family: "Times New Roman"; color: rgb(3, 3, 3); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre;'><ol></ol>Conclusion<span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Growth funding is a crucial stage for startups as <span style="font-size:12pt;font-family:'Times New Roman';color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">it is raised to help a company expand its operations, and invest in many different markets to explore expansion opportunities.&nbsp; <span style="font-size:12pt;font-family:'Times New Roman';color:#030303;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">It's important for startups to have a solid business plan, a clear growth strategy, and a strong team in place to successfully secure growth funding.&nbsp;

Growth funding i.e Series A onwards round of funding, is a form of financing used by companies to expand their footprints by investing into product, invest in R&D, enter new markets, hire new talent, acquire assets, and make strategic acquisitions. The growth funding is segregated among various series of funding range from Series A to Series D (can further be extended). The amount of funding startups raise at the growth stage ranges between ~₹25 cr to ₹100+ cr. 
Series A is generally raised by firms that have already obtained traction in their respective markets but still need additional capital to reach further expansion goals. This Series A ranges between ~₹25cr to ₹50cr. The fund generally lasts for 12 to 18 months.  If a company still needs funds after this period to dominate its market, it can go through Series B funding. By the point a startup gets Series B funding, it’s already successful and the success could be in terms of successful deployment of product, penetrating into difficult markets etc apart from positive net profit. Series B funding is mostly used for scale — not development.

What is Growth Funding & its types

‘Seed funding’ is the funding for a startup that happens when it is at the seedling stage i.e., inception, ideation, or the beginning stage. Seed funding is the first stage of investment for a business – where the business could consist of only a product idea and is still in the market validation process. Pre-seed or Seed funding is the first official round of funding that startups raise before moving into subsequent rounds, known as series A, B, C, and so on. Seed funding is typically provided by angel investors, venture capitalists, or other private investors. Most companies raising pre-seed and seed funding are valued at somewhere between $1 million and $6 million. The amount of funding can vary widely, but it is usually in the range of ₹1lakh to ₹1crore. Seed funding is usually used to cover the startup costs of the business, such as developing a product prototype, conducting market research, and hiring staff. As the funding comes at the inception or MVP stage, the risk and return compensate each other, by getting equity stake at a lower valuation but with higher existence and scalability risk involved.

Sources of Seed Funding There are different types of investors who provide seed funding: Crowdfunding: Crowdfunding is the practice of raising a small amount of funds from a large pool of individuals to finance a new business venture, typically via the Internet. Crowdfunding is considered illegal in India, however few of the popular online crowdfunding platforms such as typically via the Internet. Crowdfunding is considered illegal in India, however few of the popular online crowdfunding platforms such as SeedInvest Technology, and GoFundMe platforms. b. Incubators: Incubators can help early-stage companies grow, and generally invest small amounts of money at the ideation stage of the company. The purpose of investment majorly includes workspace assistance, networking opportunities, and mentorship programs. Demo days or pitch events are also common. c. Accelerators: Accelerators focus on assisting startup growth. In return for a set % of shares, they give startups a set amount of funding. Many provide indirect funding through mentorship opportunities or hosting networking events, demo days, or pitch events. Some accelerators also provide workspace assistance, such as access to technology and services that can help companies develop faster. d. Angel Investors: Angel investors are usually an accredited set of high net-worth individuals who invest seed capital for startups in the form of shares or convertible notes which allows money to be converted into shares. The angel investor benefits from an "early investor" discount. Angel investors are typically investors who provide seed funding but also provide advice and guidance to help the business grow. e. Angel Platforms: The specialized platforms allow the investors to invest much larger amounts of money, to get larger ownership stakes, and to earn greater potential gains. Angel groups are often made up of investors from many different sectors and markets who will decide as a group whether or not to invest, how much they should invest, and under what terms. f. Corporate seed funding: Bigger companies may look to invest in your business as a way of generating new ideas, and sources of talent and to move into new markets. g. Personal Savings: Often known as “Bootstrapping” - many founders use their personal savings to fund the early stages of their startup. The benefits are that personal savings may not need to be repaid or come with equity obligations - however, it may create financial issues for the founders.

<h2 style="line-height: 1.44">How Are Startups Valued During The Seed Round?</h2><h2 style="line-height: 1.44">Startup valuation during a seed funding round is hard. This is why most investors find alternate ways like convertible notes, SAFE, and KISS to invest first and find the valuation afterward. However, some startup investors do find methods to value a startup at the seed stage. These methods include:<ul><li style="font-size:19px;color:#0a0a0a;background-color:transparent">Berkus method: In this method, various qualitative elements like a sound idea, prototype, etc., are given weightage to decide on the final valuation of a startup.</li><li style="font-size:19px;color:#0a0a0a;background-color:transparent">Relative Valuation: Funding out the similar peers that have recently raised funds and understanding the valuation multiple and using the average multiple to compute the value.&nbsp;</li><li style="font-size:19px;color:#0a0a0a;background-color:transparent">Scorecard method: The scorecard Method is to determine the median pre-money valuation of pre-revenue/early-stage companies in the similar region and business sector of the target company and then to assign the weights to different factors that you can compare to other companies from your industry and region.</li></ul></h2><div style="text-align: justify"></div>

<ul><li style="font-size:16px">Sources of Seed Funding There are different types of investors who provide seed funding: Crowdfunding: Crowdfunding is the practice of raising a small amount of funds from a large pool of individuals to finance a new business venture, typically via the Internet. Crowdfunding is considered illegal in India, however few of the popular online crowdfunding platforms such as typically via the Internet. Crowdfunding is considered illegal in India, however few of the popular online crowdfunding platforms such as SeedInvest Technology, and GoFundMe platforms. b. Incubators: Incubators can help early-stage companies grow, and generally invest small amounts of money at the ideation stage of the company. The purpose of investment majorly includes workspace assistance, networking opportunities, and mentorship programs. Demo days or pitch events are also common. c. Accelerators: Accelerators focus on assisting startup growth. In return for a set % of shares, they give startups a set amount of funding. Many provide indirect funding through mentorship opportunities or hosting networking events, demo days, or pitch events. Some accelerators also provide workspace assistance, such as access to technology and services that can help companies develop faster. d. Angel Investors: Angel investors are usually an accredited set of high net-worth individuals who invest seed capital for startups in the form of shares or convertible notes which allows money to be converted into shares. The angel investor benefits from an "early investor" discount. Angel investors are typically investors who provide seed funding but also provide advice and guidance to help the business grow. e. Angel Platforms: The specialized platforms allow the investors to invest much larger amounts of money, to get larger ownership stakes, and to earn greater potential gains. Angel groups are often made up of investors from many different sectors and markets who will decide as a group whether or not to invest, how much they should invest, and under what terms. f. Corporate seed funding: Bigger companies may look to invest in your business as a way of generating new ideas, and sources of talent and to move into new markets. g. Personal Savings: Often known as “Bootstrapping” - many founders use their personal savings to fund the early stages of their startup. The benefits are that personal savings may not need to be repaid or come with equity obligations - however, it may create financial issues for the founders. </li></ul>

