India has always been a HubSpot for emerging businesses and investments and the availability of diverse forms of capital is an important part of the modern capital stack for any business. There has been an extraordinary surge in the number of startups in in India and the emergence of unicorns, however it is still seen that the founders face ongoing challenges in securing funding.
At this point, it seems that it is very critical for founders, entrepreneurs and/or promoters to understand how diverse forms of capital will always play an important part in the value creation for any business. Traditional options like equity funding and bank loans still serve most businesses well. However, as the economy evolves, it opens doors for more sophisticated funding options, accommodating various stages of business growth – like Quasi Equity.
Quasi Equity is a form of capital that bears resemblance to equity funding but stands apart in significant ways like – no equity dilution, no questions asked, no collateral or interest, and most importantly, no bias. Nowadays, businesses are also using equity-free capital solutions like cash flow-based financing and performance-credit to extend their runway without diluting equity. For businesses in the growth stage, it is often more prudent to retain equity, allowing valuation concerns to take a backseat while focusing on sustainable growth to drive value creation.
Though the traditional funding approaches are facing challenges, there is a lot of dry powder accumulating on the sidelines waiting to be deployed by the investors and here comes our role – to provide our clients with a hassle free, fundraising journey. We at Indcap Advisors Pvt. Ltd., have over the last 25 years, been providing customized solutions in the areas of Corporate Finance and Management Advisory, Private Equity, Mergers and Acquisitions, Valuation and Restructuring Advisory. Our team has expertise in advising clients on the kind and amount of funding required depending on where a business stands in its journey as we believe in one-size-does-not-fit-all.
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