Killing me softly with your Due Diligence – By Deepak Srinath

(This post was originally published on the VC Circle blog on October 14, 2011)

Why does it take so long for a venture deal to close after a term sheet is signed? This is a question entrepreneurs often ask in despair. This interminable state of Due Diligence (DD) kills entrepreneurs and I can’t think of too many reasons an investor would want to drag the process (other than issues with availability of funds).

For those of you who may not be familiar with the Venture Capital investment process, after a termsheet is signed an audit firm and a legal firm are usually appointed to do a financial and legal due diligence on the firm. Sometimes there is a business diligence or a technology diligence added to this, but more often than not the fund does this on their own. Based on the findings of the DD, there may be a renegotiation of the terms (unlikely in early stage firms) and the lawyers then draft the definitive agreements which usually comprise the Share Subscription and Share Holders agreements along with a bunch of other letters, board resolutions, etc.

Every time we sign a termsheet for one our clients, I make it a point to ask the fund how long they expect the Due Diligence (DD) and agreements drafting to take. The standard reply is that if all goes well the deal will close within a couple of months. Every single time, this has proved to be untrue; our experience has been anywhere from 3 to 6 months. Sometimes there are genuine reasons for this, but usually it is a combination of ignorance, incompetence, apathy and ego clashes that cause this wasteful delay.

A few observations on some of these delay factors:

1. Lack of preparedness of the company – It’s easy to pass on the buck to VC’s, auditor or lawyers for dragging the deal; entrepreneurs first need to make sure their own house is in order. Bad or non-existent accounting practices and lack of regulatory compliance are very often the cause to delay.  I’ve heard many entrepreneurs claim they are so busy building the business that they have no time for accounting or compliance issues. All it takes is engaging a good CA firm and keeping your eye on them. If the entrepreneur is using an investment banker, make sure they provide a basic DD checklist in advance and get things in order.

2. Engagement model with audit and legal firms – Audit and legal firms must be engaged on terms that do not give them an incentive for taking forever. The fee for the assignment should preferably be fixed and not hourly billing. Moreover, there must be a show cause and penalty for delays beyond agreed timelines.

3. The fund partner is not driving the process- Sometimes, the senior partner in the VC fund does the deal and leaves it to the junior associates to handle the DD. The juniors are not able to drive the process and exercise control over the firms doing the DD. Partners should stay involved or delegate authority to their juniors and communicate it to the firms doing the DD. This way a fund can influence the DD process and make it move faster.

4. Data checklist relevancy: More often than not DD firms use a standard requisition list of documents irrespective of the target’s sector. Even though it gets clarified during the course of the DD, it always adds a couple of week’s worth of back and forth and mostly redundant work. The fund should make sure that instead of a standard template, a relevant data checklist is sent out.

5. Audit and law firms using inexperienced resources – The DD is not just about gathering data; it requires some judgment calls on what is important and what is not. Inexperienced resources getting stuck on issues that are irrelevant or minor have caused much delay. The fund should make sure that the DD firms they appoint provide adequate supervision of junior resources.

6. Lawyers playing ego games – My lawyer friends won’t like this, but I’ve been in situations where the lawyers representing the fund and the entrepreneur start playing games of one-upmanship and endlessly debating technical terms that have very little impact on the terms of the deal. This is a really tricky situation because even if the fund and the entrepreneurs sense this happening, there is a perceived risk in asking their lawyers to let something pass and move it faster. Nevertheless, funds and entrepreneurs need to be aware of this and discuss it with their lawyers.

7. Simultaneous drafting of definitive agreements – It could be helpful (especially in early stage deals) if the lawyers are instructed to draft the definitive agreements in parallel to the DD. If changes are required based on the DD findings, they can always be incorporated. This can save a few days, instead of waiting for the DD to complete and then start drafting.

8. Lack of trust between the fund and the entrepreneur – In the deals I’ve worked on, when the level of trust has been high between the entrepreneur and the fund, deals have closed much faster. When the entrepreneur goes into a deal wary that he is going to get shafted, every single point is debated endlessly and deals take forever to close. Trust is something that gets built over time and through a lot of intangible actions. I can only urge entrepreneurs not to get into deals where they don’t trust the fund’s intentions completely.

Ideally, all venture deals should close in less than two months. Hopefully, this will become the norm rather than the exception as the VC space becomes more competitive and entrepreneurs more aware.