Funding winter Funding winter has impacted the overall start-up ecosystem. As per the recent Pwc report, fundraising has witnessed a downfall both in terms of volume and value. The entrepreneurs faced tough questions on valuations, business models, cash burn, etc. The industry has faced multiple down rounds and layoffs in the last 9 months. However, it is worth noting that the early-stage companies were insulated to an extent. In the recent PwC report, the share of early-stage funding in Q3 2022 accounted for 70% of total funding vis-a-vis 60% share in Q2 CY22 (in volume terms), where the average ticket size per deal ranged from USD 4–5 million per deal. In value terms, early-stage deals contributed around 21% of the total funding in Q3 CY22 compared to around 12% in Q2 CY22. The above numbers refer to the assumptions that early-stage funding is barred with the recent funding winter. Due to the simple fact that, the early-stage companies are because such startups are typically more agile, and leaner and offer a more attractive upside after the market recovers. Source: PWC Report How Seed Funding Works The process of seed funding typically involves the following steps: Pitching the Idea: The startup company presents its idea to potential investors in order to convince them to provide seed funding. This pitch usually includes a presentation and business plan that outlines the company's product or service, target market, competition, revenue model, and growth potential. Negotiating the Terms: Once an investor is interested in providing seed funding, negotiations begin to determine the amount of funding, the equity stake the investor will receive in the company, and any other terms and conditions that may be included in the investment agreement. Receiving the Funding: Once the terms are agreed upon, the investor provides the seed funding to the startup company. This funding is typically provided in exchange for equity in the company, meaning that the investor becomes a partial owner of the company. Using the Funding: The startup company uses the seed funding to develop its product or service, conduct market research, and hire staff. The goal is to use the funding to reach key milestones that will help the company grow and attract additional funding in the future. Attracting Additional Funding: As the company grows and achieves key milestones, it may seek additional funding in later rounds of investment. These rounds may involve larger investments from venture capitalists or other investors. Conclusion When starting a new business, one of the most important things you need to think about is funding. There are many ways to obtain the money you need to get your business off the ground, but one of the most common is seed capital. Seed capital is a good way for entrepreneurs and investors to network and build relationships, but seed money should be repaid as quickly as possible. Make sure to weigh the pros and cons carefully before making a decision. Overall, seed funding is an important type of investment that can help startups get off the ground and achieve their goals. Its unique features, such as its focus on potential rather than financial metrics, make it an attractive option for both investors and entrepreneurs. As the startup ecosystem continues to grow and evolve, we can expect to see more and more companies turning to seed funding as a way to fuel their growth and achieve success.

Seed Funding: What It Is and How It Works

<div>To sign up for the <a href="https://www.planify.in" target="_blank">Planify</a> Application, there are three ways by which you can easily connect that is:</div><div> </div><ul><li>Signup via Email&nbsp;</li><li>Signup through WhatsApp</li><li>Signup with a Google account</li></ul><div> </div><div>Let’s have a look step by step –</div><div> </div><div>Signup using Email</div><div> </div><div>Steps to follow</div><div> </div><div>a) It starts with login as, there will be options such as login as an investor, or partner, select the one as who you are.</div><div> </div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 421px;"><img alt="" data-align="center" data-file-name="cnaDtEP22T8P8DP33IoH88xcwAAAAASUVORK5CYII=" data-file-size="0" data-origin="421px,809px" data-proportion="true" data-size="421px,809px" origin-size="421,809" src="https://testing-planify.s3.amazonaws.com/sun_editor/04f3e91b-8c29-4565-93f6-25eb4f826433_image.png" style="font-size: 1rem; width: 421px; height: 809px;"/></figure></div><div>b) Enter your e-mail address and you will receive an OTP to verify the email address.</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 449px;"><img alt="" data-align="center" data-file-name="kAAAAABJRU5ErkJggg==" data-file-size="0" data-origin="449px,646px" data-proportion="true" data-size="449px,646px" origin-size="449,646" src="https://testing-planify.s3.amazonaws.com/sun_editor/5836db42-842d-4bb3-b392-45d50b534677_image.png" style="width: 449px; height: 646px;"/></figure></div><div style="text-align: center"> </div><div>c) Enter the OTP and set your login password and enter the referral id&nbsp;(which is optional).</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 433px;"><img alt="" data-align="center" data-file-name="cBGYtYGvSrMAAAAASUVORK5CYII=" data-file-size="0" data-origin="433px,567px" data-proportion="true" data-size="433px,567px" origin-size="433,567" src="https://testing-planify.s3.amazonaws.com/sun_editor/26aa62e0-891e-4621-b539-f94976b374ad_image.png" style="width: 433px; height: 567px;"/></figure></div><div style="text-align: center"> </div><div style="text-align: center"> </div><div>d) Next step is to verify your WhatsApp number. Enter the phone number and you will receive an OTP over WhatsApp.</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 437px;"><img alt="" data-align="center" data-file-name="wOx550leybBogAAAABJRU5ErkJggg==" data-file-size="0" data-origin="437px,472px" data-proportion="true" data-size="437px,472px" origin-size="437,472" src="https://testing-planify.s3.amazonaws.com/sun_editor/450f8894-ac02-4ce0-8fbb-c686e35bf128_image.png" style="width: 437px; height: 472px;"/></figure></div><div style="text-align: center"> </div><div> </div><div style="text-align: center"> </div><div>e) Enter the OTP which you have received, then create your 4-digit pin.</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 452px;"><img alt="" data-align="center" data-file-name="cx0cozT60QJRKJRCJp7HEgu4aglWeeWiE66EAQBEEQnAGtPPOIEAVBEARnRyvPPCJEQRAEwdnRyjOPCFEQBEFwdrTyzCNCFARBEJwdrTzziBAFQRAEZ0crzzwiREEQBMHZ0cozjwhREARBcHa08swjQhQEQRCcHa0884gQBUEQBGdHK888IkRBEATB2dHKM48IURAEQXB2tPLMI0IUBEEQnB2tPPOIEAVBEARnRyvPPCJEQRAEwdnRyjOPCFEQBEFwdrTyzCNCFARBEJwdrTzziBAFQRAEZ0crzzwiREEQBMHZ0cozjwhREARBcHa08swjQhQEQRCcHa0884gQBUEQBOcG+P93vV4zMyiv7gAAAABJRU5ErkJggg==" data-file-size="0" data-origin="452px,386px" data-proportion="true" data-size="452px,386px" origin-size="452,386" src="https://testing-planify.s3.amazonaws.com/sun_editor/0208263e-9034-4a25-9f76-38d8762101df_image.png" style="width: 452px; height: 386px;"/></figure></div><div style="text-align: center"> </div><div> </div><div style="text-align: center"> </div><div>f) Next, if you click on the Let’s Begin option, it will ask for the KYC process and if you click on skip, it will take you to Startup Page.</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 446px;"><img alt="" data-align="center" data-file-name="x+5bB6xOEaPaAAAAABJRU5ErkJggg==" data-file-size="0" data-origin="446px,692px" data-proportion="true" data-size="446px,692px" origin-size="446,692" src="https://testing-planify.s3.amazonaws.com/sun_editor/c5fe502d-9c33-440e-9168-0c5be501e7b1_image.png" style="width: 446px; height: 692px;"/></figure></div><div style="text-align: center"> </div><div> </div>

