5 Steps to Pitch to a VC

Like every great marketing and sales, the startup pitch ballgame starts before you dance– it’s inception is research.  

But make it one memorable pitch, they said.

Well, memorable doesn’t always translate to profitable. Because, in reality, Venture Capitalists often hear plenty of pitches every week. 

And, if you want to be on the front-page of their list, it is essential to learn a step-by-step strategy for pitching to VCs. 

Let’s get started. 

Go on a fishing expedition

Before you present, it is always essential to do some groundwork on the person that you are going to meet. Here are some tips: 

  • Decode their interests
  • Enquire if the VC has any expertise in your area. And, improvise your pitch based on their background knowledge
  • Find out their priorities–objectives, goals and roadmap 
  • Make sure that you are talking to the right people who’d invest in you. Understand the logistics and their fund size because if the firm is towards the end of their fund, they will be selective in handing out cheques

Don’t play by the rules

In the year 1976, Lynyrd Skynyrd was about to open for The Rolling Stones. Now the popularity of the Stones was way too much to handle for the lesser-known southern rock band.

As popularly said: “Opening for the Stones was like standing in front of a firing squad.”  

Lynyrd Skynyrd was asked to complete their set within 45 minutes. Yeah, 15 songs altogether.

So they shortened their setlist and interacted with the audience–maddening guitar solos, callbacks, sing-alongs, crowd jumping and the infamous tongue walk. 

This incident is a Rock n Roll Memorabilia. So before you walk into the room, improvise. 

Or ask them: What’s that one important thing you want me to cover? 

Depending on their answer, you gain an extra set of eyes on their interest. This is where you set the timbre of the conversation, and the chance to give them the best, most authentic impression of yourself. 

You got that, right?

Don’t forget the numbers

Now that you have bought them their favourite seats, it’s time to sell your company’s philosophy with metrics. Most important, focus on traction metrics. Depending on the specifics of your business prioritise them. 

Once you have figured out what to show the VCs ask yourself–do the numbers support each other? Because if a VC meddles around your stats, it muddles up things. 

In case your numbers are weak, focus on the massive problem that you are trying to solve. 

For example, I founded this company after realising that millions of people in the country do not have access to clean water.

If there’s no way out in the rumble then always use market metrics to show how high the ceiling is!

Draw the investor’s attention by showing the market share, convince them why your product is best suited for the specific scenario and why customers will vouch for you.

You might also like: Bootstrap Your Business the Right Way

Sell by not selling

Investors are people too. As human beings, we are all biased to favourable impressions.  

To engage on a personal level, tell a story that everyone can relate to, without sacrificing the real pain-point that your product is trying to solve. 

Pitch how your product will change lives, tell them how you crossed hurdles to be where you are, your ups and downs and everything that is directly related to your solution because the investors will evaluate the torchbearer of their expectations. That’s you!

Know when to stop

What makes a great movie? The music. At large, yes. 

The protagonist? Very true. 

But what makes it memorable? It is the ending. 

This is where your organisation’s motto should reflect, a tag line that’d define your purpose. 

Expect questions after you end, be confident, and talk to VCs as if you are talking to another founder.

And, always bring back the question to your company’s bottom line. Because in the end, what investors care about is the value. 

Finally, practice, practice and practice because that’s all you need.

Good luck!  

Also read: A Beginner’s Guide to Venture Capitalists 

Business Terminology – A Beginner’s Guide

Welcome to Business Terminology!

Have you ever stumbled upon some business jargon and clicked on 20-odd articles to clearly understand what it means? We feel you!

And hence, we have created this repository of terms with deep research and fine detailing. 

Find everything from bootstrapping to funding, from NDA to balance sheets, explained through in-depth articles written by industry experts!

If you can’t find a topic you are looking for, kindly allow us some time! We are constantly understanding and learning your needs. You can also fill this form to let us know your suggestions or queries.

Let’s get started.

Balance Sheets

A balance sheet is a financial statement of a company. It includes assets, liabilities, equity capital, total debt etc. at a particular point in time. It includes assets on one side and liabilities on the other.

Simply put, it is a snapshot of the financial status of a company at any given time. It is usually calculated every quarter, six months or a year. 

Read More

Bootstrapping

Bootstrapping means starting and growing a startup from scratch without anyone’s financial help. It is a process wherein a new business gets started with its operation without any external funding. 

Read More

Inventory Management

Inventory management includes aspects such as controlling and overseeing purchases, both from the suppliers and from the customers. This includes maintaining stock, controlling the amount of product for sale and order fulfilment.

Read More

Minimum Viable Product

A minimum viable product means a product which usually has one basic set of features. It is released to a handful of people to test a new business idea and gauge people’s or your potential customers’ reaction to it.

Read More 

NDA

A non-disclosure agreement or NDA is a written contract between two parties (people or organisations) that prohibits the sharing of confidential information shared between both the ends.

Read More

PAN Card

A Permanent Account Number is a 10-character alphanumeric identifier. It is issued by the Income Tax Department to all judicial entities identified under the Indian Income Tax Act, 1961. The primary purpose of PAN is to identify all financial transactions of an individual or company and prevent the evasion of taxes. PAN also acts as an important proof of identification. 

Read More

Payment Gateway

An online payment gateway (PG) is a tunnel that connects your bank account to the platform where you need to transfer your money. A PG is a software that authorises you to conduct an online transaction through different payment modes like net banking, credit card, debit card, UPI or the many online wallets that are available these days.

A PG plays the role of a third party that securely transfers your money from the bank account to the merchant’s payment portal.

