Idea To Funding & The Valuation Game--Journey of Sparsha Learning Technologies

1. The Valuation Game -‐-‐Journey of Sparsha Learning Technologies Prof Shivananda R Koteshwar Director, The Amaatra Academy Mobile: 98457 22117 / Facebook: shivoo.koteshwar www.docircuits.com Lounge 47 (www.lounge47.in) Feb 2014

2.   Sparsha valuation with time and “Fair” use of money   Pricing Challenges   Business Model

3. Kumar Rangarajan Satyam Kandula $10m-$15m Sachin Bansal & Binny Bansal $521m, $1.6B Phanindra Sama $135m Naveen Tiwari $215m, $1B

4. Incuba'on Research Center at CORI

5. ACTIVITY BASED TEACHING, ACTIVITY BASED LEARNING AND VIRTUAL LAB SOLUTIONS ECE • I YR : Basic Electronics • II YR: Analog Circuits, Digital EE • I YR: Basic Electrical • II YR: Signals and Systems, Power Electronics CS • I YR: Data Structures, Programmi ng • II YR: Algorithms, Networks

6.                 You achieve something significant when you do something insignificant (as seen by others) Its not just about taking risks. Its about managing risks. Its about minimizing lot of smaller risks within that bigger risk Data shows it takes 5-‐7years for an entrepreneur to make a mark Breaking Inertia – Comfortable job to entrepreneur vs. Comfortable job to student to entrepreneur Luck plays a significant role in success. With right attitude, you can learn to be lucky! Market is not just when you have a willing buyer but also an able buyer is required First make it work , then make it better Costs are like fingernails ..cut them constantly

7. Don’t Give up

8. Challenges in each step of Entrepreneurship.. ①  Identifying and using the opportunities that exist in the market   Market Research, Interviews, Test Bed ②  Converting the ideas into action   Team formation, Money, Full Time vs. Part Time ③  Undertaking promotional activities to launch an enterprise   Logo, Registration, Location, Structure, Protocol, Advisory Members, Share Holding ④  Striving for excellence in his/her ﬁeld of work   Quality, Product Completeness, Documentation, Packaging, Pricing, Selling ⑤  Bearing the risk and uncertainties involved   Money, Team, Partners, Distributors, Multiple pull from diﬀerent directions ⑥  Harmonizing   How, When , Who ?

9. NOVEL CUSTOMER CENTRICITY INNOVATE PURPOSE

10. MESSAGING PACKAGING SIEZING THE OPPORTUNITY

11.   Slide1               Define the market size both in units and value terms where ever applicable If it is new concept then work out the estimated market       Define the current Customer pain areas and how your business proposition will help them       Names of the members of the core team Name the brain child Name the support members of the Core Team with their functionality     Company Name In one sentence tell how your business proposition is useful to mankind Define the company Value proposition If you have some customer case studies you can exhibit here     Describe the Product (Functionality, features, architecture, what core IP do you have) Show your Product Development Roadmap Slide2 -‐ The Core Team Slide3 – Customer Perspectives Slide 4 – Market Size Slide 5 – Company’s Value Proposition Slide 6 – All about the product

12.   Slide7 – Business Model             Detail in brief on the completion with the names of the key players and their brands                 Sales and Distribution model Customer/Pipeline list     Revenue Model Pricing Financials during the Incubation Period Period of incubation = ? Months Revenues during incubation Costs during incubation Net Burn Sources of Funds-‐ own=? And Borrowed =? (Give Details) If it is new concept then work out the estimated market   Give your reasons for choosing the XXX for incubating your business Slide8 -‐ Business Model Slide9 -‐ Competition Slide10 -‐Financials Slide 11 – Why incubate @ XXX

13.   MOTEPPCABE   MO: Market Opportunity   TE: Team   PP: Proﬁt Potential   CA: Comparative Advantage   BE: Barriers to Entry

14. LIMITED DICTION             Investment Revenue Expense Proﬁt Loss Business Plan UPGRADE REQUIRED                     Preference Shares and Equity Shares Convertible Shares Performance Milestone Tranche Cumulative compulsory convertible Preferential share Preferential Dividend Cumulative coupon rate Pre Money Valuation Post Money Valuation Voting Power                   IPO Observer, Promoter’s Director, Investor’s Director Termsheet Due Diligence Liquidation, Dissolution and winding up Deemed Liquidation (Merger) Conversion Form Tag Along Rights Drag Along Rights

15.   Goal: To determine whether the business case is ‘investment grade’                 Gathering and detailed analysis of documentation Business plan and related documentation Additional requests for information from management Market analysis (top down and bottom up) Search for comparable businesses and business plans All market and industry information readily available on internet Consultations with industry contacts/technical experts In person visits to conﬁrm business case with   Actual or potential customers   Actual or potential suppliers or other ﬁnancing sources   Decision about next steps   Allocation of tasks, establish project team structure   Fix due diligence/investment timeline   Basic term sheet outline Basic investment decision is made at this level.

16.   Current Business   To conﬁrm the current state of the company   To determine and manage risks to the current value of the Company ▪  Existing ▪  Contingent   Future Business:   To conﬁrm the business plan in detail   To determine and manage risks to the business plan in detail ▪  Market (External) ▪  Organizational (Internal)   Questions to Answer:   Am I buying what I think I am buying?   Is it worth as much as I believe?   What risks exist to the my acquisition and its value, and can these be managed?   Is there any reason not to do this deal?

