Building an Ecosystem for Startups in India

FundTonic is a venture that aims to create an ecosystem to enable funding in ventures, to maximise returns for Investors. (www.fundtonic.com)

Founded by the trio – Akshit Gupta, Nainesh Kapadia and Bhavin Parikh, the team decided to change the way angel investing happens in India. FundTonic realized that funding was happening without really addressing the pain point and gaps of startups before they venture out for fund raising. One of the biggest challenge according to the team was that while dealing with investors everyone talks about deal closure and investing. There is usually very limited focus on exits and no one is takes that responsibility. Hence the team structured their business model in a manner wherein they not only get highly curated startups to raise fund but also take responsibility of Post Investment actions.

Tell us more about the Co-Founders of FundTonic
Akshit Gupta, the Co Founder & Director at FundTonic was heading Deal Execution at Intellecap Impact Investment Network, wherein, he enabled investments in promising ventures, prior to setting up FundTonic. Akshit is a co-founding member of IntelleGrow, India’s first venture debt fund, where he built and management one of largest portfolio in addition to building the organising. Prior to IntelleGrow, Akshit has also worked with HDFC Bank for the Emerging Corporates Group, wherein he was responsible for asset portfolio of the Bank and built a quality portfolio. He has been a Mentor to IIM Ahmedabad Power of Ideas Program and is an Advisor to various incubators

Nainesh Kapadia, an entrepreneur, investor and deal maker and has expertise in working, leading and managing industries across packaging, banking, dairy, automation, e-com and technology. He is a co founder at FundTonic, an advisory and fund Management Company that aims to make startup funding really easy for innovative startups and smart investors. He is the CEO of Shree Sundaram Overseas, a leading Trade Finance and financial consultancy firm. Nainesh has a deep focus on rural and economic development. He is an active participant in various initiatives for an NGO. Nainesh also holds an MBA in Trade Finance.

Bhavin Parikh comes with a wealth of experience across various sectors, an industrialist by professions currently employs more than 1100 people across different businesses. Also Owner to companies in various sectors including Textiles, Constructions, and commodities also has invested in various early stage growth companies. Bhavin holds a degree in Business Administration from Swinburne University, Australia. He is a Trustee at Gujarat Innovation Society and helps innovation & supports various upcoming ideas to florish out of Gujarat. He has an established track record of creating and managing high profit margin businesses by strategizing, operationalizing and executing plans. Bhavin is also a volunteer with various NGOs and helps causes related to animal care. Bhavin’s family also houses animal shelters and supports girl child education, runs old age homes across Gujarat

How did you manage the initial capital?
Bhavin Parik, who is the co-Founder at FundTonic is the seed Investor. With him, the team did not only get the seed capital, but also the advantage of his experience of building large organizations, ability to encourage true innovation and team management.

What were the initial days like?
Our first few months were highly execution intensive. What we wanted to be sure about is while we executed the most critical pieces of business, we also wanted to be on top with accounting and governance — which is most of the times ignored by many new ventures.

Further, we were very clear from Day 1 that we will focus on generating revenue from beginning even as we burn cash in first few months. We do not have a single month since our lunch date that we have not generated revenue.

We also observed during the initial months, that the senior management was getting involved in overlapping responsibility which was sometimes delaying decision making. We immediately sat down together and assigned specific roles and responsibilities that would ensure smoother functioning of the organization.

First few months are also very important for work culture setting. We were sure we don’t need a team of complacent people and even within the leadership team we continue to put pressure situations, which has resulted in some out of the box solutions for us.

Have you managed to help raise funds for any of your associate startups?
Yes, we have 3 term sheets already within a short span of time with fund raising ranging from USD 150k to USD 500k. Since the deals are yet to be public, we won’t be able to share more information here

Explain your revenue stream & profitability.
Our revenue model is based on commission on fund raised for startup and equity stake in our portfolio of funded companies. This gives our Investors a lot of comfort as there is a credible institution like FundTonic which is also taking care of post investment portfolio monitoring and future rounds of fund raising. We generally work with only those start ups where we can also accelerate the company for their business development.

What is your guiding philosophy when it comes to doing business?
Focus on execution and business development. We should not get obsesses by idea or concepts when we are not sure it will sell. We repeat ‘Execution is the key’

Also start building processes early in your organization and capabilities to monitor it. It is very simple to do and the discipline goes a long way as you scale up and have a bigger team. This becomes another important aspect of work culture setting. Respect your co-founders and employees and make sure every day is fully of challenges that your people are looking forward to take it up.

Where do you see yourself 3 years from now?
There is lot of innovation happening at FundTonic. In the next 3 years, we aim to be “THE Institution” that ensures responsible angel investing. Investors should understand the risks involved and appropriate return expectations. We are working on structures that will ensure transparency of information before and after investing. We have 2 unique business lines being developed internally, which will completely change the way angel investing happens today and encourage more investors to support startups.