<div> </div><div>Signup through WhatsApp number&nbsp;</div><div> </div><div>Steps to follow</div><div>a) It starts with login as, there will be options such as login as an investor, or partner, select the one as who you are.</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 454px;"><img alt="" data-align="center" data-file-name="1ugpmAAAAAElFTkSuQmCC" data-file-size="0" data-origin="454px,716px" data-proportion="true" data-size="454px,716px" origin-size="454,716" src="https://testing-planify.s3.amazonaws.com/sun_editor/9a3753bd-93eb-4e6c-8c02-4e59ad1feb05_image.png" style="font-size: 1rem; width: 454px; height: 716px;"/></figure></div><div>b) While login via WhatsApp number, you will receive an OTP over WhatsApp.</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 437px;"><img alt="" data-align="center" data-file-name="wOx550leybBogAAAABJRU5ErkJggg==" data-file-size="0" data-origin="437px,472px" data-proportion="true" data-size="437px,472px" origin-size="437,472" src="https://testing-planify.s3.amazonaws.com/sun_editor/2c322002-35a7-4f41-baad-68d44770eb23_image.png" style="width: 437px; height: 472px;"/></figure></div><div style="text-align: center"> </div><div>c) Enter the OTP and set the login password and enter the referral id (which is optional).</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 433px;"><img alt="" data-align="center" data-file-name="wN+psjPte22kgAAAABJRU5ErkJggg==" data-file-size="0" data-origin="433px,568px" data-proportion="true" data-size="433px,568px" origin-size="433,568" src="https://testing-planify.s3.amazonaws.com/sun_editor/b3ba386f-000f-419b-9d7b-a9a98674a8aa_image.png" style="width: 433px; height: 568px;"/></figure></div><div style="text-align: center"> </div><div>d) Enter your email and subsequently, you will receive the OTP over email.</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 449px;"><img alt="" data-align="center" data-file-name="7HhNuCLK2KQAAAAASUVORK5CYII=" data-file-size="0" data-origin="449px,651px" data-proportion="true" data-size="449px,651px" origin-size="449,651" src="https://testing-planify.s3.amazonaws.com/sun_editor/7354e89d-a0a3-4531-807d-36d25f6c317a_image.png" style="width: 449px; height: 651px;"/></figure></div><div style="text-align: center"> </div><div>e) Create your 4-digit pin and set it to go.</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 452px;"><img alt="" data-align="center" data-file-name="cx0cozT60QJRKJRCJp7HEgu4aglWeeWiE66EAQBEEQnAGtPPOIEAVBEARnRyvPPCJEQRAEwdnRyjOPCFEQBEFwdrTyzCNCFARBEJwdrTzziBAFQRAEZ0crzzwiREEQBMHZ0cozjwhREARBcHa08swjQhQEQRCcHa0884gQBUEQBGdHK888IkRBEATB2dHKM48IURAEQXB2tPLMI0IUBEEQnB2tPPOIEAVBEARnRyvPPCJEQRAEwdnRyjOPCFEQBEFwdrTyzCNCFARBEJwdrTzziBAFQRAEZ0crzzwiREEQBMHZ0cozjwhREARBcHa08swjQhQEQRCcHa0884gQBUEQBOcG+P93vV4zMyiv7gAAAABJRU5ErkJggg==" data-file-size="0" data-origin="452px,386px" data-proportion="true" data-size="452px,386px" origin-size="452,386" src="https://testing-planify.s3.amazonaws.com/sun_editor/996e687c-a037-4097-a274-69555c97e645_image.png" style="width: 452px; height: 386px;"/></figure></div><div style="text-align: center"> </div><div>f) Next, if you click on the Let’s Begin option, it will ask for the KYC process and if you click on skip, it will take you to Startup Page.</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 446px;"><img alt="" data-align="center" data-file-name="x+5bB6xOEaPaAAAAABJRU5ErkJggg==" data-file-size="0" data-origin="446px,692px" data-proportion="true" data-size="446px,692px" origin-size="446,692" src="https://testing-planify.s3.amazonaws.com/sun_editor/bd681f73-5cea-4795-9888-ed3585407387_image.png" style="width: 446px; height: 692px;"/></figure></div><div style="text-align: center"> </div>

