Raising capital for the first time can seem daunting. If no one on your founding team has done it before, you’re bound to make mistakes. The only thing you can do to calm your nerves and feel more confident is get as prepared as possible. Luckily, most VC’s and angels have similar needs when it comes to the information they want to see before making an investment.
Here is a list of items we like to see at the Tandon Group before we consider investing in a company. While some startups will have more concrete information for each item on this checklist, you simply need to do your best to flush out your company’s position on each of these items:
Company Overview: Your overview should be an overarching description of your entire business. It’s usually best to complete this part of your preparation after you’ve gone over the rest of this checklist. The company overview will be a shortened version of the main points contained here.
Physical Location: Where is your company located? How many locations do you have? Where do you plan to open new locations? Is your team all “under one roof” or remotely based? Basically, spell out where and how your company is operating.
Founding Team: Most investors are looking to invest in a team of founders. While this isn’t a definitive rule, it’s usually a best practice to find someone who has complementary skills to your own. If you’re a coder or an engineer, you should find a business savvy co-founder (or vice versa).
Product Demo: At the very minimum, if you’re not a seasoned entrepreneur with past successes, you need to have something to show an investor. It doesn’t have to be as complicated as your final product but it needs to capture the essence of what you’re trying to do. Ideally, it proves your concept viable.
Addressable Market: You don’t want to go into an investment meeting saying that your addressable market is the entire world. You need to have a specific target audience, at least for your initial marketing efforts. Who is most likely to use your service? What’s their age, gender, interest, demographics, etc?
Problem/Solution: This goes hand-in-hand with your addressable market. Now that you know who you’re serving, what specific problem, need, or desire are you going to solve? The number one mistake we see entrepreneurs make is they create a product or service that no one actually needs or wants.
Business Model: How are you going to make money? You can start a business and not immediately monetize your user base but, eventually, you’re going to need a way to make it sustainable. Your product demo should align with your business model to show how you’re going to generate revenues and profits.
Competition: There’s a common saying, “business is cut-throat.” Your competitors are trying to steal your customers, take away your market share, and put you out of business. It’s in your company’s best interest to know exactly who all of your competitors are, where they operate, and how they operate.
Financials/Projections: You should always be able to show where you’ve spent every dollar and where you generated every cent of revenue from the beginning of your company’s existence. It’s simply bad accounting if you don’t have records of all the money you’ve spent and made so far.
Legal Information: How is your company legally formed? Is it an LLC, corporation, partnership or some other legal business entity? In most cases, you need to have this already setup before you go to any sort of investor because you’re not even going to be able to open a business bank account without having a company formed.
Past Funding: If you’ve raised money in the past this is going to be one of the first things investors are going to want to know. What was the last funding round valued at? How much equity was exchanged for what amount of money? What kind of shares and what sort of control do the previous investors have? These are all questions you going to need to make sure you have answers to.
Future Vision: Where do you envision taking this company? While most companies will need to pivot and change course multiple times during their lifetime, you should always have some sort of vision that you’re aiming to attain. A compelling vision aligns your employees, your investors, and your goals- so that everyone is on the same page.
If you follow the checklist above, your chances of raising capital for your startup will greatly increase. If you’re a startup founder looking to raise capital, Tandon Group wants to meet you. We have over 40+ years of startup experience and have invested in startups from many different sectors.
We’ve had numerous successful exits/acquisitions and would love for your company to be the next one. Reach out to us and we’ll get back to you with more information about setting up a meeting.
Before Tandon could become the preferred supplier for IBM’s floppy disk drives, M.L. Tandon had to solve an urgent problem. Finding reliable workers. When M.L. opened Tandon’s first plant in 1978, he faced three significant staffing challenges:
Indian engineers and workers at the time had no knowledge of the technology standards to manufacture floppy recording heads and drives
Because the men who typically filled assembly positions in India could find jobs anywhere, they weren’t loyal to one company
Training this existing labor pool proved costly due to the high turnover and the workers’ lack of experience with international production standards
In a bold move, M.L. Tandon decided to create a skilled workforce from scratch.
