How to get first funding and start ruling?

In today's era of fast evolving businesses, raising funds from VC is not so easy. It has been noted that when Venture Capitalists are approached for this purpose, 99 per cent of the visits turn to a polite NO.

However, on the other day of this scenario, it is noticed that Venture Capitalists decry the lack of fundable opportunities in India. There is a gap that needs to be addressed in order to increase the investment opportunities in India.

Fundamentally speaking, the Venture Capital is a business of taking chances at Billion Dollar opportunities that require capital investments. Notice the big B of Billion and big C of Capital requirement.

It is advisable that before when you go to VC, you have plan target for them highlighting A) Very large upcoming market B) Scalable business that can be built and serve that market quickly, in less than 7-8 years C) Requires capital that can be utilized into non-linerarly impact the quality of the service. Once you cross the above hurdle, you are passed the "consideration" phase. It's not over though. Any angel, venture capital would want to talk, with additional qualifying questions around whether you can build, sustain and defend this business once the business is built and you experience the "attack of the clones". Investors will ask you about your barrier to entry. What stops others from copying you and decreasing the pieces? Your income evaporates? They will ask about your team composition and your management abilities to build such a business. You will need additional hands. Will you be able to attract right talent?

The last but not the least comes around "exit options". Great plans start from the end and this investment in no different. Most of VC have a fund lifetime of 7 years after which they need to return the money, with profits back to THEIR investors. For that, they need you to either be able to sell the company to someone or do an IPO. Either way, basically give back the money to venture capitalists. Do you know who would buy your company? Or Will your revenue and profits be in the position to do an IPO.

These are not easy questions to answer but something that answers these questions have high chances on embarking on building a great business.

(Ambarish Gupta is the CEO of Knowlarity.com)