Some start-ups go on raising funds in several funding rounds, while others either struggle to raise funds or keep investors at arm’s length. Which strategy is the best? – This question leaves several early-stage start-ups sleepless.
Apoorv Kumar, Co-Founder and Chief Technology Officer of Refyne, says the amount of funding a start-up raises does not indicate its success. “Funding comes with a lot of responsibility. It reflects the promises you made (to investors) on specific growth milestones,”
“Fundraising comes with responsibility and accountability. It adds a lot of pressure as we are supposed to deliver and meet the expectations. Investments come with a lot of responsibility. We use money for strategic purposes,” he said, explaining the reason behind turning down an offer for a huge investment into the start-up.
The start-up, which has raised $100 million so far, provides ‘salary on demand’ to employees who fall short of money towards the end of the month. Replying to a question what prompted them to start the venture, he said the founders noticed a sharp upsurge in the number of requests for small loans after the 20th of every month.
“It shows that a large number of employees fall short of money towards the end of the month. We found a need there and founded the startup,” he said.
Don’t get married to ideas
He also asked the young start-ups not to get married to their ideas. “If an idea doesn’t work, move on. Be humble. Starting up is the best way to find your strengths and weaknesses,” he advised.
Gaurav Samdaria, Chief Growth Officer of Perfios, asked the budding entrepreneurs to be ‘shameless’ in seeking help. “Raise money from your resources to fund the project. You can beg (for investments) or borrow. Be shameless in asking. While doing so, you must not violate moral boundaries” he said.
Samdaria, who sold his earlier venture Karza Technologies for about $100 million, traced back the challenges that he faced during the journey. “We used to struggle a lot to raise funds. We had to forego a significant chunk of equity to raise ₹2.5 crore,” he said.
Asking the college students to be cautious while attempting to start-up, he wanted them to work for a big or a growing company for a year or two. “It will help you understand the processes and challenges to get to your destination,” he said.
Apoorv and Gaurav were taking part in a fireside chat at the International Startup Festival 2024 here on Friday.
Hitesh Sachdev, Head (Startup Engagement and Investments) at ICICI Bank, who moderated the session, underscored the need to focus on the execution of the idea. “Execution is the key,” he pointed out.