siliconindia | | December 20189transactions at Series A or later get discussed - with the rationale be-ing that startups have neither the time, connections, or expertise to manage the fundraise all by them-selves. The rationale has also been that more complex and nuanced points of term sheets and share agreements are best negotiated by experienced people and not left to the founders themselves that have a biased (read "highly optimistic") view of the business and because of the fact that numerous human emotions get involved during ne-gotiations that have the potential to scupper the deal.However, the ecosystem is fast changing, and largely against tra-ditional bankers. The primary rea-son is the advent of incubators and accelerators that are fast taking up the role (or at least the preponder-ance of the responsibil-ity) of traditional inter-mediaries. Incubators and Accelerators iden-tify startups suitable to their charter and then work closely with them to fine-tune business plans, financials, fill key gaps in management team, inculcate pro-cesses of financial hy-giene, and help round out many tactical and strategic areas to ear-ly stage companies in their programs for the next phase of their growth.A small note here - Incubators and Accelerators are largely similar in their charter; they differ largely in the phase at which they engage with startups - with many incubators be-ing tied to prominent Universities and literally incubating companies from a business idea. Accelerators get involves in accelerating start-ups that have already done initial key things right - a product that is post-beta, management teams rounded out and the internal dynamics here being well formed, early customers/adopt-ers of their products, positive brand messages emerging, and so on.Most importantly, these entities, especially accelerators are fast playing the role of intermediaries by helping startups connect to the investor world. This is often done through a now ubiquitous 'Demo Day' where companies in the current cohort get to demonstrate their offering to groups of carefully selected investors - ones whose investing criteria is well-aligned to the current fundraise goals. Further, these accelerators are often well-versed in at least the basics of terms sheets and share agreements and by that token, are able to advise startups (in whom they already have equity) on negotiating tactics. Numerous term sheet templates are available today - in line with a trend towards making these simple and standardized - and perpetuated by companies like Y Combinator. Little, if any help, is needed to close these transactions, and even this is often provided by part-time CFOs.I see a trend emerging where such incubators and accelerators will play increasingly powerful roles in the startup ecosystem and a thorough shakeout occurring in the ranks of intermediaries whose businesses are predicated on Pre-A and Series A fund rounds. Not all accelerators will survive either; only sophisticated ones with highly pedigreed advisors, state-of-the-art scaling and market access credentials, and a deep understanding of the intricacies and timing of funding rounds will survive. Incubators and Accelerators iden tify startups suitable to their charter and then work closely with them to fine-tune business plans, financials, fill key gaps in management team, inculcate pro cesses of financial hy giene, and help round out many tactical and strategic areas to ear ly stage companies in their programs for the next phase of their growth Devang Mehta
< Page 8 | Page 10 >