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Inkmonk – The deep dive into fundraising – from learning hands on to raising $320k

Flashback to September 2014, Inkmonk had started out by attempting to bring the printing industry online. At this point Isaac, Founder of Inkmonk, says, he knew almost nothing about fundraising.

Flashback to September 2014, Inkmonk had started out by attempting to bring the printing industry online. At this point Isaac, Founder of Inkmonk, says, he knew almost nothing about fundraising. “We had our first customer ‘FreshDesk’ who had written us a check, and it was at this point that we began our first ever fundraising experience. Here is an excerpt into how it went and what we subsequently learn’t from it.”
I had gone to FreshDesk to collect the cheque, and met Girish, who at that time was not a very active investor. He was a well known “celebrity” kind of a star founder, but not yet an active investor.
During a simple conversation, Girish casually asked me whether I was considering raising money for my company. I wasn’t sure at that time — although I did want money — I hadn’t necessarily looked into it at that point and the fact remained, I knew almost nothing about raising funds. I asked Girish, why he’d posed such a question to me. To which he said,
“You guys are solving something very unique and interesting and your approach is unique as well. I have also not come across founders who personally deliver  the products and collect checks in person, till date.There is potential in your company and I’d like to invest in it”. 
This is how we entered the fundraising mode before we knew it, 
Before we actually received funding, we were in the initial talks about getting funded and simultaneously focused on saving some money. I had saved the money from my previous company and my co-founder Surya, had some Amazon stocks which he sold and we purchased a few printers for ourselves. Much like Myntra did, in their early days.
Girish, Our investor and Founder of FreshDesk, knew and understood the fact that I knew nothing about the process of raising funds itself, but he could tell that we (Inkmonk) were ready for it. So we didn’t really have time to think about it further and we dove right into it. 
What we understood from jumping right into the fundraising mode is that, it is a painstaking and time consuming process that we had to learn about hands-on. This was a very tough lesson we learnt, since we had no proper plan for funding at all. 
Key Learning from entering the Fundraising mode: 
Fundraising is a time consuming process. Looking back, I’d give this one piece of advice to startups looking to fundraise; Before you fundraise, make sure your co-founder is willing to take care of the entire product. We decided between us that I would be taking care of all the documents required and the rest of this process by myself. While Surya, my co-founder, managed the company. 
The actual “Fundraising” was just a matter of minutes. But, the process after fundraising i.e. the things that needed to be done; all this is not something that you can learn online. It is a unique experience for your company itself, which cannot be put on the blog. If it is on the blog, it is going to be very very generic and you might not be able to get a lot out of it. 
For example, We could not refer to another startup to build our company. In fact we were aiming at building a marketplace for printing which had not been done before. Hence, there is was no reference point for us. The market was undisrupted and we were taking our first, baby steps.
The other thing we understood was that,The first investment is basically not on the product but on the founders. As Jack Ma, Founder of Ali Baba said “when you have 1 million dollars, that’s your money.  When you have 10 million dollars you worry about inflation, When you have 1 billion dollars, that’s the trust from others. That’s not your money.” The first investment is a form of trust the investor is placing on the founders. Our investors trusted me and Surya. 
Even our customers loved and trusted us. Therefore we made sure that every product that we shipped out of InkMonk was quality perfect. At a point we started bouncing ideas of making this large scale. We were thinking globally but weren’t looking at reaching out to the whole world just yet, our goal was to capture at least the south side of India to start out with,but do it well.
Another important point to consider is that, one should raise money when you really don’t need money. Although it sounds like an oxymoron, it means your startup is generating enough money to grow organically.
We were taking very low salary and at times we couldn’t even pay our employees on time, but the employees stuck with us. The Investors gradually realised that money wasn’t that big of an issue for us and what we said to our investors was that, even if we don’t have enough money, we will still continue working. We trusted our employees and knew they were ready to work with us 24×7. Very frankly you should want to solve the problem at hand more than looking for the money. Having such an approach had a major impact in terms of investment.
As I mentioned earlier, I had gone to Girish to collect payments, and was shocked that he was offering me a bigger payment. Since he also knew I had no idea about how to go about it, he said “take a simple term sheet and give it to me, I’ll sign it and give you the investment.” He brought in his co-founder, and another investor. We signed 75k USD on the same day. So it was lucky that I went for a 25k INR check and It turned into a 75k investment. 
After Girish, it became very easy. Although, I was a little scared of raising funds. I didn’t know who the right Angel Investors were. We definitely knew that after we had raised the first round of funds, we set the ball rolling and that we should not look at raising anything lesser than that, as 75k USD was just the base level for our fundraise. So we should have a proper run way and we should raise funds through that runway. So then we started jotting down how much money that we really wanted.
At that time, I asked Girish what to do, (I would recommend not doing this, do not ask the investor this directly – For us Girish was more like an advisor more than an investor). Yet again Girish was able to give me the right advice. 
At this point I was a bit worried, and asked myself “Are we going too fast?”, I told Girish, I didn’t think I was ready to raise from VCs. I really wanted some good mentors more than the money. I had very very strict points when I was raising money. One I even wrote down was that: “I will never raise money from an investor who does not know the industry, who has not run a startup”. Luckily we asked for 250k USD, and the deal was closed for 320k USD. 
At a point, We realised we had to turn down a lot of investors, instead of it being the other way around. That was because I wanted to learn from them, specifically from those who are already running startups or the ones who have run a startup before. 
We got Phani from RedBus via LetsVenture, which was a very big catch for us. He had already built RedBus successfully, while we were looking at building a marketplace for printing. We all then collaborated together and we were able to raise the whole round within 2 – 3 phone calls.