 

 

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Viedea’s pick of must read posts for October

The Viedea team tracks a number of blogs about the startup and investing world. We thought it would be useful to share some of the best blog posts we’ve come across in the past month with our community. We will make this a regular feature henceforth.

1.Building a Company vs Building a Business:  Fred Wilson of Union Square Ventures on the distinction between building a business and building a company; something all entrepreneurs need to understand.

http://bit.ly/rtv2mI

2. The Art of getting back pending dues from customers: Venky from efarm has posted this piece on pluggd.in. Every entrepreneur who’s done business in India has experienced the difficulties of recovering dues. Very relevant and topical post.

http://bit.ly/qtIaWN

3. How to sell your company : Entrepreneurs need to know how to sell. Some are born salesmen, some have to learn along the way. Entrepreneurs are rarely successful if they do not learn how to sell. This Techcrunch post talks about how being a good salesman does not mean you’re a good negotiator. Important distinction and some good tips on sales.

http://tcrn.ch/riAlZH

4. Understanding how dilution affects founders: This is a must read for any entrepreneur aspiring to raise capital. Mark Suster’s blog has a great infographic representation of how founders get diluted over fundraising rounds and the impact of ESOP pools and participating liquidation preferences on their returns. Fred Wilson and Brad Feld have also written some great posts on dilution, but this one has an easy to understand graphic.

http://tcrn.ch/poPNNf

The perils of taking seed money from VC funds – By Deepak Srinath

I met three interesting startup’s last week. All of them were founded by entrepreneurs in their late twenties or early thirties, who had been part of product teams in other startup’s or global tech firms. The startup’s were pre-revenue or had just signed up a few customers. Typically, in the Indian VC context, these firms would be considered too early by ‘early stage’ VC funds to do a Series A. They would be asked to come back in 6 months time when they had signed up more customers and had discernible revenue traction. However, to my surprise, all of them claimed to have termsheets or were in serious conversations with VC funds – not seed stage focused funds, but regular VC funds.  What’s even more surprising was that the quantum of funding they were offering ranged from $200K to $500K, not the usual $2 million plus that these funds like to invest.

A few top tier VC funds have started making investments in the realm of angels/seed stage funds. When a VC fund makes a seed type investment, they are essentially purchasing a low cost option to participate in a full round if the startup shapes up well. Unlike an angel investor or a seed fund, a VC fund’s economics don’t work on a  $200 K investment; their economics work on making much larger investments in each of their portfolio firms. So how does this matter to a startup as long as they get the money, right? Maybe not, let me explain.

In most cases when a VC fund makes a seed investment, they contractually tie in an option to lead the next round, which is typically in the $2 to $5 mil range. If the fund exercises this option, the startup loses out on talking to other funds and discovering the best possible valuation and terms. If the fund does not to exercise the option, other funds will be very wary to investing in the startup. Their view will be that if the fund who did the seed round and has an inside view of the startup does not want invest, surely there must be something amiss.

A few VC funds who make seed investments mention that they do not tie in an option on the next round for precisely this reason. Nevertheless, with or without a specific option to invest, if the fund does not participate for whatever reason, other VC’s will wonder what’s going on.

On the other hand when a startup takes money from an angel or seed stage fund, there is no expectation that they will participate in a follow on round. Their model is based on investing a small amount really early and guiding the startup through to a stage where they are ready for a VC fund to come in.

For long we’ve bemoaned the lack of adequate seed stage funding in India. This is clearly changing now with the more angel investors and seed stage funds springing up everyday. From an entrepreneur’s perspective, funding at every stage is critical. However, if entrepreneurs have alternatives, they must think carefully before taking seed money from a VC fund.

Internet Commerce Valuations: Pay for strong fundamentals, not for hype – Deepak Srinath

(This blog was first published on the VC Circle blog on 29 July 2011)

There is a raging debate in the US tech and financial media about the ‘tech bubble’ we apparently are in the midst of. Every journalist, blogger, VC and academic is either painting doomsday scenarios or vehemently denying there is a bubble. Either way, we’re seeing unprecedented valuations for social media and social commerce startup’s, both from VC’s and public markets.

US tech valuations seem to have had their affect on the Indian startup scene too. A few days ago The Economic Times carried an article on Snapdeal’s next round of funding – ‘sources close to the deal’ are quoted as saying that the deals site is raising INR 200 cr at a valuation of INR 1000 cr. Rumors are doing the rounds that Flipkart is raising its next round at a billion dollar valuation. If these valuations are halfway close to the truth, we’re talking multiples of 10 to 15 times their annualized run rate or Gross Merchandize Value-GMV (i.e., their current monthly sales multiplied by twelve). Are investors justified in paying such valuations? What about margins and net income, have they become irrelevant?