<div> </div><div>Signup using a Google account&nbsp;</div><div> </div><div>Steps to follow</div><div>a)&nbsp;&nbsp;It starts with login as, there will be options such as login as an investor, or partner, select the one as who you are.</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 454px;"><img alt="" data-align="center" data-file-name="wM3vuuzNtzLHgAAAABJRU5ErkJggg==" data-file-size="0" data-origin="454px,718px" data-proportion="true" data-size="454px,718px" origin-size="454,718" src="https://testing-planify.s3.amazonaws.com/sun_editor/db387eeb-3e57-4a72-8091-72e00d750d39_image.png" style="width: 454px; height: 718px;"/></figure></div><div style="text-align: center"> </div><div> </div><div style="text-align: center"> </div><div>b) Select your Gmail account.</div><div class="se-component se-image-container __se__float-center"><figure style="width: 449px;"><img alt="" data-align="center" data-file-name="7HhNuCLK2KQAAAAASUVORK5CYII=" data-file-size="0" data-origin="449px,651px" data-proportion="true" data-size="449px,651px" origin-size="449,651" src="https://testing-planify.s3.amazonaws.com/sun_editor/6de3454b-d1fd-4cd7-8317-443c16ac126a_image.png" style="font-size: 1rem; width: 449px; height: 651px;"/></figure></div><div>c) Then it will ask to verify your WhatsApp number and send an OTP over WhatsApp.</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 437px;"><img alt="" data-align="center" data-file-name="wOx550leybBogAAAABJRU5ErkJggg==" data-file-size="0" data-origin="437px,472px" data-proportion="true" data-size="437px,472px" origin-size="437,472" src="https://testing-planify.s3.amazonaws.com/sun_editor/41e3cddd-4977-4a53-92f6-843c2ef5dfd1_image.png" style="width: 437px; height: 472px;"/></figure></div><div style="text-align: center"> </div><div>d) Enter that OTP to complete the verification.</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 439px;"><img alt="" data-align="center" data-file-name="D8XC8AAAAASUVORK5CYII=" data-file-size="0" data-origin="439px,583px" data-proportion="true" data-size="439px,583px" origin-size="439,583" src="https://testing-planify.s3.amazonaws.com/sun_editor/6dbf6e9b-4947-46ca-b5c9-7d74e380db42_image.png" style="width: 439px; height: 583px;"/></figure></div><div style="text-align: center"> </div><div style="text-align: center"> </div><div>e) Next step is to&nbsp; create your 4-digit pin.&nbsp;</div><div> </div><div class="se-component se-image-container __se__float-center"><figure style="width: 452px;"><img alt="" data-align="center" data-file-name="cx0cozT60QJRKJRCJp7HEgu4aglWeeWiE66EAQBEEQnAGtPPOIEAVBEARnRyvPPCJEQRAEwdnRyjOPCFEQBEFwdrTyzCNCFARBEJwdrTzziBAFQRAEZ0crzzwiREEQBMHZ0cozjwhREARBcHa08swjQhQEQRCcHa0884gQBUEQBGdHK888IkRBEATB2dHKM48IURAEQXB2tPLMI0IUBEEQnB2tPPOIEAVBEARnRyvPPCJEQRAEwdnRyjOPCFEQBEFwdrTyzCNCFARBEJwdrTzziBAFQRAEZ0crzzwiREEQBMHZ0cozjwhREARBcHa08swjQhQEQRCcHa0884gQBUEQBOcG+P93vV4zMyiv7gAAAABJRU5ErkJggg==" data-file-size="0" data-origin="452px,386px" data-proportion="true" data-size="452px,386px" origin-size="452,386" src="https://testing-planify.s3.amazonaws.com/sun_editor/8ccd0591-546e-4334-969c-a03b044f6d6d_image.png" style="width: 452px; height: 386px;"/></figure></div><div style="text-align: center"> </div><div>f) Next, if you click on the Let’s Begin option, it will ask for the KYC process and if you click on skip, it will take you to Startup Page.</div><div class="se-component se-image-container __se__float-center"><figure style="width: 446px;"><img alt="" data-align="center" data-file-name="x+5bB6xOEaPaAAAAABJRU5ErkJggg==" data-file-size="0" data-origin="446px,692px" data-proportion="true" data-size="446px,692px" origin-size="446,692" src="https://testing-planify.s3.amazonaws.com/sun_editor/6a04b62d-61b2-473c-b208-a2e91d5df561_image.png" style="width: 446px; height: 692px;"/></figure></div><div style="text-align: center"> </div>

Sign up Flow: How to Sign up for the first time at Planify Application

The start-up ecosystem is emerging all over the world and has received increased interest from governments and investors, even in developing countries. The Economic Survey 2021-22 declared India as the third largest start-up ecosystem in the world, after US &amp; China. The government of India recognized over 14,000 start-ups taking the total number of start-ups to over 61,000.

​ India is home to over 100 unicorns, with a record 44 start-ups gaining unicorn status in 2021 itself. While it's great to see India’s start-up ecosystem booming, thanks to multiple initiatives taken by Central and State governments respectively, they also signify the importance of grooming an ecosystem that supports innovation. Entrepreneurs and Businesses thrive when they are supported by a community of like-minded people and organizations specifically meant to support innovation.

​ The overall PE/VC exits in 2021 were further augmented by a record-high number of PE-backed IPOs that were spurred by buoyant capital markets that saw excitement among institutional investors across FIIs and DIIs as well as historic participation from Retail Investors who wanted to invest in IPOs &amp; earn great returns.

​ Initiatives undertaken by the Government to support the Start-up ecosystem: The Government of India has launched multiple initiatives to foster innovation and support the start-up ecosystem in India. The Government of India has targeted SMEs contribution to the national GDP to reach 50% by 2024 and a big contribution towards this goal would be driven by startups. In fact, India with its wide-ranging expertise in developing a startup ecosystem in the country is also planning to help many developing and underdeveloped countries build a startup ecosystem. India has proposed the idea of a startup 20 engagement group as a part of the G20 summit scheduled to happen next year in India. Under the startup 20 engagement grouping, India is actively working with other members on sharing its knowledge and best practices in developing an ecosystem to help promote global innovation.

