Comments on: 5 personal finance mistakes that first time entrepreneurs must avoid

By: Harsha M V

Harsha M V — Fri, 04 Mar 2011 11:30:06 +0000

If its Blocked by the DoT it should be blocked by everyone why only Airtel DSL users ?

By: Dinesh Jain

Dinesh Jain — Fri, 19 Feb 2010 09:05:59 +0000

I liked your list, but the problem is point no.1. Now, if I dont borrow from friends and families, to fund a venture which I think is brilliant, how will I start? I beleive the VC`s and AV`s will come in only after you have a working model and some past results to show. Suppose I need 25 lakh for a start-up, whom should I approach if not family and friends?

By: Famous entrepreneurs

Famous entrepreneurs — Wed, 03 Feb 2010 05:46:19 +0000

I love your list! Especially the bit about cars. I have a co-worker who is living rent free with her sister but is living paycheck to paycheck because of a $430 monthly car payment! That is almost the price of our monthly rent (of course, split in half, I only pay $230 on rent!). I just cannot imagine financing a car. They lose so much value in the first couple of years… Just no. I drove the car I was given when I was 16 (a car that was only a year younger than I am) until my parents literally made me give it up. (It leaked oil and had no airbag. The parents got paranoid.) My dad bought a car for $900 wrecked, fixed it up – total put in about $1,800 – and I’ve been driving that car ever since. I will drive it until it dies for good. And you know what? When I do need another car, I will shop around and buy used. And I will pay in cash or I’ll take the bus until I can afford to do so.

By: Famous entrepreneurs

Famous entrepreneurs — Wed, 03 Feb 2010 05:42:13 +0000

Not taking enough risk. If the thought of taking risks keeps you awake at night, you’ll need to temper those feelings. When it comes to investing, you’ll need to take some risks or you’ll never be able to grow your money. At best, you’ll be able to keep it in a bank account that’s FDIC-insured. Or, perhaps you’ll invest in tax-free municipal bonds. But with risk comes reward in the stock market, the kind of gains that will keep you in cups of gourmet coffee throughout your retirement. The best time to take a risk is when you have twenty or thirty years until you retire, and a retirement account you can’t touch.

By: Aloke

Aloke — Tue, 08 Dec 2009 11:15:42 +0000

I feel the advice in point 2 is practical and something that any entrepreneur should detail out well before taking the plunge.

By: Islamic Finance Blog

Islamic Finance Blog — Wed, 02 Dec 2009 14:41:51 +0000

I made that mistake once and i clearly realize what this article is all about.

By: Umesh K

Umesh K — Wed, 02 Dec 2009 13:10:54 +0000

Thanks for the Examples Abhishek. iHave gone through their bussiness. Yes in such bussiness definetly investment is required to be scalable. can you give any examples related to a paid web product / service that required to be venture funded?

By: Abhishek Goyal

Abhishek Goyal — Wed, 02 Dec 2009 09:12:52 +0000

It kills me to see people who dig themselves very deep on point 1.

By: Abhishek Goyal

Abhishek Goyal — Wed, 02 Dec 2009 09:11:38 +0000

Umesh, You want raise money even when you are profitable, because you want to accelerate the growth. e.g. If you are running a service apartment company, it will be a profitable business, but will take sometime to scale. In case you raise money, you can grow it very quickly. example is Siesta Hospitality or mera cabs.

By: umesh

umesh — Wed, 02 Dec 2009 06:07:18 +0000

Sorry for being naive, but why go to investors if there is revenue coming in from the start up? one can be a bit more patient and reinvest all the profits for start ups’ further development to see more profits….can somebody explain with relevant examples.

I think one should go to investors when there is a potential for earning in future but that future is too far or risky.

By: FinanciallySmart

FinanciallySmart — Tue, 01 Dec 2009 17:21:02 +0000

The article is such a wonderful and informative one but the problem with some persons who are first time Entrepreneurs is that they don’t seek advice from others who as been there and overcome the obstacles. Information is power and we should always seek this.

By: Harun

Harun — Tue, 01 Dec 2009 14:38:20 +0000

Posts on your blog are very informative and engaging,

During initial phase Cash is very important availability of it can make or break your business. Therefore while considering any business purchase we should spend very frugally and entrepreneurs should ask themselves that if this expenditure is really necessary.