This debate about VC’s over paying for e-commerce startup’s is particularly important in the Indian startup context. VC funds in India, barring a handful, are still going through their first or second investment cycles and very few of them have seen big exits yet. Most early stage funds have significant exposure to e-commerce and need to show good exits in order to raise future funds. It may not be an exaggeration to say that the early stage ecosystem will suffer if VC’s have overpriced these investments and don’t make good returns.

I actually don’t think these valuations are as crazy as they are made out to be.

E-Commerce companies take a long time to become profitable. Amazon took seven years to turn in its first profitable quarter. Even today Amazon’s net income is small compared to Google or other tech giants. The market values Amazon (P/E of 82) for the kind of profitability it will deliver in future. If you take a closer look at investments in the internet commerce space in India, it is only the category leaders who command such valuation premiums. E-commerce worldwide is all about becoming the no. 1 or no. 2 player in a category and dominating it. So investors are essentially taking bets of firms who have demonstrated early traction and paying in anticipation of what they hope these companies will grow into in two or three years.

However, investors must be wary of paying valuation premiums based on GMV alone. GMV spikes can be achieved by deep discounts or cashback schemes and these will ultimately prove unsustainable unless you build loyalty and repeat purchases. Critical success factors in the long term are low Customer Acquisition Costs and high Customer Lifetime Value (CLV). Profitability will ensue if these two metrics are under control. Investors should be very careful not to pay for hype. As long as premiums are being paid for real fundamentals, all of us will be fine in the long run.

Observations on how good VC’s work – By Deepak Srinath

Two recent incidents prompted me to write this. The first was a VC meeting that left me super impressed- the fund partner had read through all the material we had sent him, analyzed data, made reference calls and asked the most perceptive and intelligent questions. What’s more, the meeting started exactly on time and even though he rejected the deal we were thankful for the insightful feedback. A few days later I was in another pitch to a couple of partners from a fund and one of them fell asleep- I’m not talking about a drowsy eyed yawn, this was chin on neck full on oblivion!! Maybe our pitch was boring, but that’s still no excuse.

The VC pitch phase can be a very jittery time for most entrepreneurs. VC’s become mythical gods who have the power to decide their destiny. As an i-banker I’ve had the opportunity to participate in pitches made to a lot of VC’s over the years. Every VC (the individual and the fund) has their own unique style of handling the pitching process and I’ve seen good, bad and the ugly. Here are a few reasons why I respect the VC’s I do-

1. They always value the entrepreneurs time – Anyone who’s gone through a pitching process is familiar with the ‘we’re running late on our previous meeting’ routine, especially when a VC from out of town has lined up 10 pitches in one day. A line that I’ve heard often enough is “what can be more important to the entrepreneur than pitching to us”. Good VC’s know how to plan their meetings and respect an entrepreneurs time.

2. They do meetings only if they’re really interested – Sometimes VC’s do meetings even when they know they’re not going to invest, maybe to gather information about a sector.  It’s easy to see through when there is no real intent to invest and entrepreneurs end up feeling very resentful.

3. Stay alert during meetings – It’s hard to sit through pitch after pitch and be excited about each one. Good VC’s have the ability to stay tuned in to every pitch they hear.

4.They do their prep – It’s always a great interaction when the VC understands the domain and has gone through the IM or done some background research. Their questions are so much more relevant and entrepreneurs appreciate it.

5. They respond to emails – Entrepreneurs hate it when they pitch to a VC and never hear back from them. Not responding to emails or calls after a meeting is inexcusable. No matter how busy you are, a one line email with a “sorry not interested, or I need a couple of weeks to think about it” helps the entrepreneur move forward.

6. They give candid feedback – Entrepreneurs always appreciate candid, constructive feedback and good VC’s know the art of doing this. Sometimes VC’s reject deals just based on gut feel or think that honest feedback will be too discouraging to the entrepreneur. Whatever it is, getting the right feedback is important for the entrepreneurs’ growth.