​ Startups to watch out for: In a significant boost to India’s toy manufacturing ambitions, Disney World has signed an exclusive agreement with <a target="_blank" href="https://www.planify.in/research-report/urban-tots-deepak-houseware-and-toys/">Urban Tots</a>, a leading toy manufacturing company in India that would enable <a href="https://www.planify.in/research-report/urban-tots-deepak-houseware-and-toys/" target="_blank">Urban Tots</a> to use popular Disney characters like Mickey Mouse, and Donald Duck over its toys. The company is also reportedly in talks with Indian Oil Corporation Limited (IOCL) to keep RS. 2 lakh worth of toys in each of the 3100 petrol pumps. The government is also playing its part in supporting toy manufacturing companies by introducing the Production Linked Incentive (PLI) scheme to incentivize businesses to meet not only domestic demand but also help increase India’s share in the export market. Pre-IPOs to watch out for: On 9th December 2022, India’s largest retail brand Reliance Retail announced the launch of the third store of its premium and fashion brand AZORTE at Sarah City Capital Mall in Kondapur. Spread across 18,000 Sq. feet of retail space, this store will strengthen Reliance Retail’s commitment to a multi-format approach to cater to all consumer segments and disrupt the way people in Hyderabad shop for fashion and lifestyle from domestic and international brands. On December 12, 2022, TATA Motors announced that the board has approved the IPO of its subsidiary TATA Technologies making it the 17th company overall under the TATA empire to get listed on the Stock exchange. TATA Technologies is a global product engineering and digital services company run by Warren Harris. It majorly focuses on 4 key verticals Automotive, Aerospace, Industrial Machinery, and Industrials.

The Economic Survey 2021-22 declared India as the third largest startup ecosystem in the world after US & China.

Rise of the Indian Startup Ecosystem

Startup World

​ Rise of the Women Startup Ecosystem: Women Entrepreneurs today own 8.05 Million or over 13% of the total business establishments in India according to the 6th economic census report released by Central Statistics Office (CSO). In recent years, the booming <a href="https://www.planify.in/startup-funding/" target="_blank">start-up</a> ecosystem and Indian startups turning unicorns have led to a boost in the momentum of women entrepreneurship. In India, 56% of total women-led enterprises are situated in only 5 states namely Tamil Nadu (13.51%), Kerala (11.35%), Andhra Pradesh (10.56%), West Bengal (10.33%) and Maharashtra (8.25%) with the remaining 44% being spread across different states.

​ Size of Women-run Enterprises: On the category of business size measured by the criteria of revenue &amp; no. of employees, the majority of women-owned businesses were likely to be Micro-enterprises or small businesses, with 68.5% reporting a revenue of under Rs. 10,00,000 in the last financial year. Another 23% reported revenues between Rs. 10,00,000 and RS. 50,00,000. Business Size (No. of Employees): In accordance with these revenue findings, a majority of enterprises, that is over 90% of enterprises had under 10 employees in their firms. It is important to note that while some women build large and scalable businesses, many more are in the micro business area and need support like smart management of capital.&nbsp; Industry-wise share of Women Entrepreneurs: Industry-wise the largest segment of women entrepreneurs (16%) belong to the Creative Services Category which consists of Writing, Designing etc. One of the key reasons behind this could be the relatively low entry barriers as well as do not require significant capital investments besides a computer/laptop and an internet connection. The second and third position is held by Health &amp; Allied and Apparel &amp; accessories respectively. Apart from that, about 30% belong to the other sectors which include Travel &amp; Tourism and manufacturing.&nbsp;

​ Prominent Women Entrepreneurs:

​ Government Initiatives:

Startups to Watch Out:​

Women Entrepreneurs today own 8.05 Million or over 13% of the total business establishments in India according to the 6th economic census report released by Central Statistics Office (CSO).

Women Entrepreneurs leading the Startup Revolution

Women Entrepreneurs leading the Startup World

Introduction: Sigachi Laboratories Limited operates as a Pharmaceutical company.&nbsp; Sigachi was incorporated in 1994 and has quickly established itself as one of the largest manufacturers of Pharmaceutical and Intermediary drugs. The company carries out investments in shares and securities. In fact, in the year 2021, the company generates most of its revenue from investments. Apart from manufacturing drugs, the company is known to mostly invest in Equity and Mutual Funds with its primary emphasis being on the Pharmaceuticals, Banking, and Energy sectors. The company has leased out its 2 factories from 1st November 2017 and hence the company is dependent on lease rentals from 1 party. Sigachi has its presence across 4 industries as listed below:<ol><li style="color: rgb(0, 0, 0);background-color: transparent">Pharmaceuticals</li><li style="color: rgb(0, 0, 0);background-color: transparent">Food and Nutraceutical</li><li style="color: rgb(0, 0, 0);background-color: transparent">Cosmetic</li><li style="color: rgb(0, 0, 0);background-color: transparent">Chemical</li></ol>

​ Sigachi Laboratories IPO Price: Currently, Sigachi has no plans to raise funds through an IPO. Since it's not listed on an IPO, it doesn’t have any listed price although Unlisted shares of Sigachi Laboratories Limited are available on Planify.&nbsp;Sigachi Laboratories Share Price: Sigachi Shares are available on Planify. <a href="https://www.planify.in/research-report/sigachi-laboratories-ltd/" target="_blank">Sigachi Laboratories Share Price</a> is listed on Planify Marketplace at Rs. 50 per share. Investors can gain the first mover advantage by investing in Sigachi Unlisted shares and earning exponential returns in the future.

