This is an interesting 5-M Model to evaluate whether a new business idea hold the potential to become a sustainable business. It also shows the process and stages of angel investments.

1. Journey from an Idea
to a
Sustainable Business
The Steps, Challenges and some
Quick Tips

2. The Steps
Early Stage Funds /
Crowd - Funding
Idea Idea Initial Scaling up
Evaluation Incubation/ Market
Prototyping Feedback
5 M test Incubators PE/VC
Funds

3. WHAT MAKES BUSINESS IN
BUSINESS PLAN

4. Mmmmm…

5. Mmmmm…
• Movement
• Marketability
• Management
• Monetisation
• Mitigation

6. Mmmmm…
Movement
Ability of the idea/business to attract consumers and scale up reach
• Does the service/concept holds ‘real value’ for its targeted consumers
• Will it ‘Lead’ the markets for tomorrow and holds the potential for
creating disruption
• Will it attract even the competition to look up at it
• Will it attract other vendors to create an ecosystem around it
We don’t want USD 0 Million ideas…
…we want USD 0 Billion ideas

7. Mmmmm…
Movement
• Versatility and ease of usage
• Innovative form factor
• Moving the ecosystem
• ‘Viral’ potential
• Enabling other value-adds

8. Mmmmm…
Movement
• Emerging middle class with no time to shop for kids
• Brands willing to offer support
• Travel industry growing by huge leaps
• Convenience of use

9. Mmmmm…
Marketability
An idea may move people…but will people really give their money to take it
• Is the timing right?
• Can existing distribution networks support the product/idea
• Is the product a ‘Me-Too’ or just small incremental difference from existing
options
• Product demand estimates / benchmarks
• Who are your consumers – and do they have wherewithal to buy the
service?
• Has the idea being sample marketed?

10. Mmmmm…
Management
We invest in people…and its people who make or break a business
• Domain specific experience
• Complementary team skills
• Experience of mentors, if any
• Other associations – such as working partners
• Right resource planning

11. Mmmmm…
Monetisation
It’s all about the money, honey!
• Initial projections – careful analysis of expenses and revenues – for one
year
• What are your revenue streams
• Value – Cost analysis
• Usage of Funds

12. Mmmmm…
Monetisation Myths
Some ‘Danger Signs’ you should look at
• We will get Million eyeballs – and hence Million dollars in advertising
revenue
• The Founders will take salaries home
• We will grow 200% by year 2
• Our break even will be achieved in less than a year
• We will exit in year 4

13. Mmmmm…
Mitigation
Plan without risk-analysis is the biggest Risk!
• What risks do you foresee – and how do you foresee mitigating them
• How well-equipped are you…or will need to be…when risks arise
• Pessimistic market projections – worst case scenario

14. THE STATE OF START-UP FUNDING

15. Stages of Investment
Where does one invests
• Have an idea
• Investigate the market
• Creating a prototype
• Demo of product &
services
• Solid business plan
• Interested clients
• Some initial sales
• Key Management in
place

16. Stages of Investment…
Where does one invests
• Success in market
place
• Hiring sales,
marketing &
operations team
• Office &
manufacturing space
• Purchase of further
equipments
• Growing quickly
• New production
facilities
• Invest in marketing
• Product development
• Fire fighting, keeping
the wheels on

17. Evaluation Process
Start FUNDING
Opportunity Negotiation
Due Diligence
Introduction Initial Screen • Valuation
• Management
• Presentation • Management • Ownership
• Marketing
• Executive Team • Control
• Production
summary • Business Plan • Management
• Financials
• Forecasts • Legal Contract

18. Thank you !
Satish Kataria
Consultant - DARE
Cybermedia India Limited
Mumbai
satishk@cybermedia.co.in