7. They engage, don’t dominate – Perhaps the most important skill of a good VC is the ability to engage and build an equitable, trusting relationship with the entrepreneur. This comes to the fore especially during term sheet negotiations. Too often VC’s hold a gun to the entrepreneur’s head and put them in a take it or leave it situation (and vice versa one may argue). If the rationale behind asking for certain terms is explained to the entrepreneur, the entrepreneur is more likely to agree to them (assuming the terms are not blatantly unreasonable).

I suspect VC’s who practice these traits will end being more successful investors, as the best entrepreneurs will prefer to partner with them.

 

A perfect example of innovation from India – By Alap Bharadwaj

Recently, in a meeting with a VC from a tier 1 global fund, the conversation turned to India’s tech companies and the ideas that these companies are built on. The VC made an all encompassing statement to the effect that every single venture funded Indian tech startup recently has ‘absorbed’ its basic idea from a similar company in the US. The statement was loaded but one that could not, for the most part, be countered. It made me feel disappointed and put a serious question mark on the creativity of nouveau Indian entrepreneurs. I have blogged about this before, and to be perfectly honest – the apparent “apathy” tech entrepreneurs are showing towards actually building out a unique idea SUCKS. Has an Indian company come up in the recent past with an idea before its western counterpart? I am sure many have, but have they been able to drive scale using technology before the western equivalent? I am thrilled to report; the answer came to me on a recent trip to Hyderabad.

Travelling from my house to the Bangalore airport, and then to various meetings in Hyderabad and back was all enabled by one phenomenal Indian company – Meru Cabs. Meru, since 2007 has leveraged GPS to the maximum, efficiently allowing cabs to service customers closest to them, provide great service, reduce a ton of consumer frustration and make entrepreneurs of over 5000 drivers in India. I know what you’re thinking right now – so which western equivalent did they beat out to the implementation of this idea? That would be San Francisco based Uber – a company that has been getting rave reviews from the TechCrunch faithful for months now.

An analysis of the two companies will reveal differences in their business models. While Meru is more of a supply player (the company owns every single one of their 5000+ cabs) Uber is an intermediary that consolidates demand via a mobile app. The secret sauce of both companies is the same though – the ability to track, in real time, a cab’s location and then push relevant demand of transportation services to these cabs. Isn’t Uber better in terms of payment you ask? Uber allows users to pay using the credit card that is on file with the app, while Meru allows their customers to pay via a swipe of their credit card right in the cab as well.

The best part about Meru though is the “Indian-ness” of their model, in allowing so many cab drivers to make a better living by allowing them to offer a better service backed by robust technology. To say I’m impressed with Meru is an understatement, but I’d like to end by stressing that I am not in any way shape or form running down Uber. They are a fantastic American startup with a truly disruptive idea, backed by an amazing set of early investors in First Round, Lowercase Capital and a host of angels. I am just ecstatic, as an Indian, to have such a compelling business model be executed so well in India before it was done out of the Valley!

Do let me know the other Indian companies who, in your opinion, have implemented a disruptive idea before Silicon Valley has.

Mentoring 2.0, Y not YC? – Deepak Srinath

I recently wrote a blog piece about the growing trend of self professed ‘mentors’ in the startup world. This generated a lot of feedback from friends in the startup community saying how much it struck a chord with them. Interestingly enough, we often receive the suggestion that Viedea should start aYCombinator type of startup accelerator model adapted for India (for those of you not familiar with it, YC developed a model of making a small seed investment and then working closely with founders over an intense 3 month boot camp http://ycombinator.com/). On the face of it this makes a lot of sense – we are probably the only advisory firm in India focused exclusively on the VC ecosystem, we understand what it takes to ‘dress up’ a firm for funding and all of us on the team have entrepreneurial as well as operating experience. We’ve spent a lot of time thinking about the mentoring/incubation issue and continue to shy away from it.  I thought I’d share a few ideas on what would make a startup accelerator work (and perhaps these are reasons why we don’t start one 🙂 ) –

1. Rockstars and Hackers – The people who founded and/ or the people who provide mentorship at the most successful startup accelerators in the world- YC, Techstars, etc- are bona fide rockstars. They are super successful entrepreneurs, hackers or investors. Their achievements and aura not only enables them to give great advice to entrepreneurs, they also have the networks to open doors to investors, customers and other advisors. This quote from a YC alumnus in a  NYTimes article on YC says it all, “It’s like Rob De Niro wants to start an acting school. Do you want to join it? You get to work with him every week, you might even get a small little movie deal out of it at the end.”