​ Sigachi Laboratories Financial Performance: Sigachi Laboratories witnessed revenue growth of 123.49% in FY22, where it saw its total revenue increase from Rs. 1.73 Cr. in FY21 to Rs. 3.86 Cr. in FY22. Sigachi Limited’s net profit has also seen a significant hike of 289.79% in FY22, seeing their net profit increase from Rs. 71 Lakhs in FY21 to Rs. 2.75 Cr. in FY22. Sigachi’s Asset growth has also been quite significant. Sigachi’s assets have seen a growth of 33% in the last financial year. It stood at Rs. 20.45 Cr. in FY21 whereas it stood at Rs. 27.38 Cr. in FY22. Sigachi has also seen exponential growth of 288.57% in their Earning Per Share from Rs. 1.05 per share in FY21 to Rs. 4.08 per share in FY22. All these stats are evidence of the fact that people’s faith in the company’s long-term potential has only grown.&nbsp; The current ratio of the company has also seen a considerable improvement from where it stood in FY20, primarily due to increases in loans, advances, and current assets of Rs. 17 Lakhs, whilst the total current liability decreased by Rs. 1 Lakh, leading to a higher multiple. Sigachi has no interest or finance-related cost for FY22.

​ Peer Comparison: Sigachi Laboratories Limited leads the segment in terms of Market Capitalisation with a market cap. of Rs. 33.76 in 2021 in comparison to its closest competitor Ishita Drugs and Industries which stood at Rs.15 Cr. Sigachi also leads the way when it comes to Return on equity (RoE), even though only marginally. Sigachi stood at 11.81 in comparison to Ishita Drugs and Industries which stood at 11.25. Although Sigachi Laboratories gets left behind Ishita Drugs and Industries in terms of P/B &amp; P/E ratio. While Sigachi Industries stood at 1.45 in P/B, Ishita Drugs and Industries stood at 1.69. Sigachi Industries stood at 12.25 in P/E, and Ishita Drugs &amp; Industries firmly stood at 18.06 in P/E securing the numero uno position in this segment.&nbsp;

Sigachi Laboratories Limited operates as a Pharmaceutical company.  Sigachi was incorporated in 1994 and has quickly established itself as one of the largest manufacturers of Pharmaceutical and Intermediary drugs.

When can we expect Sigachi to launch its IPO?

Will we see Sigachi Laboratories Ltd. launch its IPO in 2023?

<span style="font-size: 15pt; font-family: Arial; color: rgb(0, 0, 0); background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Introduction: <span style="font-size: 14pt; font-family: Arial; color: rgb(0, 0, 0); background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; vertical-align: baseline; white-space: pre-wrap;">Start-up Funding or Start-up Capital is the money needed to launch a new business. In many cases, founders raise funds for the expansion of their business. This week 14 Indian start-ups raised funding of which 12 start-ups received a total of about 192 Mn$. Money view was the largest fundraiser taking a giant share of 75 Mn$. In the last week of December, 25 homegrown start-ups raised a total of 481.1 Mn$.

<span style="font-size: 15pt; font-family: Arial; color: rgb(0, 0, 0); background-color: transparent; font-style: normal; font-variant: normal; text-decoration: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Types of Start-up Funding: <span style="font-size: 14pt; font-family: Arial; color: rgb(0, 0, 0); background-color: transparent; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><a href="https://www.planify.in/startup-funding/" target="_blank">Startup funding</a><span style="font-size:13.999999999999998pt;font-family:Arial;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;"> is not limited to a narrow range of options. The decision as to which type of start-up funding suits a company’s requirements the most is based on it meeting a number of factors like amount of funding required, how much is the company self funding, does the company have enough credit to propel growth forward and your business history with respect to utilizing the amount of fund raised through various sources. <span style="font-size:13.999999999999998pt;font-family:Arial;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">One very key factor is the timing of raising funds. The timing of raising funds defines your objectives of raising funds. Often it has been seen that when a company raises funds in the initial stage which is also known as Pre-Seed Funding, it is generally done to meet your day to day requirements and establish your business. Personal Savings account for a major source of funding under Pre-Seed funding as Founders are aware of the fact that if they go to their potential investors for fundraising, founders should be willing to invest a proportionate amount of funds which would signify confidence of the founder in their company’s potential. Funds under Pre-Seed Funding are generally raised through friends, relatives or close acquaintances. Once a company has established itself and then if it begins to raise funds for its next phase of growth, funds are usually raised via Angel Investors and Venture Capitalists.

<span style="font-size: 15pt; font-family: Arial; color: rgb(0, 0, 0); background-color: transparent; font-style: normal; font-variant: normal; text-decoration: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Business Funding for Start-ups: <span style="font-size:13.999999999999998pt;font-family:Arial;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">It's basically money that companies use to help them grow and expand. And if you're a start-up company looking for funding, that's exactly what you need! The startup funding process is a complex one, and requires a lot of planning in advance. If you are thinking about starting your own business but don't know where to start, we can help. By showing you various sources of startup funding and explaining the ins-and-outs of each method, Planify will give you the information needed to make an informed decision on where your startup should go from here.<span style="font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Now let’s talk about Startup funding. <span style="font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:#ffffff;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">India is one of the fastest growing startup markets in the world. And with that growth comes a huge demand for start-up funding. We intend to help you find the correct type of funding that will help propel you to achieve your dream.<ol style="margin-top:0;margin-bottom:0;padding-inline-start:48px;"><li aria-level="1" dir="ltr" style="list-style-type:decimal;font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:#ffffff;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">First, make sure that your idea has a sound business model and market opportunity.</li><li aria-level="1" dir="ltr" style="list-style-type:decimal;font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:#ffffff;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Next, make sure that your idea has been patented or protected by intellectual property.&nbsp;</li><li aria-level="1" dir="ltr" style="list-style-type:decimal;font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:#ffffff;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Then, think about whether or not there is already an established organization or entity in India with whom you could partner.</li><li aria-level="1" dir="ltr" style="list-style-type:decimal;font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:#ffffff;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Finally, do some research on who might be involved with funding startups in your area and see if any of them have already done work like this before!<span style="font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">&nbsp;</li></ol><span style="font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:#ffffff;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Start-up funding can come in many forms—and it's important to know what you're looking for. When you're just starting out, seed funding might seem like the best choice. But if that's not what you're looking for, there are other ways to get the money you need.<span style="font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:#ffffff;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">There are several ways to access funding for your company, including:<ul style="margin-top:0;margin-bottom:0;padding-inline-start:48px;"><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:#ffffff;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Seed Funding</li><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:#ffffff;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Venture Capital &amp; Angel Investors</li><li aria-level="1" dir="ltr" style="list-style-type:disc;font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;"><span style="font-size:13.999999999999998pt;font-family:Arial;color:#222222;background-color:#ffffff;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Grants and Other Government Programs</li></ul> <span style="font-size:13.999999999999998pt;font-family:Arial;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Whether you're looking for capital to grow your business or to keep your existing one running smoothly, we've got options that will suit your needs perfectly. We can provide funding for start-ups at every stage of development: from seed stage to Start-up Funding to funding the growth stage and beyond. Our team of experts will work with you every step of the way to make sure your company gets the funding it needs to reach its goals.

