galatime.com - Kaushik Gala

Note: The views & opinions expressed in these essays are strictly my own, and not those of any entity I may be associated with as an employee, consultant, promoter, investor, etc.

ARCHIVES

 

Pune

Technology Venture Investors in Pune

 

Technology Entrepreneurship in India - Teams

Entrepreneurial traits

Picking cofounders

 

Technology Entrepreneurship in India - Generating Revenue

Is your business model well-defined?

Your industry's value chain

What is your value proposition?

Which distribution channels will you use?

Who will drive business development?

 

Technology Entrepreneurship in India - Raising Capital

Venture capital & venture capitalists (VCs)

Corporate venture capital

Angels & angel networks in India

Government support for Indian startups

Proof-of-concept funding

Do you need a business plan?

How much money should you raise?

Startup valuation

Pitching to investors

Figure out the term sheet

Negotiating with investors

Due diligence - A necessary evil

Time to sign the investment agreements

 

Equities, ETFs, F&O

› Oct 2011: Equity Risk Premium for India

› Jun 2011: Investing in Indian equities

 

Technology Enterprises in India

› Nov 2010: Technology investment in India - WATER

› Aug 2010: Technology enterprises in India - 3 avatars

 

Risk Capital for MSMEs

› Mar 2010: Risk mitigation for investors in MSMEs

› Mar 2010: Why don't (Indian) MSMEs get risk capital?

› Feb 2010: Angel investing - Will it work for Indian MSMEs?

› Feb 2010: What's so special about innovative MSMEs?

› Feb 2010: Where do Indian/NRI (V)HNIs invest?

› Feb 2010: Funding options for innovative MSMEs in India

› Jan 2010: Innovative MSMEs in India

Your industry's value chain

(Last revised Apr-2012, Send comments to galatime@gmail.com)

A value chain depicts where/how your venture is positioned in the context of your industry and market. This qualitative picture includes an indication of how critical each stage in the value chain is, examples of companies in each stage, your direct competitors, and 2 - 3 options where your venture might position itself.

Ideally, a value chain should also quantify the value added at each stage, using metrics such as:

  • % of industry revenues captured at each stage
  • Profit margins at each stage
  • % of industry profits captured at each stage (a.k.a. profit pools)

The business model of a young technology venture is dynamic; thus its relevant value chain needs to be regularly updated / modified.

Tools

  • Use Google Images or Bing Images to look at sample value chains.

  • Instructions to create a profit pool model; the key challenge here is collecting enough data to make the analysis worthwhile.

Perspectives