My take – You need to be a rockstar to coach potential rockstars. Great successes (and great failures) along with being super well networked are necessary ingredients for mentoring entrepreneurs.

2. Focus– Successful startup accelerators in the US are mostly focused on tech startups, and almost invariably on internet/mobile startups. The YC founders are hackers themselves and take great pride in it. Mentors at these programs have specific areas of expertise, be it marketing, product management, technology or finance.

My take – The mentoring program cannot be one size fits all. It needs to be focused on a specific domain and the mentors on the program need to have real skills. I attend startup events where a lot of general fluff is dispensed in the name of mentoring. The real value to a start up is when a mentor gives them concrete, actionable guidance to solve specific problems.

3. Peer mentoring – We share our office space with a startup. We’re constantly bouncing ideas off each other and sharing learning’s. The energy in the space is infectious. Commenting on my previous blog on mentoring (http://blogs.vccircle.com/500/mentoring-the-mentor/), GautamSinha, a good friend and founder of myfirstcheque.com, wrote about the importance of ‘peer’ mentors. I couldn’t agree more.

My take – A well run shared physical space for startup’s is a great idea. Entrepreneurs will learn more from their peers than through formal advice. I’d like to emphasize that this model requires a focused, highly networked and visible person or team running it for it to succeed. The Startup Center in Chennai is a great initiative and hopefully will validate the benefits of a well run shared space for startups.

4. Be rich before you mentor– This sounds a little frivolous, but let me explain why it’s important.  A lot of people seem to be getting into the mentoring business of late, which is great if they have the right experience, expertise, etc. However, this is a long haul business. You’ve got to invest all your time and energy for five years at the very least before returns (may) kick in. In the interim, there is very little income.  Unless you have other sources of income, this is going to be very frustrating.

My take – If you strip it down to basics, the entrepreneurship game is all about making truckloads of money (I’m already anticipating the ‘higher calling’ type of comments :)). Now why would an entrepreneur take advice on how to do this from somebody who’s not made sacksful of it? Ergo, be rich before you mentor!

What do you think?

Seed stage investing gets super bullish, but what about exits? By Deepak Srinath

Are early-stage investors, both in India and the USA, caught up in a bubble of their own creation?

Seed funds and early-stage investing in India seem to have come of age in a big way. Apart from the number of seed funds that are being raised or already raised, a number of Y-Combinator variants (incubator/mentorship models) are being set up across the country. Being in the middle of all these as an i-bank, it’s incredible to see angels competing fiercely for deals, unlike even a year ago when start-ups desperately chased a handful of angels or seed funds for money. This is indeed a very exciting time for entrepreneurship in India and I believe that the support system for starting up and raising capital is only going to get better over the coming years.

It is important to draw a parallel to the early-stage ecosystem in the USA, simply because there is a certain degree of overlap in participants and the Indian early-stage investor community tends to reflect Silicon Valley models and ‘market sentiment’. The USA is witnessing something equally fascinating in its early-stage funding scenario. The angel investor/incubator/mentorship model has been around for many years in many variants and forms the bedrock of the Silicon Valley start-up machine. What is different now is the ease with which a startup can raise angel money and the easy terms on which they are doing so.

The recent launch of a fund called the Start Fund is a great example of this. The Start Fund commits a blanket $150K of convertible debt to every start-up coming out of the Y-Combinator program, with valuation pegged to the next round of angel or seed funding. No diligence, no seed stage valuation expectations – just a simple, collateral-free loan that gets converted to equity whenever the start-up raises a follow on round! I don’t think it can get any better for start-up entrepreneurs, whether they are in India or the USA.

This obviously leads to the predictable question: Are early-stage investors, both in India and the USA, caught up in a bubble (or should I say ‘cloud’) of their own creation or is the optimism justified? In a recent April Fool spoof article on Techcrunch, Dan McLure, who is part of a Silicon Valley startup fund called 500 Startups is quoted as saying, “We are at a unique point in history, where any two people can create a new startup and have a nearly certain chance of at least modest success. Even if the product fails completely, Google and Facebook will compete to acquire the team and investors will at least get their money back.”

Facetious as it is, I actually think there may be an element of truth to this. I proceeded to dig out some numbers on the acquisitions made by Google and other tech/internet firms (Source: Wikipedia and company websites), and the numbers tell their own story:

Company Number of acquisitions
Facebook 10
Yahoo! 62
Microsoft 128
Cisco 185
Google 94

No matter how much of a bubble early-stage investing may be in the US, there are hundreds of tech companies that have a strong DNA of making acquisitions as part of their core growth strategy. This creates a safety net that buffers the hyper aggressive leaps of faith seed and early-stage investors are making in the US. In fact according to the 2010 Angel Market Analysis Report by the Center for Venture Research at the University of New Hampshire. 66% of angel exits happen through M&A .