<span style="font-size: 15pt; font-family: Arial; color: rgb(0, 0, 0); background-color: transparent; font-style: normal; font-variant: normal; text-decoration: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Start-up Financing:<span style="font-size: 15pt; font-family: Arial; color: rgb(0, 0, 0); background-color: transparent; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">&nbsp; <span style="font-size: 15pt; font-family: Arial; color: rgb(0, 0, 0); background-color: transparent; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><a href="https://www.planify.in/startup-funding/" target="_blank">Startup financing</a><span style="font-size:15pt;font-family:Arial;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;"> is a challenging, yet rewarding thing to do. It comes with a lot of challenges and opportunities. For start-ups, there are many issues and obstacles they face when they want to start a company. Starting your own company can be overwhelming because no one has experienced it before. The best thing is to get funding for your business as soon as you start working on it. There are multiple ways to get started and no two businesses are alike, so there is a lot of room for negotiation when choosing which approach works best for you and your project. Funds come from multiple sources and you might need help from other people, so understanding what each source offers will help with planning and creating questions that others can answer to help you along the way.

<span style="font-size: 15pt; font-family: Arial; color: rgb(0, 0, 0); background-color: transparent; font-style: normal; font-variant: normal; text-decoration: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Crowdfunding for Start-ups: <span style="font-size:13.999999999999998pt;font-family:Arial;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">There are other sources for founders to raise funds and these include <span style="font-size:13.999999999999998pt;font-family:Arial;color:#000000;background-color:transparent;font-weight:700;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Finding Investors Online<span style="font-size:13.999999999999998pt;font-family:Arial;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;"> on sites like Velocity . Other sources of fundraising include <span style="font-size:13.999999999999998pt;font-family:Arial;color:#000000;background-color:transparent;font-weight:700;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Crowdfunding websites<span style="font-size:13.999999999999998pt;font-family:Arial;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;"> as the name suggests focus on requesting the crowd to fund specific projects or businesses or social ventures. Under this, small amounts of funds are raised from a large set of investors by launching fundraising campaigns with aggressive advertisement to help market the project. These campaigns run for a specific duration and are gaining a great amount of traction these days.

Start-up Funding or Start-up Capital is the money needed to launch a new business.

How can startups raise funds for expansion?

How to get Start-up funding?

​ Traditionally the term <a target="_blank" href="https://www.planify.in/angel-investing/">angel investing</a> accounted for someone who supported a start-up company both financially with professional experience being particularly ‘hands on’. Angel Investors are typically the first people to provide capital to start-ups to help them establish their business in the initial phases. Some of the key reasons behind investing in Angel Investing are:<ol><li style="color: rgb(0, 0, 0);background-color: transparent">Potential for Significant Returns</li><li style="color: rgb(0, 0, 0);background-color: transparent">Portfolio Diversification</li><li style="color: rgb(0, 0, 0);background-color: transparent">Generous Tax Reliefs</li><li style="color: rgb(0, 0, 0);background-color: transparent">Supporting start-ups that can revolutionize industries</li><li style="color: rgb(0, 0, 0);background-color: transparent">Generating positive impact</li></ol>There’s a misconception that Angel Investors incur heavy losses while investing in start-ups. Let's take an example to understand that Angel investing can help you gain exponential returns. In this article, I’ll be highlighting 3 key points.

Mamaearth: I am sure all of us have heard of the brand Mamaearth. It offers best in class skincare products to help you discover the essence of beauty with the goodness of nature. When it comes to the cosmetics industry, most consumers are always concerned about how skincare products are being developed and what processes are being followed while manufacturing such products. This is precisely why the world is seeing the emergence of a new era of organic cosmetic products, produced in a natural way that are free of toxins and chemicals, keeping in mind the environment friendly nature. Three reason why investors should consider angel investing 1) Phenomenal Returns:&nbsp; Now let's talk about the returns generated Angel investors who invested in Mamaearth during initial years: <div style="margin-left:0pt"><table><tbody><tr><td>Angels</td><td>Invested</td><td>Year</td><td>Valuation</td><td>Multiple</td><td>RoI</td><td>CAGR</td></tr><tr><td>Suhail Sameer</td><td>₹ 15 L</td><td>2016</td><td>$ 2 Mn</td><td>1463x</td><td>₹ 220 Cr.</td><td>237.07%</td></tr><tr><td>Vijay Nehra</td><td>₹ 15 L</td><td>2016</td><td>$ 2 Mn</td><td>1463x</td><td>₹ 220 Cr.</td><td>237.07%</td></tr><tr><td>Shashank Shekhar</td><td>₹ 15 L</td><td>2016</td><td>$ 2 Mn</td><td>1463x</td><td>₹ 220 Cr.</td><td>237.07%</td></tr><tr><td>Kunal Bahl</td><td>₹ 69.6 L</td><td>2017</td><td>$ 5.16 Mn</td><td>567x</td><td>₹ 391 Cr.</td><td>187.25%</td></tr><tr><td>Rohit Bansal</td><td>₹ 69.6 L</td><td>2017</td><td>$ 5.16 Mn</td><td>567x</td><td>₹ 391 Cr.</td><td>187.25%</td></tr><tr><td>Shilpa Shetty</td><td>₹ 75.1 L</td><td>2018</td><td>$ 4.85 Mn</td><td>603x</td><td>₹ 453 Cr.</td><td>190.68%</td></tr></tbody></table></div> As is quite clearly visible by the data presented in the chart above, Investors have earned exponential returns after investing in Mamaearth.&nbsp;&nbsp; Suhail Sameer, Vijay Nehra and Shashank Shekhar are 3 prominent angel investors who benefited immensely from investing in Mamaearth in their initial phase.&nbsp;

