One of the major hurdles in starting or scaling up a franchise business has been of arranging funds. But of late, there has been availability of number of options for getting the funds and it has given a birth or huge push to new generation of entrepreneu
From Private Equity to Venture Capital to Angel Funding, the options are vary in front of franchise brands based on the sort of business they are operating or the kind of requirements they have. Brands from various sectors are taking this mode of fund raising and big players are helping out the startups. Many startups like Snapdeal, Flipkart, FirstCry, Carl’s Jr and others have raised funds through one of these mediums. Major funding deals of the current year include Ola's $400 million in April, Snapdeal's $500 million by Alibaba and Practo raising $90 million in August.
As per a Merisis Advisors report, around 900 funding deals are to be inked in 2015. As many as 890 funding deals are expected to be signed in the telecom, media and technology space (TMT) in India this year, up from 515 deals last year.
Funding fundas by experts
Commenting on the funding issue, Ajay Ramasubramaniam, Director, Zone Start-ups, says, “If somebody is investing in your venture, then you should first get the clear understanding about the deal. Whether the person is going to sit with you in your meetings or is he putting some timing for you to deliver.”
Expressing similar views, Pranay Gupta, Co-Founder, 91 Springboard, adds, “First evaluate, what sort of funding suits your venture is it-PE (Private Equity) or VC (Venture Capital). Also, funding is a starting game, not the end game as your deal may last five years.”
“Yes, angels are not for social work, they also make money,” agrees Rajat Jain, Ex Vice Chairman, Neva Garments Ltd & Co-Founder, Paid Up Ventures. Shailesh V Singh, Executive Director, Seedfund Ventures opines, “While going with the investment deal, check whether the terms and conditions are negotiable or not. If they are, one should negotiate.”
Besides, experts and those in business also set aside concerns of some individuals that they fear their ideas might be taken away by the investors they approach. However, the experts say the investors are only concerned with their investment and returns and not about running their own venture by replicating someone else’s idea.