While the euphoria around angel and early-stage investing in India is fantastic, I cannot think of a single tech, media or internet entity here that will make multiple acquisitions every year. IPO’s will only give exits to a handful of funded start-ups; a robust acquisitive universe is critical for the sustainability of early-stage investing in India. Along with developing the ecosystem to create and grow start-ups, investors and entrepreneurs have to focus on creating the exit ecosystem as well. Hopefully, this will emerge over the next 4 to 5 years, in time to provide exits for the current wave of early-stage investments.

The J Curve myth – By Aravind G.R

How long did it take the ‘Technology Empires’ to build their empires (from scratch)?

While the ‘J curve’ (or hockey stick in Indian parlance) is the norm in almost every business plan that an early/growth stage company makes (and we are often guilty of being perpetrators of the J Curve biz plan). It would be a revelation to see what the actual growth curves were for the tech empires (read: blockbusters of today, er, well, yesterday also).

The table in this blog splits the top 100 tech companies into Rocket Ships, Hot Companies and Slow burners based on their ‘rate of growth’. Interesting to see that the’ Rocket Ships’ took an average of 5.3 years to reach the magic mark of $50 million in revenue.

(Granted, this list doesn’t include the more recent ‘Lightspeeders’ (I couldn’t think of things faster than rocket ships) like Groupon, Facebook, Zynga et all who are claimed to have reached the magic marks in a matter of months if not years. These companies actually ‘J curved’ really fast! But, you can count these Lightspeeders with the fingers in just one hand.)

So with the exception of a tiny number of Lightspeeders, practically, the fastest companies take 5-6 years to reach a certain respectable revenue stage (note: this doesn’t mean an exit opportunity for VC’s). The duration is much more stretched in a country like India, where it takes longer than the US norm for start up’s to reach a certain scale. Investors need to factor that into their investment thesis for India.

 

Mentoring the Mentor – Deepak Srinath

A couple of years ago, when Viedea was a relatively new start up, I was approached by somebody who offered to become our mentor. I remember being surprised, because the person neither had experience of entrepreneurship nor of leadership in a corporate set up.  Needless to say, we politely declined the offer.

As the number of entrepreneurs and startup’s grow in India, it is but natural that various elements of the support ecosystem also develop.  Organizations like TiE and NEN, angel Networks like IAN and Mumbai angels are all doing a phenomenal job of supporting entrepreneurs. So too are numerous individuals and private organizations like Mentorsquare, Morpheus, etc. who have created innovative models which hopefully will create the sort of support ecosystem Indian entrepreneurs need.

However, the trend that has left me partly amused and partly concerned is the rapidly growing breed of entrepreneurs who are in the “business of mentoring and incubation”.  I have interacted with many such “mentors” over the last few months and barring a few exceptions most have left me with the feeling that they do not have adequate experience or skills to mentor a startup. Some of them are barely out of college themselves and many of them claim to be serial entrepreneur s (on closer inspection, it’s more like ‘serial company starters’, none of which have managed to last beyond a year).  It’s extremely worrisome that young entrepreneurs with smart ideas could be signing up such mentors, giving them equity and wasting a lot of time in the bargain.

A good mentor is a critical part of an entrepreneur’s journey. A few tips for entrepreneurs from my own experience –

  1. Choose your mentors wisely. Sometimes, finding and pitching to the right mentor is as difficult  and as important as finding the right investor,
  2. You may need multiple mentors on your entrepreneurial journey, for different stages of your venture or for different domain skills. It is likely that you will outgrow a mentor as your business evolves and takes different shapes. Make sure your relationship with the mentor is flexible and not joined at the hip.
  3. Decision making should never be delegated to the mentor. The mentor’s role should be to give you perspective and advice, not to make decisions on your behalf.

A few months ago I was approached by a leading incubator to empanel myself as a mentor. However, I did not feel I was qualified to be a mentor just yet.  As an entrepreneur I continue to learn immensely  from my mentors. Only when we have achieved the goals we have set out for Viedea will I believe that I have the right to mentor other entrepreneur’s and share my experiences.

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