Now lets talk about its <a target="_blank" href="https://www.planify.in/valuations/">valuation</a> w.r.t Initial Public Offering. Mamaearth is considering a $3 Bn worth IPO. At this rate all 3 who invested ₹15 Lakhs each in mamaearth in the year 2016 would make ₹ 220 Cr. each with 1463x returns at a CAGR of 329.80%.&nbsp; Lets consider a hypothetical situation where Mamaearth might not be able to achieve a $3 Bn valuation despite the fact that the company got their last funding at a valuation of $1.2 Bn. Assuming, even if the company tries to list itself at a valuation worth 1/5th of the amount projected to be raised under DRHP. From a conservative estimate, assuming the company lists itself at a valuation of 600 Mn$, Suhail Sameer would still make over ₹40 Cr. It is to be noted we have calculated this after dividing ₹220 Cr. returns by 5. This gives us over ₹44 Cr. returns at a CAGR of 211.57%. If Suhail Sameer, as an Angel Investor had invested ₹15 Lakhs in 10 - 20 companies, the total investment would have been around ₹3 Cr. If today, after 5-6 years, even one company turns out like Mamaearth which has helped him generate exponential returns, easily enough to cover a few losses that other investments might incur, still his return on Overall portfolio would be extraordinary, resulting in excellent CAGR. <div style="margin-left:0pt"><table><tbody><tr><td>Amount Invested in 2017</td><td>RoI in 2022</td><td>CAGR (After 5 yrs)</td></tr><tr><td>₹ 10,00,000</td><td>₹1,00,00,000</td><td>58.49%</td></tr><tr><td>₹ 1,00,00,000</td><td>₹25,00,00,000</td><td>201.71%</td></tr><tr><td>₹2,00,00,000</td><td>₹50,00,00,000</td><td>118.67%</td></tr></tbody></table></div> If an angel investor today invests ₹10,00,000 and in the next 5 years they’re able to get a return of ₹1 Crore, then the CAGR would be 58.49%. Here Mamaearth is giving a return of ₹100 Crores in 5 years at a CAGR of 298.11% which in itself shows the huge potential the company &amp; its products possess.

2) Fast Scalability:&nbsp; Let's look at the financial growth of the company 2016 onwards, when it got established. <div style="margin-left:0pt"><table><tbody><tr><td>Year</td><td>Revenue</td><td>EBITDA</td><td>Net Profit</td></tr><tr><td>2016-17</td><td>₹22.33 Lakhs</td><td>₹(0.30) Lakhs</td><td>₹(0.30) Lakhs</td></tr><tr><td>2017-18</td><td>₹5.39 Cr.</td><td>₹(0.34) Lakhs</td><td>₹(0.34) Lakhs</td></tr><tr><td>2018-19</td><td>₹17.90 Cr.</td><td>₹(3.50) Cr.</td><td>₹(3.50) Cr.</td></tr><tr><td>2019-20</td><td>₹112.01 Cr.</td><td>₹(5.91) Cr.</td><td>₹(5.91) Cr.</td></tr><tr><td>2020-21</td><td>₹472.10 Cr.</td><td>₹(132.46) Cr.</td><td>₹(133.22) Cr.</td></tr><tr><td>2021-22</td><td>₹ 964.34 Cr.</td><td>₹22.43 Cr.</td><td>₹14.44 Cr.</td></tr></tbody></table></div> One key thing that can be noticed in the chart is that the company despite incurring losses was able to scale at a very fast pace.&nbsp; Secondly, as we can see from the above table, the company in its initial 5 years incurred losses before it actually took off and started generating profits.&nbsp; In 2016, when prominent investors like Suhail Sameer, Vijay Nehra and Shashank Shekhar came onboard and invested ₹15 Lakhs, the company’s revenue was only ₹ 22 Lakh while both EBITDA and Net Profit were negative. Kunal Bahl and Rohit Bansal invested ₹ 69.6 Lakhs in 2017, company’s revenue was a meager ₹ 5.39 Cr. yet all of them persisted. All of them showed confidence and had conviction of doing well by investing in the company despite the company incurring losses. There are a couple of lessons that can be learnt here:<ol><li style="color: rgb(0, 0, 0)">Firstly, any potential investor needs to be aware about the background of the founder and her team, their expertise and how passionate the founder is about her company’s products. </li><li style="color: rgb(0, 0, 0);background-color: transparent">Secondly, investors also need to keep in mind the total addressable market along with the industry the company is operating in, which will help the potential investors analyze whether the product has any potential to make it big in the market, based on the serviceable obtainable market size and competitor’s products.</li></ol>​3) Asset Allocation:&nbsp; An angel investor’s scope for investment in start-ups should not be more than 20% or 1/5th of the funds available for investment. So, for instance, let's take an investor ‘Ram’ who has a networth of ₹10 Cr. and his annual earning is more than ₹ 50 Lacs - 1 Cr. Ram is a right candidate for becoming an angel investor as he has the ability to allocate funds to multiple startups with an average ticket size of ₹5-10 Lakhs. This way Ram, over the next 1-2 years can create a portfolio of 20-30 stocks whom he feels can generate good returns and scale fast.&nbsp; This would be only 20% of Ram’s total Asset allocation. Remaining funds can be further bifurcated where 40% are invested in listed companies and another 40% can be invested in other financial instruments like fixed deposits etc depending on his financial goals.&nbsp;

​ Conclusion Finally, Angel Investors might be interested to know that <a target="_blank" href="https://www.planify.in/">Planify</a> has multiple stocks in its marketplace where budding investors can invest in top emerging start-ups.&nbsp; Some key vetted start-ups include <a target="_blank" href="https://www.planify.in/research-report/urban-tots-deepak-houseware-and-toys/">Urban Tots</a>, Bazaar India and Madbow Ventures who not only have the capability to scale up in the next 5-7 years but also are PAT positive. Investors can gain the first mover advantage by taking bets worth ₹5-10 Lakhs and earn exponential returns in future.

Traditionally the term angel investing accounted for someone who supported a start-up company both financially with professional experience being particularly ‘hands on’.

Why should Investors invest in Angel Investing?

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