17.   If the chemistry is not right, arithmetic will never work   TEAM   Are you producing a vitamin or a headache tablet   PROBLEM you are solving (Nature, big/small, Market size)   Competition – Who else is doing? How are you better?   Entry Barrier   Value is created in market and not in xls sheet   Financing Risk : Capital Intensity -‐Capital required for company to reach inﬂiction point (Breakeven or sustainable growth or non linear growth)   Regulation

18.             Stable and a Proud Team Amazing Product Great Board of Advisors Closed the ﬁrst round of seed funding with Blume and Tempus Investment fund Shortlisted as the Top20 upcoming startups in India by CNBC-‐TechSparks. Came 6th  On facebook-‐ https://www.facebook.com/iLearnMore and On Twitter -‐ @idoilearn

19.   Marketing   Product Development   Team expansion   Application Engineering Founder director’s were still working without salary!

20. Hygiene Factor: Ease of Use

21. http:/techtroniks.docircuits.com

22.     Developed and launched HTML5 version app of DoCircuits for Windows 8.1 for Mobile devices VSKILLS : Certified Electronics Design Associate launched ( http://www.vskills.in/certification/Certified-‐Electronics-‐Design-‐ Associate )             2X growth in online sales outside India Very limited B2B engagement and conversion. -‐ All B2B engagements now done by distributors More engagement over Facebook ( 3X+ growth since last quarter ) Crowdfuding on Indiegogo not successful, cannot go ahead with course design as funding goals have not met. Will be returning the money to individual contributors Major Japanese distributor about to be signed, agreement in review Companies looking at acquiring us

23.   A Nasscom study noticed that since 1990, India has seen the emergence of 3,402 product companies   Of the total 3,402 product companies, approximately 51 percent are based in Bangalore and NCR region.   More than 55 per cent of the startup founders have less than 10 years of experience from 2009 to 2012.   The Indian Angel Network, for instance, evaluated 3,400 pitches in 2012, shortlisted 82, and ended up funding 13.   The year before, it had received just 2,000 pitches   In 2013, there were 100 merger and acquisition deals across the India's information technology industry   Of this, 31 whose value was announced were worth $1,906 million (Rs 11,807 crore), according to research ﬁrm Venture Intelligence

24. You don’t sell through price. You sell the price

25.                 Consider the psychology of prices and not simply the economics Consumer perception of value is important Customers use price less when they can judge quality of a product. Price becomes an important quality signal when customers can’t judge quality; price is used to say something about a product. Price often depends on circumstances – You always pay more to fly when you want to fly Consumers are often prepared to pay more if they expect to get excellent service Adding value doesn’t mean dropping price Price will be compared -‐ Other price offers, Prices previously paid, Going rate, Alternative product price, Alternative substitute price

26. SELECT PRICING OBJECTIVE Profit Oriented Sales Oriented Status Quo Target return / Maximize Profit Sales Volume / Market Share Stabilize Price / Competition SELECT BASE PRICE DETECTION METHOD Price based on both demand and costs Cost-plus pricing Price set in relation to market alone DESIGN APPROPRIATE STRATEGIES •  Price vs. nonprice competition •  Skimming vs. penetration •  Discounts and allowances •  Freight payments •  One price vs. flexible price •  Psychological pricing •  Leader pricing •  Everyday low vs. high-low pricing •  Resale price maintenance

27. Internal reasons – Marketing objective (survival, market share, profit maximization, quality leadership), cost, etc External reasons - Nature of the market, demand, Competition, Environmental factors (economy, resellers, government)

28. Loss leader

29. Amazon Google Apple UPS Sony Location Packaging Advertising Branding Service Tata, reliance, airtel, SBI, Infosys 5c 5s Vertical product variation Sponsorship - £25m-a-year Product Modifications Product mix

30. Optional (Accessories) Bundling Captive By Product

31. Penetration Skimming SkimmingPenetration recover high R&D costs Price Lining Move inventory, stimulate D, extend product life Psychological Promotional

32. Prof Shivananda R Koteshwar Director, The Amaatra Academy shivoo@pes.edu / Facebook: shivoo.koteshwar BLOG: http://shivookoteshwar.wordpress.com SLIDESHARE: www.slideshare.net/shivoo.koteshwar

33. A business model describes the rationale of how an organization creates, delivers, and captures value. It’s the story that explains how an enterprise works Canvas is a shared language for describing, visualizing, assessing, and changing business models References from the book: Business Model Generation ISBN: 978-0470-87641-1

34.   FROM Product/Market Segment Oriented Approach ▪  Product and/or service at its center that focuses on a customer’s job-‐to-‐be-‐done – Value Proposition   TO a Holistic Business Model Approach to achieve long term competitive advantage

35. Customer Relationship Customer Segmentation Value Proposition Channels

36. Key Activities Key Partners Key Resources Cost Structure Revenue

37. Key Activities Customer Relationship Key Partners Channels Value Proposition Key Resources Cost Structure Customer Segmentation Revenue

38. Prof Shivananda R Koteshwar Director, The Amaatra Academy shivoo.koteshwar@gmail.com/ Facebook: shivoo.koteshwar BLOG: http://shivookoteshwar.wordpress.com SLIDESHARE: www.slideshare.net/shivoo.koteshwar

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