If you’re an entrepreneur, what’s your biggest nightmare? That your billion-dollar idea is really a dud? That your investors paint you in a corner with a convoluted term sheet? Or that despite having a great idea, you simply never find the investor of your dreams?
If you’re an entrepreneur, your nightmares are probably all of the above.
Startups in Asia raised US$205 million in seed funding in 2015, according to Tech In Asiadata. That’s from 490 deals. It sounds like a lot, but if you’re in the business, you know it isn’t as easy as it sounds, and the process comes with its own set of pains and worries.
And that’s where New Delhi-based Enablers comes in. It claims it will help startups not only find investors, but will also handhold them through the execution of all transactions so entrepreneurs are free to focus on core operations.
Founded by Neha Khanna and five others, this online deal-making service is planning to draw heavily from its founders’ investment banking experiences as it makes it a business to match startups with investors – and then some.
“The point is, once the entrepreneur is signed up, the onus is on us to ensure that we identify who the right investors could be,” Neha Khanna, director at Enablers, told Tech In Asia. She founded Enablers as an extension of Value Prolific Consulting Services (ValPro), a ten-year-old investment bank with offices in New Delhi and Mumbai.
“We’re not here to just find an investor, but to actually conduct the entire process – from helping with negotiations, dealing with term sheets, assisting with due diligence, and then helping with the commercial closure of the agreement.”
Enablers competes with the likes of Wishberry and Letsventure in India, both of which help startups find investment through crowdsourcing or angel investors.
But that, Neha insists, is where the similarities end.
While most other fundraising platforms act as meeting grounds for startups and mentor-investors, the company, founded in March last year, claims they offer more handholding than any others.
That includes working with startups to check their growth estimates, matching them to the right investors, running due diligence, negotiating for capital and on term sheets, and closing the deal.
“We didn’t believe in creating just a marketplace and leaving it to the entrepreneurs to work things out. We figured that was where the pain point was,” Neha said.
Curating the startups
But thorough handholding needs time and patience. While most such services can boast thousands of registrations, Neha said her plan was to stick to a couple of hundred at the most and keep the list heavily curated.
Last year, Enablers reviewed 300 startups and allowed only 60 in. Of those, three – luxury ecommerce store RocknShop, food tech startup Bite Club, and edutainment companyConveGenius – collectively raised around US$750,000 in funding.
Neha plans to close about four more fund raises this month.
To keep the list curated, Enablers charges startups an entry fee of about US$450, and asks for a “success fee” of two percent of the amount raised once a transaction is closed. A team of analysts and associates vet applicants, after which the team at Enablers makes a collective decision on whether the startup should be allowed on board.
“The analysts and associates spend between two to four weeks with the companies before we decide on taking them on,” said Neha.
But what about funding for Enablers’ own purposes?
Neha isn’t too eager.
“Honestly, we are not proactively looking to raise funds, but of course if a partner wants to come on board and it works out..,” Neha said, in a bid to keep all options open.