Thanks

By: capital loans

capital loans — Tue, 01 Dec 2009 10:38:49 +0000

Thanks for sharing with us.Your blog is very informative.keep posting.. capital loans

By: Kasi

Kasi — Tue, 01 Dec 2009 05:26:22 +0000

WOW!! that is one hell of a comment.

By: Curious Mind

Curious Mind — Tue, 01 Dec 2009 04:28:44 +0000

Dear Karthik,

Is this one from the heart or from the head ?

Really liked it.. though its bulleted and in a presentation format.. sounds like an experienced person passing on words of wisdom.. and for once not trying to be a so called “thought leader”..

Appreciated..

By: rakshit

rakshit — Tue, 01 Dec 2009 04:15:29 +0000

I second your thoughts. VC’s, Industry, Government and even bigshots like Azim Premji, Narayan Murthy do nothing but prove their dumbed version of life. They call it vision…:-)

By: jayant

jayant — Mon, 30 Nov 2009 18:28:14 +0000

Whoever says raise money from FFF, is the biggest fool.

First of all, a person (who is not your friend and family), and invests in your venture can’t be described as fool,if so, then the entrepreneur is the biggest fool, since he has put his money and time also.

In India, VCs have to be more innovative and apply their sense.They will invest in 11th me-too company, but they won’t invest in first company.

Remember VCs invested a lot in Indian version of youtube like apnatube, meratube,teratube,,,tubehitube:),,all of them flopped,,none of them is successful.

So go to VC/angels only when you have started getting revenue.

By: Rivers Corbett

Rivers Corbett — Mon, 30 Nov 2009 18:26:36 +0000

I think the real lesson here is “cash is king” and without it you have no chance of survival. I agree with many of the ideas but not the one of getting a personal loan. If you really want something BAD enough…then the risk is worth it so that you don;t look back and say I wish I had of…

Failure is not fatal…

By: Kartik

Kartik — Mon, 30 Nov 2009 12:00:08 +0000

Hi Shashi,

Thanks for the comment.

For milestones that might be relevant to the angel or VC, you need to exercise some business sense. What milestone will give a potential investor the conviction that you are on to something? Often the user base that you have, or paying customers that you get, can be a good milestone, but it can vary by business. Best if you get some feedback from people around you who are commercially savvy, or perhaps even informal feedback from potential investors.

Often, different investors will attach a different premium to milestones. Ultimately, you need to achieve what you think makes long-term sense from a business perspective, rather than do something just to please a potential investor.

Different industries will also have different sets of relevant milestones. If you are starting a web service, your traffic and registered user base is probably a good starting milestone. However, if you are building a power plant that might take 3 years to build, it will be a while before you can show any users, even if its obvious the demand for power is there. Your milestone might be more around all the licenses you have got and the percentage of completion of your construction.

Hope this helps.

Kartik

By: Kasi

Kasi — Mon, 30 Nov 2009 08:42:53 +0000

Shashi normally, generally and logically …

Angel funding should start at the planning phase itself.
VC funding should start at foreseeing revenue.

But, Currently, presently and illogically …

Angel fund starts at foreseeing revenue.
VC funding starts at after foreseeing break-even.

Kasi

By: Kasi

Kasi — Mon, 30 Nov 2009 08:39:12 +0000

Nice article.

But there is a famous quote among VC circle about raising money from FFF’s ( Friends, Family and Fools )… until you reach raising money from VC’s.

By: Shashi

Shashi — Mon, 30 Nov 2009 07:48:12 +0000

Excellent post Kartik. If I am not wrong, you had written a series of posts for pluggd.in earlier, where you had shared your experiences of starting iTrust. Those were some of the best posts I have read here and were really helpful.

I am glad I am following most of the points you mentioned. I had a question though.

“..if you can achieve milestones relevant to the angel or VC.”

If you are a first timer, how do you decide what is a milestone relevant to the angel or VC? Is it the number of users/customers you have, the number of users/customers who gave positive feedback, the rate at which the number of users/customers are growing…??