Read More

Pre-money & Post-money Valuation

Pre-money valuation refers to the value of a company excluding the latest round of funding. Simply put, pre-money valuation evaluates the worth of the startup before it steps out to receive the next round of investment. Post-money valuation, on the other hand, refers to the value of a company after it raises money and investment for itself. This includes outside financing or the latest rounds of funding.

Read More

Startup Funding

Funding is the money raised by a startup or provided by an individual, organisation or government bodies to a startup for a particular purpose.

Read More 

Venture Capitalist

Venture capitalists are well-heeled investors that often invest their capital in businesses with indelible growth opportunities. The infused capital is called venture capital. 

Read More

We are constantly adding more terms on this page to simplify your queries. Keep visiting this page to stay updated!

Have suggestions or queries? Fill this form to help us serve you better!

Bootstrap Your Business the Right Way

Bootstrapping means starting and growing a startup from scratch without anyone’s financial help. It is a process wherein a new business gets started with its operation without any external funding. 

Entrepreneurs all around the globe are shooting for the stars in an attempt to raise funds to fuel their ventures. And then, there are some who wish to do the business all by themselves. ‘Bootstrapped’ is the term for the latter.

If you are the one who in search of questions like:

  • What is bootstrapping? 
  • How business owners manage to succeed without getting funded?
  • What are the pros and cons of bootstrapping?

…and so on, then this article is for you. 

What is bootstrapping or what is a bootstrapped startup?

Bootstrapping means starting and growing a startup from scratch without anyone’s financial help. It is a process wherein a new business gets started with its operation without any external funding. 

This means a bootstrapped startup is responsible for its own survival. The growth and scaling up of these startups is purely based on the revenue obtained.

How to bootstrap your startup?

No matter how beneficial bootstrapping seems, it isn’t easy to roll all the money back into the business and not in your pocket. Here are a few tips that might help you while you plan to bootstrap your startup: 

Limit expenses by using homes or co-working spaces

Make a note here: ‘land’ is expensive. While a fancy working space with ping-pong tables is cool, they just add to unnecessary expenses in the early stages (especially if you are going to be bootstrapped). The money you spend there can be used for customer acquisition and marketing, for example. 

Consider working out of your home or look for a coworking space to cut down on costs significantly. These places will allow you to focus on testing your MVP in peace, without getting bothered about the rent to be paid every month.

Don’t take the credit route

Credit has probably made life simpler, but if you are on your way to bootstrap your business, put all your credit cards aside. Research says credit cards affect the buying psychology of a person blurring the consequences as a whole. 

You definitely don’t want a long bill at the end of the billing cycle, do you?

Remember, the best part of bootstrapping is that you have the ownership of the entire company. And since you are not raising any capital, you want to remain as debt-free as possible. Piled up credit card bills might require an investment in order to bail you out. 

PS: The key is avoiding those calls that suggest you to increase your credit limit! 

Be a public magnet

These days, PR agencies are constantly in search of creating a buzz for startups. There are a number of ways to generate valuable press for your business if you are willing to roll your sleeves up and get to work. Make time to reply to queries and build an immense network with journalists that focus on publishing stories related to your business. 

Since emails can get lost sometimes, get active on Twitter and try to get your foot in that door. Twitter is short and sweet and many journalists monitor the platform on a daily basis. Hence, more chances of being seen! 

Evaluate every expense carefully

Right before you plan to spend an amount for something, run a quick check: Is it really needed? What benefit is it going to fetch? 

Bootstrapping is one of the most valuable stages a founder goes through. At a point when every single payment is scrutinized, it gets crucial to find creatively conventional ways to execute things. 

The key is to not directly run into action but to experiment and see what works best for your business. 

For example, before you plan to roll out a campaign on Facebook, spend a little amount and see what results it gets and then project a bigger picture!

Outsource wisely

Certainly, in the early stage of your startup, you are going to wear and change a lot of hats. From product managers to HR to marketing specialist, it is just you and your co-founder (if you have one!).

But as you grow, it is important for you to know when should you start outsourcing for the tasks that do not need your personal attention. Hiring a full team too soon can lead to negative cash flow and chances are, you might have to lay everyone off and pack up your own desk too! 

Pro-tip: Go for freelancers over full-time employees!

Go virtual

Technology has been blessing people from all folds and startups are the most privileged. Use cloud-based services and social media channels to avoid simple expenses like those of travel, rent and so on. 

On the other hand, make the best of the internet to market your product or service on different channels. The world indeed has become a small place, thanks to the world wide web. 

Importance of bootstrapping in an early age startup: pros & cons of bootstrapping

Each coin has two sides and so does the road to bootstrapping! Some of the pros of bootstrapping involve:

  • Sole ownership of your business: As a bootstrapped business owner, you (and your co-founder) have complete authority over your business. Even if you are a team of 3-4 co-founders, you will have a larger share of the equity when compared to taking your business through multiple rounds of funding and diluting your ownership.
  • Control over direction: When you and your team are the sole owners of the company, your mutual decisions are what matter. But if you have external parties funding your startup you might have to end up compromising on some of your plans, values and so on.
  • Longer age of business: If your idea is to keep your business for your lifetime and keep it running for coming generations, then bootstrapping is the way to go. Usually, if the external stakeholders have an upper hand over your business, chances are that you will exit the business in the longer run. 
  • Sense of accomplishment: If you are the person who wants to look back and say ‘I did it!’, you definitely should go for bootstrapping. You might miss this day if you get into multiple rounds of funding! 

