Startup loan! whats that?

Startup loan is a special loan given to young startups that are not serviced by traditional banks and are too early to attract institutional seed venture capital. The deal is structured as a loan (which can be returned after next round fund raise) along with an equity kicker. While VC/ Institutional Seed/ Angel network fundraise needs a lot of traction and validation to prove product-market fit, scalability and unit economics and hence takes time, we invest with very early proof of the above and mainly on the founder and his thought process.

We know that all it needs is 1 person to change an industry. And we are here to back him.

Whom do we fund?

We fund new economy startups that can raise venture capital and show a potential of high growth and defensibility.

Passionate Founders

Essentially we fund founders. Who have insights. Who have vision. Who can execute. Who can scale.

New technology businesses

We fund companies in technology - internet, mobile and any IP based startup in general

No/low burn models

Since we fund small amounts of money, we back startups that have no/low burn models.

High growth potential/ VC Fundable

We back founders who can go and raise Venture Capital investments in a short period of time.

Typical Loan Size

  • 10 lakhs (up to 20 lakhs)
  • Returnable upon Subsequent Fundraise (in any case maximum upto 3 years term)
  • Small Equity stake option

Benefits of Startup Loan

We help solve:

  • Risk of inadequate runway
  • Aggressive milestones that affect valuations when raising capital
  • Taking loan from relatives or friends
  • Concerns of excessive dilution
  • We act as mentors/advisors - with skin in the game
Extending Runway gives you more time to build the startup or pivot that maybe needed in the early stages based on market learnings.
A long runway gives startup founders more time to achieve expected milestones of an institutional round and thus get higher valuation as achieving milestones often positively impacts the valuation.

Past Portfolio

Apply here

The way to get started is to quit talking and begin doing

Tell us about yourself and your startup:

Investors

Hari Krishnan

Fund Manager, Astarc Ventures.

Arun Natarajan

Founder, Venture Intelligence

If you are an early stage investor we love to partner with you.

How can we partner

Refer-in

If you know a founder whom you like and would fund him in the near future, and would like the startup to validate a few areas or achieve certain milestones to qualify for your funding, you can refer them in to us. We take refer-ins from early stage investors seriously and give them priority attention.

Dealflow

We showcase startups that we have helped, to early stage investors for their first round of fundraise (Refer-in startups are not showcased to other investors if so specified).

Frequently asked questions

Loans are typically returned upon subsequent fundraise.

We typically lend at 18% interest rate.

Equity kicker is usually upto 5%.

  • We help you when other investors want to wait and watch. And this small loan gives you critical runway and your valuation increases significantly to justify the equity kicker. (imagine a 30% dilution at such an early stage – which if done after achieving some milestones can become a 16% dilution because of the extended runway).
  • We give an option to the founder to buyback the equity kicker at a discount to valuation at fundraise (valid for upto 6 months post fundraise as well – which can be funded by founder’s salaries). This option can be extended to the startup’s investor as well (in cases of Refer-Ins or when founder recommends this).
  • Since we assign a specific Investor as Mentor/ Advisor, we value add and help you shape the startup into a value creating one, and help with our connections for next round fund raise. Your success is our responsibility. So think of this as advisory equity that you may have otherwise given to an advisor. Here you have an advisor with skin in the game as well

We want to help as many startup founders at very early stages as possible. We know that funding at this stage is very difficult to come by. Return of loan helps in recycling of money to more and more startups. It is sort of a pay-it-forward mechanism at work.

The loans are to be guaranteed by the founder and hence to be paid by the founder from salaries his next startup or job that usually one ends up with. We give flexible timeline upto 3 years to return the loan on a periodic basis. Return of loan ensures that only serious founders apply to us, there is a commitment and funds are judiciously used.

Yes we help startups before their first fundraise, so we are flexible to accommodate such situations as long as our ticket size would help you. We are flexible with lower equity kicker percentages in such situations.