Evaluating Investments-Endiya’s Lens

"Clearly, there's nothing as challenging as surviving the initial state of flux, for a start-up. However, having the right set of investors by your side can make the journey relatively less lonely. What exactly does a driven investment firm consider when investing in early-stage start-ups still remains a big question for many. " Abhishek lists out what do we at Endiya look for in start-ups and why?

Endiya is a launch pad for Indian product start-ups with global aspirations. But what do we look for when evaluating a start-up for investment?

What is your idea and Why? Is it the right time to introduce your product to the market? Will potential customers like the product? How unique is the business idea? How competent is the team? What's the market size? Is it big enough for you to create a meaningful, sustainable business? What are the market challenges, and how are you addressing them?  
These and other questions cloud the thought process.

These are only a few of the relevant questions that the potential investors have in mind when evaluating your start-up for investment. Clearly, there's nothing as challenging as surviving the initial state of flux, for a start-up. However, having the right set of investors by your side can make the journey relatively less lonely. The competition in the market today is intense, which means, it takes more than just a vision to stay ahead and well-connected. Therefore, when it comes to attracting one of the top VC firms in India, the struggle is real.

Endiya thrives on a mission to partner with exceptional entrepreneurs and start-ups that have the right potential to become world-class companies.

But what exactly does a driven investment firm consider when investing in early-stage start-ups still remains a big question for many. Before answering that, let us throw some light on who we are or what we stand for? 

Endiya - Helping Founders Propel Growth 

We are early-stage investors, who have experienced tough lonely roads as operators & entrepreneurs, and aim to address the funding gap that exists between the Angel and Series A rounds. 

Endiya invests in category-defining companies and markets that encourage innovation in Digital Transformation and Healthcare sectors. 

Funding for startups in India has evolved significantly over the past few years. So have the questions that founders in a quest to raise funds, get asked. Here we have compiled a set of key questions we ask our founders when they walk in through our doors.

1. Idea - Know your Necessity

Is it a ‘good to have’ or ‘must have’? Do you tackle the problem at the surface or dig in deeper to find the root cause? Your answer to this question drives ours. What is the problem you are trying to address? How this is addressed currently and where is the gap? What is your solution to the problem? How is your solution unique and compelling? 

When the founders have as consumers, users or buyers themselves faced a gap or a problem, and create an idea that is designed to address that, their approach is empathetic and takes into consideration the future customer’s needs and pain points.

2. Landscape - Know your Market, Customers & Value Proposition

Who are your customers? Where are the gaps today for your customers? How does your customer’s life change (with you and without you)? How large is the addressable market and how have you arrived at the market potential? Why is this the right time for your Company's product or service?

Knowing about the market landscape and customer dynamics are of prime importance. If you understand it, you can help us understand your company's true potential in the real world. Therefore, a compelling bottom-line reason is a must.

3. Tribe - Know your Strengths & Gaps

Does your team exhibit the right fit for the idea? Does it have the right vision and arsenal to execute it? Is it resilient enough to stick through the tough times? Can it tune in and resent the morale of their team? 

Investable companies are led by excellent teams that have the right expertise, knowledge, and skills. We look for teams that understand their strengths and are equally aware of their gaps. Your team must be talented and driven enough to evolve as the company scales. 

4. Competitive Edge - Know Your Competitors & Substitutes

How much do you know about your competitors? Can they turn out to be dark horses? Do you understand their product, customer value proposition, GTM, business model and pricing strategy?

In order to adapt well to the changing business requirements, any company needs to identify its competitor's market positioning, examine their business model and value proposition, take a peek at their pricing strategy and customer reviews etc. Identifying their bright and dark spots will help soothe the wrinkles in yours. The more comprehensive your competitive analysis, the easier it is for us to say yes to our union. 

5. Build to Scale - Know your Business Model

Who pays you and how much? What does your unit economics (cost vs price) look like? How would you acquire customers? How will you ensure that they will continue to buy from you? How would you scale your idea?

You should have a path to positive unit economics plan, robust GTM strategy, customer acquisition and retention strategy, product value proposition and roadmap, all of which are a part of a sound business model. An effective business model indicates that you understand the potential of your idea and you have a vision to scale it into a meaningful, sustainable, and fast-growing business.

6. Traction that multiplies - Know what works and what doesn’t 

Which stage of business are you in? Are you in the customer validation phase or PoC phase or already have customers with use cases? What is the feedback from your initial customers/traction?

A successful MVP (Minimum Value Product) confirms business feasibility – a factor that can make or break our decision to invest in your idea. Validating an idea and creating a positive impact on the customer are critical factors we consider while calculating the success of any business plan. 

The Bottom Line

When an entrepreneur starts the ride, there are a wide range of things that one doesn’t even know exists. Knowing what you don’t know is critical for decision making and healthy progress. But what can be more fatal is the inherent risks that are yet unidentified (“unknown unknowns”).

As an entrepreneur, the objective should be to identify as many “unknown unknowns” in order to minimize risks and ensure better preparedness.

While there are several channels and options available to raise capital (Loan, Friends & Family, Angel Investors, Crowdfunding), entrepreneur-centric VCs bring in empathy, operational experience, and risk-taking ability required to nurture and scale companies. We empower you to take risks and we stand with you like your idea races against the darkest of the times to emerge a champion. Like Sherpas, we strive to partner with exceptional entrepreneurs to help them climb the way and build world-class businesses.