These are some of the major pros bootstrapping gets. The cons of bootstrapping involve: 

  • Chances of survival: One of the major reasons for business failures is lack of money. Even if your idea is unbeatable and has potential to get acknowledged in the market, you will not be able to move bricks if you do not have enough budget. 
  • Limited growth: The reason businesses go for funding from external stakeholders is to scale big and fast. External capital assistance gets you visibility and takes the bar off from the marketing that you can otherwise do. 
  • Assistance from experts: Raising money is just one of the benefits of fundraising. Inviting others with an interest in your startup can help you get guidance and assistance as you scale. Board members and shareholders can guide you with ideas you might not think of. 

Bootstrapping or funding: What should you go for? 

With the basics in place about bootstrapping, the next question is, ‘What is better: bootstrapping or funding?

While bootstrapping allows a lot more freedom in decision making and a closed knit group is easy to work with, sometimes you need guidance from experts as well. When you are a bootstrapped company, you have no time to waste and each little decision you make goes a long way. You are in a stage of hustle and it is observed that bootstrapped startups are more effective in ensuring positive cash flow. 

With all this said, the fact is that raising a couple of rounds of funding can accelerate your growth and give your business the visibility it deserves. With funding comes in a lot of money and time to bid goodbye to money crunch, eventually opening doors for new initiatives.

To conclude, one of the suggestions is to get started as a bootstrapped company and push as hard as you can: cut down on costs, experiment and see what works the best and what needs iterations. You can choose to reach out to investors once you have quality insights and a strong roadmap, or maybe you can touch skies even without a single round of funds!

It’s all about the product or the service you provide, the founding team and at the end, marketing and tech efforts!

Some famous bootstrapped startups

  • Apple

Founded in 1976 by Steve Jobs and Steve Wozniak, they started building the device in Jobs’s parents’ garage. The motive, Wozniak says, was not to make money but to build good computers. They started with an MVP and it was named Apple I. Soon after that, they got an offer to build 50 computers, for which the duo fought hard to gather enough funds. 

Fast forward to the present day, Apple is valued at $1 trillion dollars. 

  • TechCrunch

One of the important aspects of a successful startup is the correct timing. That is what TechCrunch has nailed! While technology was booming, founders Michael Arrington & Keith Teare tapped into the potential that tech gossip and business news had. Clearly, this made TechCruch a leader in its time. Not to mention, their impeccable commitment to quality journalism is what helped them grow.

Takeaway? Even if you do not have enough capital, information and knowledge can fill up the gap and get you to a point that your competitors cannot easily reach.

  • eBay

Like many founders, Pierre Omidyar started eBay’s operation from his home. His mission statement read ‘dedicated to bringing together buyers and sellers in an honest and open marketplace’,. Omidyar continued to grow his business in alignment with the growth in internet usage and consumers’ demands. What eBay managed to do was create a sustainable revenue model that would keep growing continuously for years. 

With a futuristic strategy, correct timing and right approach in place, build a team that is ready to hustle and design a USP that is limited to your startup. With the basics in place, you are all set to kick off your startup and go places.

Now that you know all about bootstrapping, the choice is yours when it comes to one of the biggest decisions that entrepreneurs have to make: bootstrap or raise funds!

Also read: Non-disclosure Agreement: Meaning, Importance & Benefits 

A Beginner’s Guide to Venture Capitalists

Venture capitalists are well-heeled investors that often invest their capital in businesses with indelible growth opportunities. The infused capital is called venture capital. 

“One of the cautionary lessons of VC is, if you don’t invest on the basis of serious flaws, you don’t invest in most of the big winners.” 

―Marc Andreessen

When an entrepreneur initiates a project to seek, develop and validate a scalable business model to fruition, it becomes a start-up. They also refer to new businesses that intend to grow beyond the tag of a founder, have employees, and rise. 

But amidst all the hype and hoopla of being the boss and running your own company, a start-up needs money to kickstart. 

Know how to register a startup in India.

So what do you do? You pitch your idea to certain people who remain behind the screen– decision-makers and risk-takers, who validate your business model. They are Venture Capitalists (VCs).

Who are venture capitalists

Definition: Well-heeled investors often invest their capital in businesses with indelible growth opportunities. The infused capital is called venture capital, and the investors are known as VCs. 

By nature, VCs sail with risky investments or new businesses, which is adequate to hand-out high returns if they figure out the right venture. 

Or there’s also an amount of risk substantial enough to scare off banks! 

To ensure the money is well spent, VCs have the authority to leverage crucial decisions of the companies they are investing in.

Understanding venture capitalists

VCs are usually composed as limited partnerships where partners invest in the VC fund. It constitutes of a committee that is responsible for making investment decisions. 

Here’s an icebreaker: In contrary to popular opinion, VCs do not fund start-ups from the beginning. They often look for a strong management team and review the potential market, and unequalled products or services with a robust vying edge.

Most VCs also give preference to industries that they are familiar with.

After identifying the emerging and favourable companies, the assigned capital is distributed to fund the start-ups in exchange for a substantial stake of equity for a significant return on investment (ROI). 

Later, the quintessential VC investment takes place after an initial ‘Seed Funding’ round, which is called the Series A round.   

The VCs provide this financing option in the interest of achieving a return through an eventual ‘Exit’ event. 

Some of the well known VCs include Chriss Sacca, Twitter and Uber; Peter Theil, the co-founder of PayPal, Jeremy Levine, Facebook and Pinterest. 

Not to be confused with Angel Investors, also known as business angels–individuals who invest their wealth in a start-up. Whereas VCs are a group of financial specialists or organisations. 

Let’s dig deeper!