“I wouldn’t hire men,” he says. “Women, on the other hand, were an untapped pool of industrial talent. They have a strong work ethic, loyalty and superior manual dexterity for high-precision electronics.” Tandon also recruited high school graduates and dropouts. Since they didn’t have prior experience, they were easier to train and eager to learn higher production standards from the outset.
While today’s startup ecosystem in India is dramatically different from Tandon’s early days, hiring the right talent and staff for your business is still one of the biggest challenges founders face today. Whether you’re recruiting workers or acquiring talent, the people you bring in can make or break your business. To ensure you’re building a solid foundation, consider taking a page from the Tandon Group when it comes to hiring employees.
Don’t compromise: Like many startup founders, Tandon needed workers fast. M.L. was able to hire the former IBM India employees when he took over the plant after IBM was forced to close in 1977. It would have been fast and easy for Tandon to hire the men who were already filling entry-level assembly positions at the time, but in the long-term, it would’ve cost the company significantly in terms of time, money, energy and morale.
Search for employees beyond the usual sources: In today’s world, we have no shortage of sources to find people — career portals, job boards, recruiter websites. But you may find the best people where you least expect it. While technology, recruiters and staffing firms make it easier to connect with candidates, be open to the workforce or cultural trends and look for opportunities to tap into different talent pools.
Hire for trainability, passion, and positivity in addition to skill: Not only were the young women that Tandon hired open and eager to learn, they too valued the opportunity and took pride in their work. During one of Tandon’s annual employee art exhibitions, a female employee displayed a picture of a sick man lying on a cot, surrounded by three starving children and the words “I wish I had a son” (to earn money for the family) on the portrait. She made another picture that showed the same man and children, this time happy and with a platter full of food. The words on her second picture said “I don’t need a son because my daughter works at Tandon.”
Have a set of cultural values to hire for: Some people are so set in their ways, they won’t get behind your values. So be clear about what your values are so you can evaluate candidates for a cultural fit in addition to their skills and expertise. Respect for individuals was a guiding value that M.L. Tandon took away from IBM and integrated into his own company culture. It was also quite uncommon in India at that time since many of the companies treated workers differently than managers. India also had a reputation for producing poor quality goods. Not in Tandon’s plant though. M.L. saw first-hand how corporate efficiency and flawless quality put IBM at the top of the global market and he wanted that for Tandon too. Instead of the typical “chalta hai” philosophy of “good enough”, M.L. would tell workers “chalta hai, nehi” — chalta hai isn’t okay — whenever he walked the production floor.
Hire people you like, but who aren’t necessarily like you: Hiring people you like to work with goes along way toward creating the right kind of company culture. But many business owners make the mistake of hiring their clone. When you’re growing a business, keeping conflict to a minimum is a logical instinct. However, hiring people with different but complimentary skills, strengths, perceptions and even personality will be better for your business in the long run.
Be accessible: For M.L., quality means continuous improvement. He believes the best way to accomplish that is to instill a sense of empowerment and respect at all levels. By instituting an open door policy for any employee and working in collaboration with employees to solve problems together, M.L. has made it clear that everyone at Tandon is important.“I want my workers to feel like Tandon is just as much their company as mine,” he says.
Foster opportunities for creative and critical thinking: Hire resourceful people who enjoy tackling tricky problems, then give them the opportunity to do so. Critical and creative thinking forces employees and managers to look at situations in different ways, evaluate solutions that may not have been thought of by an individual alone and come up with the best solution. By fostering opportunities for creativity and critical thinking, Tandon has been inventing, innovating and finding solutions to problems since its inception. Encouraging entrepreneurship among its employees and mentoring talent for the future remains Tandon Group’s passion.
Tandon Group7 Enterprising Lessons from Tandon Group on Tackling Staffing Woes