The biggest problem for a modern day entreprenuer is that the business is monthly cash flow positive and you don't feel the need of raising external capital.
Not raising external capital at early stage will delay the potential of becoming investment ready.
1/n
Obviously there are exceptions who create money making machines and don't need external capital forever. But those are strictly exceptions.
I have learned this hard way in last 3 years. Spending too much time on product, revenue and profit can be counter productive.
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My humble submission to all buddying entreprenuers,don't consider fund raising as an incident need but as the part of the product lifecycle. Here is the flow
1. Deploy your very small capital and build product prototype 2. Raise seed capital immediately to gain traction
3/n
3. Get set go with your marketing plan and show agressive vision 4. Raising Pre-Series A within first 2 years of product lifecycle 5. Raise Series A within next 12 months 6. Keep raising money Series B,C,D etc and keep in bank for growth and competitive war chest.
4/n
In this process , do not worry about profits and just focus on top of the funnel matrices like Users, Retention, DAU, MAU etc and keep showing growth for better narrative.
Earlier you get into this zone, the better becomes your chances of survival. Else someone is doing it.
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In my 15 years plus career in markets, I have witnessed multiple regulatory changes. Some good, some bad. Stock market is one of the most regulated businesses. Reason ? It's about money, honey. If not done the right way, the entire structure could collapse as house of cards.
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Every 4 to 5 years we have seen some major changes in market microstructure in India. Be it STT then removal of income tax rebate on STT,then algo trading,then additional margins on stock futures, then CTT,then introduction of currency cost, then uniform stamp duty etc.
2/n
As markets evolve the regulatory changes becomes inevitable.Infact sometimes, these regulatory changes lead to change in market behavior. It's not about retail vs. institutions.Finally everyone looses if market looses genuine liquidity.I have always moved on at every stage.
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This circular from NSE has potential to massively reduce liquidity in market as market makers who are actively giving bid and ask may find it difficult to maintain the optimal order to trade ratio.
Thread on this.
Who are Market Makers ?
These are high frequency traders (algorithms now) which are always there in the market depth to provide entry and exit to various market participants.
They are typically providing bid and ask at every depth of the market. Hence lots of orders.
There is always high order to trade ratio for these market makers as number of trades executed out of these orders are not within their control. Market is very dynamic and one has to remain with their orders to capitalize on any execution on both side.
The most simplest way of identifying stocks for your momentum swing trading. Something which has worked for me for years now and hence we have added the model in @mystockedge for individual investors.
After analyzing the financial statement (FY20) of 10 fintech companies, including mine I have come to the following conclusion about Indian fintech customers in this thread:
1. Retail Subscriptions based services has not picked up in India for serious domains like financials
2. Indian consumers love free service and won't mind if you make indirect earnings from them by pushing advertisements and third party products. 3. Difficult to charge customer for advisory as very few people would value the same, especially online
4. Cross selling is the final game, so mutual fund distributors and/or nextgen stock brokers will eventually sell high yield services like loan/global markets etc to their existing customer base.
But question remains will that truly lead to conversions ?
Entrepreneurship is the toughest battle one can fight, especially in India. Major challenges here :
1. The mindset of the majority who want everything free without realising that one who is giving free will eventually take money from them through indirect sources.
Cont....
2. Dynamic regulatory environment leading to volatility in the business model. Most of the time you don't want to take license yet you land up taking irrelevant license.
Cont...
3. Fight against unreasonably hyper funded startups who are more tech-enabled and have little understanding of the subject, yet they are able to sell stories to softbanks of the world. Tech enbalement is good but not the only thing in the stock market.