Difference between angel investors and VCs

Knowing the distinction between angel investors and venture capital investors is necessary to make the right decision for your business going forward. 

 

VCs

Angel Investors

VCs are part of an organisation  Angel investors work alone
Investment can range from a few million to tens of millions Limited financial capabilities 
Comparatively less risky  Uncertain revenue stream 
Depends on the focus of the firm and growth companies  Invests in pre-revenue business
Type of investment is through equity or convertible debt  Type of investment is through equity or SAFE  

Government regulations on funding from VCs

Yes, VCs and angel investors cover essential measure to support growth-stage startups, but there are government regulations that one must abide.  

Securities and Exchange Board of India (SEBI) is the regulatory body for VC firms or funds. Here are some of the amended regulations: 

  • The minimum investment should not be less than Rs. 5 lakhs 
  • Also, the minimum corpus of the fund should be at least Rs. Five crores
  • VCs who want to benefit under the relevant provisions of the Income Tax Act will be required to divest from the investment within one year
  • The venture capital fund will be eligible to participate in the IPO through book building route as a qualified institutional buyer 
  • SEBI removed the mandatory exit requirement by VCs to seek tax pass-through
  • The automatic exemption was granted from the applicability of open offer requirements

Know more about the tax incentives and exemptions to startups in India.

Conclusion

Because investments are illiquid and require a prolonged time frame to harvest, VCs are expected to carry out detailed due diligence before investing. They are also expected to nurture the companies in which they invest. 

In other words: “Start-up Financing is not just about raising funds, it is a holistic process that involves proper business planning with thoughtful growth targets, deciding business valuation as per the current market standards, planning potential exit options for investors,”

― Nucleus Partners

Also read: Income Tax Rules for Startups 

Non-disclosure Agreement: Meaning, Importance and Benefits

Non-disclosure Agreement:

A non-disclosure agreement or NDA is a written contract between two parties (people or organisations) that prohibits the sharing of confidential information shared between both the ends.

If you are running a business, or are about to start one, you know that there are numerous instances where you end up sharing confidential information with another party. And this fear of your data or information being misused sinks in. But hey, there’s a solution to this, just so that you can leave all your worries and focus on your business. It’s those three awesome letters: NDA or non-disclosure agreement! Read this article further to master the term and create a safe ecosystem for your business. 

What is a Non-disclosure Agreement or an NDA? 

A non-disclosure agreement or NDA is a written contract between two parties (people or organisations) that prohibits the sharing of confidential information shared between both the ends. 

In a nutshell, if you are asked to sign an NDA, you are asked to promise that the sensitive information shared with you should not pass on to any other body or an individual. On the other hand, if you are the issuer of an NDA, you are asking someone else to not share the information with anyone, that you might share with them. 

You can identify a non-disclosure agreement by other names like:

  • Confidential Agreement (CA)
  • Confidential Disclosure Agreement (CDA)
  • Secrecy Agreement (SA)
  • Proprietary Information Agreement (PIA)

Key elements of Non-disclosure Agreement 

A few of the major elements of an NDA include (not limited to the following):

  • Identification of the parties that are signing the agreement 
  • A precise definition of what is considered confidential under the agreement 
  • The clear reason as to why the information is shared and for what purpose 
  • An elaborated explanation as to how the shared information can and cannot be used 
  • Explicit information about the timeframe or the duration of the agreement

Types of Non-disclosure Agreements

Generally, there are three types of NDAs:

  • Unilateral NDA: In this type of NDA, two parties are involved. Out of the two, only one party discloses confidential information and expects the other party to prevent the information from any further disclosure.
  • Bilateral NDA: In this type of NDA, two parties are involved and both the parties disclose confidential information to each other with an intention to protect and secure the information from external parties.
  • Multilateral NDA: In this type of NDA, three or more parties are involved, out of which one of the parties discloses a piece of confidential information and the other parties promise to have that information protected from any further disclosures. 

When do you need a Non-disclosure Agreement

There are multiple instances when you might require to sign an NDA for your business. A few of them include:

  1. While entering into a business deal: If you are inviting a vendor or a consultant and want to ensure that the information you share does not go out, signing an NDA is the best option. In early-stage startups and some information sensitive companies, it is a brilliant idea to make each employee sign an NDA. This helps in ensuring that something as simple as the strategies, projected numbers and funds do not go out of the ecosystem. 
  2. While starting a new project: Let’s say you are an established business and planning to start off a new project. This would require the involvement of both internal and external stakeholders. It is advised to sign off an NDA so as to avoid any ambiguity or claims that may arise from either end at any point in time.
  3. While talking to investors or during mergers and acquisitions: This was a very common practice in the past. However, modern-day investors deny to sign NDA at a very early stage and hence, the practice is becoming obsolete now. At a point when the need arises to look inside the papers and numbers and the communication reaches the advanced stage, a request to sign an NDA can be made. This should carry clear justifications as to why signing an NDA is needed. Same goes with the process of mergers and acquisitions. 

Benefits of Non-disclosure Agreements

Here are some of the major benefits of an NDA:

  • Since NDA is a legal document, it is of immense importance for any conflict that might arise in the future. Any party infringing the agreement would be legally liable to compensate for damages.
  • It clearly states (in written format), anything that comes under the bracket of ‘confidential’, in the long run avoiding any ambiguity or loss of information.
  • It maintains the secrecy of the information shared between two or more parties and reduces the chances of important information going out of the organisation.
  • Overall, it protects disclosures of intellectual property (including trade secrets, proprietary information and other confidential information), safeguarding the organisation as a whole.

