Evaluating Investments-Endiya’s Lens

"Clearly, there's nothing as challenging as crossing the chasm for a startup. But having the right set of investors by your side can make the journey less lonely. So what exactly does a venture capital firm look at when investing in early-stage startups?" Abhishek lists out what we at Endiya look for in startups and why?

Endiya is a launch pad for early-stage product companies focussed on digital industry & intelligent mobility, digital health & life sciences, and enterprise digital adoption. But what do we look for when evaluating a potential investment?

Funding for startups in India has evolved significantly over the past few years and so have our questions Here are a set of key questions we ask our founders when they walk in through our doors.

1. Idea – ‘Nice to Have’ vs. ‘Must Have’

What is the problem you are solving? Do you tackle the problem superficially or go to its roots? Your answer to this question drives ours. What is the problem you are trying to address? How is this problem addressed currently and where is the gap? How is your solution unique and compelling? Is it a ‘nice to have’ or ‘must have’?

We have seen that when founders build to address gaps or problems they have faced as consumers, users, or buyers, their approach is likely to be well thought through and empathetic.

2. Landscape - Know your Market, Customers & Value Proposition

Who are your customers? Where are the their burning challenges / pain-points? How does your customer’s life change (with you and without you)? How large is the addressable market and how have you arrived at this? Why is this the right time for you to build this company?

Understanding the market landscape as well as the customer is of prime importance.

3. Build to Scale - Know your Business Model

Who will pay and how much? What do the steady-state unit economics look like? How will you acquire customers at scale? How will you ensure that they continue to buy from you?

An effective business model necessitates a compelling value proposition and robust economics that can enable profitable, sustainable, and competitive growth at scale.

4. Competition – Understanding Competitive Advantage

Do you understand what factors will define competitive advantage for your target market? How much do you know about your competitors? How will you define the assets, design, scope and scale of your company to achieve competitive advantage?

The more you understand the competitive landscape, the better your chances of arriving at the optimal strategic positioning for your company. This goes a long way in building sustainable competitive advantage.

5. Tribe - Know your Strengths & Gaps

Does your team exhibit the right fit for the idea? Does it have the right vision and muscle to execute? Is it resilient enough to stick through tough times?

Great companies are led by excellent manageable teams that have the right expertise, knowledge, and skills. We look for teams that understand their strengths and weaknesses in equal measure. Mostly importantly your team must be ready to evolve as the company scales.

6. How far along are you?

How far along are you? Do you already have a product? Customers with use cases? What is the initial feedback / traction ?

We understand that this varies significantly based on business model, industry, funding needs, product development cycles etc. That being said, ecosystem valuation and customer feedback are important factors while analysing any business.

The Bottom Line

For an entrepreneur starting his / her journey, the fog of war is real. Knowing what you don’t know is critical. The objective should be to lessen “unknown unknowns” to minimize risks and ensure better preparedness. After all, “Luck favours the prepared mind”.

And on this journey, we are with you every step. Like good sherpas, we help you scale the most daunting heights.