Our Partners ` KLE-Centre for Technology Innovation and Entrepreneurship October edition INDrone AERO SYSTEMS- ELEVATE 2018 winners K L E - C T I E Page 1
Cover story: INDrone Aero Systems ELEVATED 77 startups were announced as the winners of the second edition of ELEVATE 2018, a Govt of Karnataka initiative to recognize and promote startups from across Karnataka. It was a proud moment for KLE-CTIE, as one of their incubated startup was one of the winners in ELEVATE 2018. INDrone Aero Systems founded by Abhishek G Somanagoudar and Anurag Joshi. Both co-founders have done their masters in Aircraft design from Cranfield University, United Kingdom. They were gracious enough to share their experiences about their journey in ELEVATE 2018. They had applied during the first edition of ELEVATE initiative and unfortunately they did not make the cut. This year, the pitch was prepared using their previous experience, which was aided by the experience of the winners from the previous edition. The pitch was more focused rather than being general, INDrone had segregated the market and had identified their target sectors. The targetted sectors were: Infrastructure, Real-estate and Energy. A lot of projects were also executed in Andhra Pradesh and Karnataka during the time, which brought a lot of clarity in the direction that INDrone was headed into. This serves as a reminder that customer validation is essential for a startup to succeed and be relevant. 250 startups were shortlisted for the final round pitching, 77 were declared as winners The experience of Mr. Srinivasalu Reddy of SkyKrafts also helped them fine tune their pitch keeping in mind he had faced the jury successfully in the previous edition. These successes prove that if you have the will to succeed, it doesn t really matter if you come from a tier I or a tier II city. INDrone Aero Systems being a unique blend of product and its associated services company are well aware of the acute challenges that such a company faces in today s competitive world. The help extended by the Government will be a shot in the arm not just for INDrone but for several other startups who choose a path which is less travelled. K L E - C T I E Page 2
The voice of the Startup: Tweak Labs Inc During the early days, Samar and Adarsh used to come to college at 8.00AM and go back home at about 9.00PM. They would juggle classes and Tweak Labs and hence the workload would be shared between them. The core members of Tweak Labs comprise of Samar, Adarsh, Srihari and Vikas. Samar takes care of the business aspects of Tweak Labs, Vikas acts as the face of the company, Adrash and Srihari take care of the technical and backend operations of the company. Adarsh and Samar, had planned to participate in the annual Robot building competition during their first year of engineering. Their knowledge was very limited with respect to electronic components. An Arduino board was still a foreign term to them. The local stores weren t helpful as they didn t stock the components; had a lead time of atleast a week to procure them from outside and to add do it, there would be no guarantee that the product ordered would work. Getting quality components locally was a challenge most of the students would face. An opportunity presented itself to Samar and Adarsh, they grabbed it with both their hands. They thought of an in-house store which would sell components from basic resistors to complex exotic products such as Raspberry pie and so on. Tweak Labs would also offer technical assistance to the students to use these components. 27 th February 2016 was the birth of Tweak Labs which has now its presence in three more cities in India and plans to open up thirty more stores across the country. The initial jitters of being green in the business were evident in Tweak Labs Inc. They lost some orders due to inefficient supply chain practices and as a result were suspended for a few months from selling online. Tweaks Labs failed fast and learnt faster from their mistakes. Tweak Labs turnover exceeds INR 1crore. Currently, they are looking for funding and quality manpower to manage their operations in different branches. These failures helped them fine tune their processes. The other challenge that they face now is lack of quality manpower in the three branches that they have setup in Aurangabad, Islampur and Pune. This is hurting their USP of providing quality technical assistance to the students who seek their advice. From the funding point of view, they are looking for investors who can invest time and money into Tweak Labs and help them get expand across various parts of the country. back and provided them a smooth transition to the next level. K L E - C T I E Page 3