Precautions while creating and signing a Non-disclosure Agreement

While you go ahead and create an NDA for your business processes, here are a few things you need to take care of: 

  • Ensure that all the information mentioned is precise and the language used is simple and unambiguous
  • You must make the involved parties read the entire NDA and verbally explain it. This will help in avoiding any further misunderstandings
  • Do not involve non-required clauses or use conflicting sentences while drafting the document
  • Make sure that the document has an expiration date and if need be, renew the same if required

What happens if any clause from the Non-disclosure Agreement is violated?

At any point, if you discover that any confidential information covered under a clause of the NDA is being shared publicly, it is crucial to quickly gather evidence against the action. Get answers for questions like who has leaked the information, how have they leaked it, what is being done with the information and so on. The next step is to hire an attorney familiar with business nature and further follow the legal road.

With this, you are all set to safeguard your business and its details by drafting a quality NDA in place. NDA comes under the bouquet of the little things that build the prerequisites of any successful business.

So the next time you are about to kick off with a new strategy, use the above-mentioned points and keep securing your business while you grow!

Also read: All You Need to Know about Balance Sheets

All You Need to Know about Balance Sheets

Balance sheet:

A balance sheet is a financial statement of a company. It includes assets, liabilities, equity capital, total debt etc. at a particular point in time. It includes assets on one side and liabilities on the other.

Simply put, it is a snapshot of the financial status of a company at any given time. It is usually calculated every quarter, six months or a year.  

We understand that maintaining a financial report of your company and managing all the funds is no cakewalk. To make it simpler, we have created a quick guide which will help you understand everything about the Balance Sheet, so that next time when you create your statement, you are at ease!

What is a balance sheet?

A balance sheet is a financial statement of a company. It includes assets, liabilities, equity capital, total debt etc. at a particular point in time. It includes assets on one side and liabilities on the other.

Simply put, it is a snapshot of the financial status of a company at any given time. It is usually calculated every quarter, six months or a year. 

Objectives of a balance sheet 

No matter if you are a business owner or just starting with one, it is essential to know why should you have a balance sheet. Balance sheets are helpful to:

  • Present the actual financial position of your business 
  • Keep a track of the debits and credits
  • Evaluate the value and position of all the assets and liabilities
  • Know the amount of capital owed to the owner at the year-end
  • Use as a reference in case a requirement for a loan arises 
  • Know the trend of liquidity and the profit/ loss position of the business
  • Evaluate the strengths and weaknesses of the business 
  • use as a reference when building some policies and plans for the business

Mentioned above are the reasons why you must have a balance sheet for your business. Having it proves to be advantageous because it:

  • Makes calculating various ratios easy, which helps in managing the business in a better way 
  • Helps in easy solutions, in case of financial disputes
  • Makes it easy to see the business growth at given times (assists easy comparison)
  • Is a massive resource in case of acquisitions and selling of businesses 

Types of balance sheets

After understanding the importance of having a balance sheet, the next thing you need to know is the types or the classification of the balance sheets. Broadly, there are two types of balance sheets:

1. Classified Balance Sheet: As the name suggests, a classified balance sheet are well-segmented reports. It separates the assets and the liabilities of the company into current and long-term classes. It also provides additional details about the net worth and liquid funds of the business.

Classifed Balance Sheet

2. Non-classified Balance Sheet: A non-classified balance sheet reports the assets and liabilities but does not separate them into various classes. Compared to a classified balance sheet, a non-classified balance sheet is simpler to produce, but over time, it may raise questions from investors or other outside parties about the business’s net worth and liquid funds.

Unclassified Balance Sheet

Various formats of balance sheets

While the main focus of creating a balance sheet is to create a financial document of a business, you have an option to choose a format of your choice! Most commonly used balance sheet formats are:

1. Common Size Balance Sheet: This format is the standard format and hence, the most used format to prepare a balance sheet. This format displays the standard information, along with a column that displays the information as a percentage of the total assets.

Common size Balance Sheet

2. Comparative Balance Sheet: This format presents side-by-side information about the business’s assets, liabilities etc. as of multiple points in time. This format is used to analyze a company’s balance sheet over time to identify changes and trends. 

Comparative Balance Sheet

3. Vertical Balance Sheet: This format is the one where the presentation format is a single column of numbers. This starts with assets line items, followed by liability line items and ends with stakeholders line items. Within each of these categories, line items are arranged in decreasing order.

Vertical Balance Sheet

Commonly used terms in balance sheets

  • Assets: Anything that a business owns is called an asset
  • Non-current assets: Anything that does not belong to the company but is projected to stay with them for a year. Example: machinery, vehicles etc. 
  • Current assets: Anything that is likely to be encashed within a year’s time. Example: inventors, debtors etc.
  • Liabilities: Anything that a business owes to someone is called a liability 
  • Non-current liabilities: Debts that the business has more than one year to repay
  • Current liabilities: Debts that the business has to clear within a year’s time
  • Total current assets: All current assets added together
  • Net assets: Net worth of the business’ assets and liabilities 
  • Total equity: The value of shareholders’ funds

For now, this is it! 

Balance sheets are of immense importance, be it a startup or an established business and building them and managing requires in-depth understanding. The above-mentioned information should be useful to you and make this task, an interesting one!

Also read: How to Get a PAN Card for Your Company

 

How to Get a PAN Card for Your Company

Permanent Account Number (PAN):

A Permanent Account Number is a 10-character alpha-numeric identifier. It is issued by the Income Tax Department to all judicial entities identified under the Indian Income Tax Act, 1961. The primary purpose of PAN is to identify all financial transactions of an individual or company and prevent the evasion of taxes. PAN also acts as an important proof of identification. 