After Phani, I met an investor who spent one and a half hours with me. He asked me the toughest questions. Every question was very clear and crisp, for which I unfortunately, had no answers. But I never left the room without knowing the answers. 
I believe, It is your company after all, and you need to know these things. Whatever it takes, just put in every effort possible to get the answers and learn. Make sure you learn, and with the next investor you’ll have the answers when you to talk to him.
By the time I spoke to  the last investor, It had boiled down to a 5 minute conversation, which is all it took to close the round. 
I would say, We set up the company only when we actively started putting in the effort into raising money. Until then we did not have a proper incorporation setup. 
Investor’s feedback: 
Initially the investors were a little scared of investing in us. The reason being Myntra had already started doing what we had planned to do. I think everyone will face this at some point where in the Investors will put forth another company in front of you and say, you know there is another company doing the same thing and they pivoted it into another area or that there is this another big company out there doing the same thing, etc. You would then have to decide what your answer would be when they give you this feedback.
My answer to that was, definitely! we will do it a 100 times over and better than what any other competitor in the market is doing, because the route we have chosen and the approach are both very different. The way we are solving the problems varies from the method the others have adopted in order to achieve the same. I don’t take into consideration the “good” that the others have done, rather I look at what didn’t work for them and try to solve that.  I would always consider what they did as being substandard, and try to solve it and lucky me, in this whole industry, every company I looked at out there wasn’t doing very well, and I could solve that. That is the attitude I approached it with, based on feedback.
At Inkmonk we always consider the customer’s perspective. Most of the current online players in print industry were not doing a great job. They still had 2 star ratings on their google reviews. In a fragmented industry like Print, there is only one person who can do an exemplary job and we wanted to show the world who this person was. Example, who is the cheapest T-Shirt printer in India? Who is the best quality Mug printer in India? There was no data about this and we decided to bring that to customers who actually wanted it in first place. This differentiated us from other big players in our market.
We only considered things didn’t know and where the others were lacking. We took that, we solved it. We showed that data to our investors. They said, fine, you guys know what you are doing and invested in us.
I didn’t know whether I was the right person to do this but I always kept in mind the fact that the investors are investing in you and not the company or the so called product. The product will keep changing, but you, The founder, are the one who is going to remain constant, and are going to be the one who runs the company. That is what is important i.e. whether are you able to handle that or not.
It is always best to solve something that you really love and something you are passionate about. Ask yourself, Do you really know the industry well enough to get into the industry? Despite the answer to that, always consider Learning about it, understanding the problems and then trying to solve it. There were so many companies wanting to solve the same problem as you before you, see what they’re doing wrong and try to solve that. 
Very often, there are people who just go to an investor, with a powerpoint presentation, not even a product, or an HTML page and really have nothing to show the investors and pitch to them. If you do that you are just wasting a lot of time. 
Instead invest your time into creating the perfect pitch before approaching the investors. Seek mentors who can advise you on this. 
Here’s an example of what worked for us, We had a clear customer acquisition cost. For example: We put in x amount of dollars in acquiring a customer and out of that 3 customers paid us around 3000 USD each. I was able to justify it with clear crisp numbers. 
Think about the process this way, The Investor’s money is rocket fuel and you need a rocket engine first. Without building a rocket engine, if you say, I am planning to build this engine and I need your money to build the engine itself, the investor might not be as interested. Reason being you have nothing to show him. 
Instead, I went to the investor saying, hey this is my rocket engine, building it is easy, but rocket fuel is the costliest thing, but I need rocket fuel to fly. That is the approach the investor in looking for during seed funding.
Another important thing is to have a strong culture within your team. We have a very open culture. Every one in the company knows if we are cash profitable or we are going dark. We have an open dashboard as well where we track how much we are making.
We came to know about LetsVenture which was the platform we used to raise funds, through our investor. So, before coming into LetsVenture I had a lead investor, which was kind of lucky for us, the investor who invested in us was Girish.
The biggest advantage of going to a platform like LetsVenture is that, “When you don’t know anything, you can still approach LetsVenture”. It is the right place to go. I am not an MBA grad. I am a visual communication student. I finished my college four years back and I started this company. I had good experience working in other startups. Although I learnt all the fundraising jargon language in the 4 – 5 months through LetsVenture. You need a good mentor to be able to learn that quickly. It is a very big course all by itself. That mentor was LetsVenture for me.
It was not about fundraising at all. The actual fund raising was just a phone call for me.
In fact LetsVenture had a conference call with all the investors put inside. Immediately every investor committed his investment amount and we closed it. Fundraising was just a matter of minutes. But, after fundraising the processes that we needed to go through, were not something that one could learn online. It is a unique experience for your company, which cannot be put in words. You need someone who is a mentor, someone with experience, who has been there done that. Before me, there were lots of startups that got funded on LetsVenture.
It was Girish who advised me to go to LetsVenture, saying the platform looked very interesting and he pulled me into LetsVenture along with him.
It is a fact that any founder who is raising the first round of funding for his first startup has never done this before, will definitely not know a lot about funding. (It is better to dive in and experience by learning and by doing.)
The good thing about LetsVenture is that you don’t always need to go to the Investors, they will come to you if your profile in interesting enough. All it took to close the round was about a week. The whole thing including, negotiating with the investors, although we weren’t actually negotiating, it was more of a simple, these are my terms, this is my ask – we were asking a decent amount of ask as well –  We kept our valuation at a very nominal rate. Once we agreed on these terms we closed the rounds.
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