Guest column Are you a startup founder? Planning for funding? - The most exciting domain of startup ecosystem Funding Insights. Everyone thinks that to hit the startup, you need a funds, but that is halftruth. Getting a fund should not be the objective; it should be Plan B, in case you need it. Funding should require scaling up business and should not for building up, there might be some exception like where in prototype needs huge funds or some fintech s where they need to keep some deposits to regulation authorities. Everyone s idea, plan or model is unique, agreed, but not from investment perspective. More than 2,00,000 start-ups / companies are registered in India every year, comparatively funds from Angel s and VC s are limited and not growing in that proportion. So, investors are having great choice option with their capacity and the result is rejection number and percentage are getting higher so that s why we see people talking about inactiveness of Indian investors. Out of 100 only 5 business ideas have the potential to make it big in the long term. If you have got that kind of idea and needs some funds, first try these Family, Friends, Paying Customer, Outsourcing, Sharing economy. The best way is to get paying customer. Still if you are looking for funds then go strategically, plan it much ahead of time. Spend time on making your and your startups worth investing. Try and understand What investors looks for? And what kind of investor you are looking for? Prerequisites for funding - 1- Understand whether you and your startup is worth investing or not? 2- Do you really need funds or not? 3- Is it right time to raise the funds or not? 4- Have complete analysis before hiring any startup enablers and consultant. 5- Understand what value they can bring to your startup. 6- Speak with at least few experts in the space before going with anybody. Let me give you some insight. The major factors are, every investor has different interest, and each one has their own set of criteria. Decisions of investors may differ on the basis of facts; other s might be on the factor they feel for the people at the situation they came from or how they are struggling to make their startup run or how they present their idea in the equation. Some may be in the right frame of mind for risk-taking; others might be playing it safe for a while or waiting to see how K L E - C T I E Page 4
out-standing investments play out. What investors looks for? 1- Business Idea Innovation, Differentiation, Value Proposition 2- Business Model Product, Services, Business Development, Revenue Source, Process 3- Market Potential Market Adoption Index, Average Ticket Size 4- Scalability Geographical, Technological, Target Size 5- Team Credential, Skills, Confidence, Attitude, Business Acumen 6- Traction Customer, Sales, Revenue 7- Future Roadmap How big and practically you are planning. 8- Your Ask? Investment Required Too less or Too more 9- Equity Offered? Realistic and acceptable startup valuation. 10- Exit Value To compare ROI from different options. 11- Exit Options How easy or difficult will be? How Funding works? I have been working for many Start-ups since long. One of the greatest challenge is funding. Let s make it simple and will try to understand actually How it works? Assume you have started a business and now looking for funding. First understand Investment pattern has some rounds like seed, A, B, C please understand purpose of each round. (*** Note These explanation of rounds is just to understand the purpose. There are no standard definitions for this.) What kind of investor you should be looking for? 1- Domain Expertise 2- Ready to Mentor 3- Who can help in scaling up by providing connects, associates and opportunities. Seed (Sources Angel Investor, Family, and Friends) For making things happen / reality and getting first few buyers. Series A (Sources Angel Investor, Group of Angels, VC s, HNI s, Companies) Scale up to particular level. Series B (Sources Group of Angels, VC s, HNI s, Companies) Expansion and capturing more market Series C (Sources VC s, Companies) Making it more profitable, sustainable or reaching new heights. K L E - C T I E Page 5
Before going ahead, you need to make some plans and reports Pitch Deck + Business Valuation Consider your Start-up valuation is 8 INR. Seed Stage Pre valuation 8 (You own 100% 8 INR) Seed Investment 2 INR Post valuation 10 INR (You 80% 8 INR, Investor 1 20% 2 INR) Consider your Start-up valuation is 40 INR Series A Pre valuation 40 INR (You 80% 32 INR Investor 1 20% 8 INR) Series A Investment 20 INR Post valuation 60 INR (You 53% 32 Investor 1 13.66% 8 INR, Investor 2 33.33% 20 INR) Consider your Start-up valuation is 100 INR Series B Pre valuation 100 INR (You 53% 53 INR Investor 1 13.66% 13.66 INR, Investor 2 33.33% 33.33 INR) Series B Investment 40 INR Post valuation 140 INR (You 38% 53 INR Investor 1 10% 13.66 INR, Investor 2 24% 33.33 INR, Investor 3-28.50% 40 INR) About the Author Mr. Yogesh Thite Founder & CEO Meticulous Business Solutions Private Limited. A young, energetic and result oriented person. Yogesh helps people, start-ups & business houses to start, expand, grow and sustain the business. He works in the space of startup and business consulting. For queries, please contact: nayan.momaya@kletech.ac.in K L E - C T I E Page 6