A Permanent Account Number or PAN, as it is commonly known, is not just for individuals but for companies as well. PAN is for all taxpayers living in the country, be it an individual, a partnership or a company. Furthermore, it also acts as an identity proof. 

For you to get the unique 10-character PAN, you need certain documents and identifications. In this article, we address a few things that you should know if you want to get a PAN for your company. 

Which companies require a PAN card?

Any individual or corporate involved in business in India requires a PAN card. Be it an Indian company or a foreign company, you need to get registered and have a PAN card. 

Also, if your company is generating money from outside India but was registered in India or has a permanent establishment or even a simple office in India, you need a PAN card. 

If you come under any of the following entities, then you should be having a PAN card to deal in any kind of business. 

  • Company
  • Partnership firm
  • Association of persons
  • Limited Liability Partnership (LLP)
  • Body of Individuals
  • Trust
  • Incorporation
  • Limited company
  • Private firm
  • Association
  • Foreign institutional investor
  • Hedge fund

Why should your company have a PAN Card?

Your company’s PAN card is of huge significance as every transaction will go through this number. It also helps in identifying the tax flow of your company. Additionally, even if you are not eligible to pay tax under income tax benefits given to startups, you still need a PAN card if you are earning money. 

The following are the reasons why your company needs it:

  • For any tax-related transactions and documentations, you need to quote your PAN. By giving this number, the Income Tax Department can track your transactions. It is important that you have this so that no trouble comes your way
  • If you are a foreign company, you need to have a PAN to operate in India. Otherwise, the government can charge you the highest possible tax rates
  • The PAN helps you in the payment of your invoices without deduction, filing of tax returns, remittances and much more
  • If you need a TRN (Tax Registration Number), a PAN is a must
  • According to the amendments made under Section 206AA in 2009, every foreign company must have their own PAN to continue with any business with a company in India or inside the country. All kinds of entities are included in this
  • The Indian government has the right to charge you 30% or more of your invoiced payments in case you do not have a PAN

How to apply for a PAN?

You can apply for a PAN card through the online route through the NSDL website or do it via the offline method. 

The online method

  • You need to visit the NSDL website and fill the Form 49A from the drop down menu
  • For the option of ‘Application Type’, fill the form listed under ‘Firm’. Fill in all the details like company name, date of application and so on
  • Post this, you need to fill in the income details and company registration number. You also need to fill in the communication address
  • Fill in the Assessing Officer code (AO Code). If you do not know it, you can find it in the AO Code Search Panel in the NSDL website 
  • You need to upload copies of the required documents and pay the said fees. Certificate of Incorporation and Address proof are the two most important copies of information
  • Upon following all the steps, you will get an acknowledgement number through which you can track the details of progress regarding your PAN Card
  • You then need to send a signed acknowledgement form to the NSDL head office within 15 days

The offline method

  • You first need to download the Form 49A from the NSDL website and then print it
  • Fill the form as per the requirements and attach all the necessary documents
  • You need to submit the form and documents to the nearest NSDL centre. If you do not know a centre near you, you may find it on the website
  • The centre will issue a letter of acknowledgement as a proof to the fact that you have submitted your details and documents
  • Upon thorough verification of your details, you will receive the PAN card at the mentioned company address. The cost of this whole procedure costs you just 100/-

Documents required

For an Indian company

  • An identity or address proof
  • A copy of the Certificate of Incorporation
  • A copy of a No Objection Certificate issued by MCA (Ministry of Corporate Affairs)

For a foreign company

  • A copy of the registration certificate issued by Indian officials to setup an office in India
  • A copy of the certificate of registration from the applicant’s native country, duly attested by ‘Apostille’ or by the Indian Embassy or High Commission or even by authorised officials of overseas branches of scheduled banks registered in India

Furthermore, you need a bank draft that will be used to pay the issuance fee to the Tax Department to get a PAN card. Make sure that the payment is done in INR. You can also draw a foreign currency draft in favour of NSDL. 

If your ID proofs and company-related documents are all correct, the whole process does not even take a month. You can easily acquire the PAN card for your company and indulge in business in a smooth manner. 

Also read: How to Register a One Person Company in India

A Complete Guide to Getting Started with Quora Ads

Quora marketing is in vogue and marketers have accepted this! Alike big players Facebook & Google, Quora ads can help you reach your business to masses. People visit Quora each day to ask questions and find insightful answers. By using a powerful strategy and correct targeting, you can use Quora ads to reach out to millions of people and advertise your product/ or service.

Before you dive in deep and understand how to run ads and scale up on Quora, read our blog on Quora marketing for business to understand the basics of Quora.

Wondering why should you choose Quora out of all the available options to market your business? Here’s why:

  • Reach relevant audiences: Quora has a user base of millions and while you market on Quora, you are reaching a community that is genuinely interested in what you have to say. 
  • Target larger groups: Unlike Facebook and Google, Quora has a very niche audience and hence, it makes the possibility of reaching the right ‘masses’ even higher!
  • Find high intent readers: Users on Quora are observed to have high intent of taking action compared to other paid marketing channels. This makes it a strong reason for your business to enter the platform.
  • Protect your brand: While Quora has people from all folds, it ensures that the profiles are created basis real identities. Quora’s moderation policies makes the ecosystem even safer by skimming through content pieces and profiles.

How to get started with Quora ads?

Just like any other marketing platform, Quora should not be approached with the ‘it’s all about sales’ mindset. The reason is, Quora has users from all sectors and most of these people exist to consume and contribute to the extensive knowledge base. 

