EXPLAINED: Here is how investors can add value to startups beyond the investments

Investment is the blood of any startup, and is invaluable to the smooth operations of a start-up. Beyond the initial ideation, a startup often fails to scale as the promoter has a lack of funds, strategy or ideation. The need of the hour is the availability of a platform that not only connects investors to entrepreneurs but also makes the vision of “Make in India” a reality. Sanjeev K Krishnamoorthy, CEO & Co Founder, Kuberans House, explains how investors can add value to startups beyond the investments.

Sanjeev K Krishnamoorthy says, "The two and three tier cities of India has thrown up a plethora of innovative start-up ideas that need the assistance of such a platform to source, streamline and showcase these ideas. A unique platform, a first of its kind initiative, has the potential to create opportunity, provides commensurate exposure and visibility to the entrepreneurial venture."

Financial assistance and funding

Investors add immense value to a startup not only by providing capital and financial assistance, but by making available strategic planning, profound mentorship and a long term vision. The initial years are crucial for the growth of a startup and the seasoned investors have experiential knowledge of the domain and provide deep industry insights and mentorship. They tend to have faced issues in their tenure as entrepreneurs and this knowledge is essential to guide the startup to success. 

Decision making and handholding experience

The investor can play a role in decision making and help in achieving market penetration and profitable operating ratios. Customer satisfaction, cost effectiveness and relevance are often lost in the hustle to scale. A seasoned industry veteran can use market expertise to fill skilling gaps. They are also in a position to provide third party evaluations to help critically examine plans, operations and outcomes.

Networking is the creation of a vast and valuable connectivity to potential customer or talented employee bank. It is a massive advantage for startups to gain access to the right people to help scale. Skilling is an important part of a successful venture and investors can be the bridge to bring talent to a relatively unknown startup. 

Tier 2/3 cities often face a bigger challenge as entrepreneurs have limited access to investors as well as talent. Liaison third parties can be of immense help in being the mediatory in business talks and help entrepreneurs access funding and consequently scale. The investor interest also entails mentoring, grooming and incubation of viable entrepreneurial ventures to help them grow profitable and scale exponentially. 

Visibility and credibility

The startup gains credibility and visibility upon its association with industry doyens and stalwarts. Media attention and access to established domain consultants’ increases reach and adds value overall. The value additions that an investor brings to the table are as important as the moolah they pump into the business and increase the chances of success and scale.