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Start-up funding: Throw these terms at investors and get your funding pitch rejected

Krishnanand Tripathi
Start ups, funding, venture capital, angel investment

Start-up India: Indian start-ups have truly penetrated every state in the country within three years of the launch of Prime Minister Narendra Modi’s flagship scheme in 2016. According to a report by software industry body NASSCOM, the country has become the third biggest start-up hub in the world after the USA and China. However, raising capital is still not easy for them as a large number of applications are rejected by investors. Most of the Indian start-ups have come up in the field of cutting edge technologies like machine learning, artificial intelligence, big data, and analytics or they promise potential investors to use these technologies to scale up their operations while making a pitch for funds. However, unwise use of these terms could be one of the biggest reason for rejection for their applications.

Given India’s prowess in the field of information technology and availability of a large pool of qualified engineers, IT industry body NASSCOM started a programme called 10,000 Start-ups to jump-start a large number of start-ups in the IT sector.

However, given the popularity of these technologies among the potential investors, some founders started to use these terms just for the sake of making an impression on investors.

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"It has become a fad for start-up applicants to throw away the terms such as Big Data, Machine Learning, Artificial Intelligence (AI) and Blockchain in their power-point presentations and pitch," said Sushanto Mitra, CEO of Lead Angels Network.

However, very few realise that unwise use of these terms may actually become the main reason behind the rejection of their applications.

"While screening the applications, if we find that these things have been included in their presentations just to impress us then it becomes one of the reasons for rejection of their applications," Sushanto Mitra told Financial Express Online.

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"We thoroughly assess how many of them are actually going to use these cutting edge technologies or capable of developing them. Our network of investors was initially started by IITians so it is easier for us to catch them if they try to mislead us," he said.