Startup porn and the dark side of the funding stories in India

We all are blessed with power of imagination. Our capacity to do so, allows us to visualize great products/services or businesses. Some of us are bold (foolish or confident) enough to connect the dots moving forward and make a prototype. What next ? We wish to see it flourish like pinterest, facebook or twitter.   Our beliefs are :

Great idea + Working prototype+decent customer validation = Torrential rain of funds.

To our surprise, we see that cloud of investments does not come on our farms. These spicy stories of million dollar funding and billion dollar valuations are akin to startup porn. What is the reality of glitz behind startup industry specially in India ?

If you are curious, welcome to the dark side of the moon.

Dark side

These 12 small sentences describing what mostly happens after the honeymoon of great idea and prototype. This is not a story of sour grapes but an account of bad apples we encountered till we raised Angel investments from abroad.

  1. You try to pitch to investors/VC firms/tamashas called B plan contests ( especially from big media groups or B schools) .  They promise you a round table with VCs. You make it to top and feel positive that they will fund you. After a 5 page summary you write a 30 page plan but you come back with a GHANTA..
  2.  After that Ghanta, you start meeting people with matka ( pot bellies ). Most of them say nice things to you on face. Some will say- “The value of your startup is ZERO ( One investor has written an epic on why your startup is worth ZERO? ) . Many prophesize that they are doing a big favor by letting you work on the idea you are so passionate about.
  3.  If the matkas were not enough, they give you a lot of jhatka. This is Gyaan, sometimes useful (TAM,SAM ,SOM etc) and mostly…. // There are some langoors who hang on all startup events. The first thing they do is : Get into any group, ask what any Entrepreneur is doing and immediately YELL , “This doesnt work” . No matter what you tell him, he will parrot, it doesnt work. Beware of this specy, they write a BULLSHIT story of an entrepreneur next on their blogs/ forums etc.
  4. You will be asked a lot of questions. Some intelligent ones but mostly  ……. a putrid gas like- Has somebody done this earlier? Is this business model proven ?  // Note that business model of neither google, nor facebook, instagram, redbus or twitter or IPL was proven.
  5. You will pitch more and  asked to prepare  presentations which causes investor erection Yes, mammoth king size erection, ready to jack out his entire wealth. Remember, a VC doesnt grow money in farms. ( You  begin brushing/ shining your presentations. No  matter how many hours you put on ppt, it still falls short of causing erections ).. // No, you are not allowed to use Porn inside decks which causes real erections. Listen to  another gas- “An entrepreneur doesnt do homework.” In fact, most of the times,there is more work done by an entrepreneur than the time an investor has to c0nsume it.
  6. You work more on powerpoint and not on design or code…. There is another pain called elevator pitch which its said, is a red pill to funding.  Yes, the elevator pitch helps. Its odds are like-  You are in elevator with Angela Jolie and you blurt such a sexy 30 seconder that she will call you to her apartment and bed you in a fortnight. The odds are just that great. None of the 100 successful or failed entrepreneurs I have met have done elevator pitch rehearsals. // Zuckerberg hired a public speaking coach last year to improve his public speaking skills
  7. You will refine your already refined excel financial model the 1000th time… Even if its dynamic and even if they agree on all assumptions, they will still disagree with the final value of business. Give them 60% or 70% or 80% discounts on valuation.  // One investor said – He will take upto 80% stake and said he was doing a favor on entrepreneurs to let them work on the idea they are so passionate about.
  8. Pretenders will ask you 1000 questions on how the money will be spent?.. What entry barrier you have created? .. Whats your magic sauce? // Now hear the biggest of all gas – “So what you guys  have patent… It can be twisted, it has no value in consumer space.. Just a point in case – Google paid USD 400Mn to Stanford for exclusive license of software patent.
  9. You give 100 ways on money utilization.. They always scratch their holes, pluck one hair out and give you a master piece on how you are wasting money unless you hang yourself from walls and code with your… The Digvijay Singh of startup says- If I see an emaciated, ugly haired, red eyed guy who had not had sex for ages, I think he is the next Zuckerberg I should invest into. The idea is to look tortured..
  10. Having wasted your precious months on B Plans, competitions, startup beauty pageants , you will hear – “Its too early for us .. ” from SUCKERS. The same ones who say we have even invested in teams with just a plan on paper. The fart- ” We invest in team- not in idea ” actually means that if you as a first time director and can get Tom cruise to act, James Cameroon to direct and A R Rahaman to compose music for you, we will invest. The investment in a team is as likely as that.
  11. You have little choice but to boobstrap ..oops bootstrap your way to sustainability . Then  if you need of money, banks can give you 3 to 5 months of your average revenue as grwoth capital. You can then try for SIDBI collateral free loan CGTMSE of upto 3 Crores ( USD 0.5Mn ) to get traction and profitability.
  12. The investors will then tell, “They want to invest in your business to help it make big”.

If this has left some bitter taste in your mouth , either  shut  the F*** up and build your customers to  rule the world or read some funding porn on Desi imitations of Tech crunch  or the next web and jack off your startup idea.

For more real life humor on Startup Porn please visit this post by Robert Scoble  https://plus.google.com/111091089527727420853/posts/BGhAUBKav9J
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Comments

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About Purose

Arun Purohit is an entrepreneur and CEO of wicfy.com. He holds a masters degree in software systems from BITS PILANI and started his professional career in 1998 . In his 15 years career he has juggled multiple roles from manufacturing to missiles, from CAD to Web . He now works on product design, building the organization. His spare time is spent coaching kids on Chess, Boxing and playing squash or trekking hills near Pune
This entry was posted in Humor, Reality, Startups, Temptation, Torture and tagged , , , , , , . Bookmark the permalink.

5 Responses to Startup porn and the dark side of the funding stories in India

  1. Mridul says:

    Good one.
    Take and give the pleasure experiencing the ride.

  2. iank.it says:

    yaar ye rakhi sawant kon hai startups me?? naam batao!! or else give a hint.

  3. Vijay Anand says:

    Hmmmm, investor meeting ki saari frustration bahar nikali hai :)
    The world is like that mate… And thats why everybody doesnt do a startup.

    • Hi Vijay,

      This is not frustration. The startups are the most enjoyable acts a person can do besides making babies. Whats important is to bring out facts which people will not imagine :)

  4. MKS says:

    very well put!! I was laughing all the way while reading this but I knew that it is all true. I had faced such “gyaan” from investors in my 2 start ups. Great stuff!!!

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