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Motilal Oswal

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Motilal Oswal

Chairman & MD

Motilal Oswal Financial Advisors, Mumbai

Motilal Oswal is a member of:

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Common Challenges Startups Face

While India is a country brimming with entrepreneurial spirit; as far as investments in start-ups go ; India is not a very vibrant market  as you find in other developed countries (especially the US). Most of the investment in start ups have taken place in the IT and related space but I think there is a huge opportunity in other areas like education, food and other consumer products. There is a very imminent need of home grown venture funds who can provide long term capital to the start ups other than IT and E commerce.

My Advice If You are Starting Out

Most of the entrepreneurs are too lured by the big picture/ massive opportunity that they see in front of them and somewhere lose sight of the basic ground realities of business. In so many years, I have come across very lofty business plans but have seen very few achieving them. One of the key reasons for the same is the lack of planning of what can go wrong. The optimism should always be planned with caution and I think that’s one area where the budding entrepreneurs have to work big time.

While writing your first business plan one has to think about the dynamics of any business and should build enough cushion for delays and disappointments. The targets should be reasonable and every next target should be reset based on the achievement of the first one. Another important factor is that you should have not only a business plan; but also an execution plan. Many a strong business plan has come apart because the executional plan is not thought through and in-flexible.

We have the great advantage of finding out what has worked and not worked in the west. One should not only take inspiration from the same but should localize the same considering the Indian environment. For eg. The dot com or retail businesses that flourished in the US has not worked in the same fashion in India and there could be businesses that may grow exponentially in India and may not work at all in the US.

3 Piece Advice

Don’t be in hurry to raise capital. You may sell cheap or could get a wrong lender/ investor. Do enough home work and take advisor from experts.
Try to raise a mix of debt and equity , based on your needs.
Plan properly about the mode of raising capital and the duration. Equity may look cheap but actually it may be very costly in long-term.