Create an ad account on Quora

1. Click on the ‘Start Now’ button on Quora for business official website

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2. You will be prompted to ‘Create Your Ad Account’ (in 2 simple steps)

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Create an ad on Quora

1. Once you are all set with your Quora ads account, the next step is to create an ad campaign. Click on ‘Create Campaign’ button

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Note: Basis your end goal, you can choose the objective for your Quora ad. Here’s a quick guide to assist you at this step:

  • Conversions: Choose conversion if you want to send users to your website or a landing page to complete an action
  • App Installs: Choose app installs if you want the user to download your mobile application
  • Traffic: Choose traffic if you want the user to simply visit your website or a landing page 
  • Awareness: Choose awareness if you want your users to see and engage with an answer on Quora 

2. After you picked up the relevant objective, the next step is to fill in other details like budget, tenure etc.

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3. Further, you will be asked to create your target audience. You can select an option from ‘Primary Targeting’ and specify the locations based on your understanding.

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4. You can choose to target an audience on the basis of the device they are using. You can also choose to exclude a set of an audience! 

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5. After having the basics in place, you will be required to choose the type of ad. You can choose to create an image-based ad or a text-based ad. You also have an option to promote one of your existing answers!

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6. There you are! You have successfully created an ad on Quora! 

Tracking & conversions

1. After you have your ads up and running, all you need to do is measure the performance from time to time and keep iterating your actions accordingly.

2. For easy and transparent tracking, Quora asks you to configure your Quora pixel.

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3. You can choose to install the pixel manually or to install with a partner.

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4. Basis your chosen option, you can either choose to copy the script or give your pixel ID.

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5. Lastly, you will have a consolidated dashboard where you will be able to track all the metrics you essentially need to!

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With this, Quora ad platform also offers you to create and download detailed reports!

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10x your brand awareness and traffic with Quora ads

Quora is one of the best sources of reliable information with experts across diverse industries who are constantly sharing valuable knowledge and experiences. The platform has come a long way from being a Q&A platform to a robust advertising channel. 


Although a little slow in the initial stages, Quora ads are a proven way to accelerate your business growth. With an easy-to-use and simple interface, Quora ads, if targeted well is going to bring in the visibility your business deserves!

razorpay

4 Video Marketing Hacks For Businesses In 2019

We will start with a simple question. How many of you like to read promoted posts in your feed? 

Let me help you here. None. Because today, people, in general, don’t want to read as much and images aren’t nearly as dynamic. 

YouTube videos, Snapchat clips, GIFs and Instagram are the most preferred social media platforms for the new generation. Also, thanks to more exceptional technology and user expectations, video marketing will become even more exclusive in 2019 and beyond. 

Video has dominated social media. And, to ensure your video marketing campaigns wham your objectives and push your social media forward, here are some hacks to cut through the noise.

1. Sell by not selling

According to a report from HubSpot Research, more than 50% of consumers want to see videos from brands. There is a ton of sales muddle on the internet that repels and annoys your customers. Don’t let your brand be that annoying orange. Instead, centre your message around the story and not the sale. 

For instance, apply the same rules of written content marketing to your campaign–add value for your customers. Personalise your videos and strike your audience’s heart with an emotional appeal to heighten your brand awareness or any specific objective tied to the campaign. 

Pro Tip: Tell a great story

2. Shorter the better

Probably, one-fourth of your viewers will scroll away from a video within 15 seconds or less. Avoid lengthy and overstretched narratives, cut it short, and get to the point in the beginning 5-10 seconds to manage customer expectations. 

Pump in the element of surprise by building curiosity, ask questions and use teasers to hook your customer’s attention. Immediately convey the value, Inspire them, make them laugh and give them enough reason to watch. 

Pro Tip: Build foundational knowledge with How-To videos

3. Introduce humour. Don’t be boring 

 

When it comes to social media, younger generations are more open to humour. As a brand, this is your chance to try something unconventional. 

Very often in the B2B world, people get panicky about comedy and say it doesn’t belong here. Think again, will someone follow your social media profile just to watch what you have to say about your product? 

Therefore, it’s essential to build a connection, stay relevant and show your audience that you are not firing automatic tweets. Give them a reason to stay. 

Pro Tip: It’s easy to imitate your competitor’s stiff tone, but can you crack a joke and standout?

4. Don’t forget SEO

YouTube is the world’s second-largest search engine, and people turn to the website for DIY videos, to be entertained, learn something new, etc

The creation of unique content is essential, but it’s equally important to ensure that your target audience can find the content. And, search engine optimisation is one of the most effective ways to boost the visibility of your content.  

To ensure your videos gets seen, tag your videos with relevant keywords, fully explained descriptions and unique titles. Publish and share your content on relevant platforms, add subtitles, and introduce good quality imagery via custom thumbnails to sell your video.  

Maximise exposure by uploading content using each platforms’ native player because videos posted directly on a platform increases your chances for better engagement. Finally, measure your performance–determine what worked and what didn’t, and later, optimise your content.  

Pro Tip: If there’s a box, it has a purpose. Fill it up, because Google wants you to.

Conclusion

The idea of video marketing isn’t brand-new, but if you aren’t creating videos, you’re likely falling behind. And what matters to your audience is simple, raw and authentic content. 

Till then, keep hustling!

Read more: 6 Major SEO Mistakes to Watch out For! 

6 Major SEO Mistakes to Watch out For!

If you’re familiar with anything related to digital marketing, you may have heard the term “SEO” and “optimization” one too many times. 

So, what is SEO? Why is it so relevant and why does everyone keep stressing out so much about it?

To start off, SEO is short for Search Engine Optimization (SEO) and is the process of increasing the quality/quantity of website traffic. This can be done by increasing the visibility of a website or a web page to target users of a particular web search.

As you may know, Google is the largest search engine and accounts of most of the traffic on the Internet. With almost every company taking their business online, SEO is arguably one of the most important metrics to measure success and reach of your brand.

It can be easy to get lost in a flood of opinions on “groundbreaking” or “killer” strategies that are all over the internet. But it’s important not to lose focus on the basic do’s and don’ts before you delve into the specifics. 

We’re here to let you in on a few common mistakes that people end up making that might affect them later and to make sure you stay away from them. So, here goes, six SEO mistakes to avoid making while you’re running a website!

#1 Broken links

One of the easiest things to overlook, broken links can be a dampener to your SEO rank. A broken link can cause your page to rank negatively. 

A broken link is essentially a website/page that doesn’t exist. This can be due to many factors like the website not working or taken down or even just a typo in the URL. The search engine doesn’t like to crawl the web pages that return a 404 error code because simply put, it wastes their time and resources.

When you backlink these sites in your on-page content, this can cause your page rankings to fall. Hence, it’s best to exercise caution whilst uploading links to your site. Also, make sure to keep a regular check of these links, every once in a while.

TLDR: Broken links= Low ranking

#2 Poor quality content

As a rule of thumb, it’s important to know that your page will rank higher only when the content is relevant and is of good quality. After all, the popular digital marketing phrase “Content is King” stems from this. 

With millions of websites trying to make their way to the top with keyword stuffing and other such ways, the only way to stay on top of the game is to be authentic.

Poor quality content is not just limited to the absence of any value-adding factors like infographics, graphs, etc. but also includes a whole other category– plagiarism. 

In a world with millions of articles and opinions on the same topic, originality remains a key factor in making your content rank on top. Duplicated content can be easily detected by the search engines and will affect your ranking severely if found plagiarized. 

TLDR: Copied content is a big no-no. 

#3 Keyword stuffing

Keywords are essential to improve SEO but overdoing it can also end it for you. A particular keyword like “Tourist Spots in Bengaluru”, should be strategically used in your blog. 

Keyword stuffing may lead users to your site (deceptively at that), but adds no real value to your content and may be useless to your audience. Therefore, instead of simply overstuffing the content with keywords, focus on the relevant targeted keywords that will help you rank well on the search engine.

 Also, make sure to avoid phrases that make the content seem unnatural. After all, your content floats only when it makes sense. If the reader notices keywords being stuffed in some corner of the page without any relevance, it can even affect the reputation of your company. 

TLDR: All those keywords! It’s a bit stuffy here, isn’t it? 

#4 SEO for images

One of the easiest things to overlook while writing a blog is the “alt-text” that’s used in images. The alt-text is somewhat of a caption that displays when a cursor is run over it. This attribute, while mostly ignored, can greatly contribute to the SEO of the page. 

An alt-text can even include primary keywords to boost your SERP (Search Engine Ranking Position). In short, never forget to optimize your alt-text, if you’re looking for better results.

TLDR: A picture is worth a thousand (key)words. 

#5 Slow website

In the era of high-speed internet, it’s impossible to deny that slow loading websites are a major buzzkill for the reader. Nobody likes to wait for anything and what do you know, a mere 5 seconds can end up making or breaking your impression.

A faster website means lower bounce rates and higher conversion rates, simply because the user isn’t provided with the time to get frustrated and go somewhere else. This can prove to be extremely helpful overall. In a recent study done by Google, it was found that more than 53 percentage of users are more likely to leave a website if it takes more than 3 seconds to load.

Therefore, it is important to regularly monitor and optimize your website’s speed with a speed test that’s available on the internet. Some popular speed test websites in India are Ookla and RunTest.

TLDR: Slow and steady doesn’t win the race, always. 

#5 Sparse Content Promotion

If you take a closer look at all the successful companies in the world, you’ll notice that they have one thing in common– a great social media presence and good content promotion. Social media presence is many things but the main component that makes it is brand awareness.

In the process of brand awareness, you are required to familiarize the audience with every update you make on your website. This also essentially involves promoting articles and blog posts, which ultimately drive traffic to your website.

TLDR: Go social or go home. 😌

#6 Ignoring on-page SEO

While formulating the SEO strategy for your page, it’s essential to consider both

on-page and off-page SEO. A lot of marketers spend more time improving the off-page of a website, but they ignore the former. 

When a web page, it’s essential to optimize all its elements– that includes the titles, meta descriptions and tags. Here are a few mistakes you may be making in on-page SEO:

  1. Not including the primary keyword in the title and meta descriptions
  2. Drafting wordy or long titles and descriptions
  3. Poor readability of the content. Long, arduous paragraphs without a break can bore the reader. Instead, break it down to bullet points for easier consumption and better visual appeal

TLDR: What’s on your page is as important as what’s not on your page. 

Conclusion:

In conclusion, when you’re running an online business, it’s best to keep an eye out for smaller elements like readability and user-friendliness. You never know how it impacts the business in the long run. 

If you notice yourself making these mistakes, it’s advisable that you come up with a quick-fix in the early stages. Draft the right strategies with a few guidelines in place and before you know it, you’ll be exactly where you want to be.

We hope this article helped you. We’ll see you next time with more tips on how you can successfully run an online business!

Also read: Top 5 Social Media Tools for Businesses