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  • 1. RAISING OUR FIRST VENTURECAPITAL

2. When Pawan and I started Wheebox.Com we had cleartarget to make our business an enviable brand. We hadtwo clear goals in our mind, one to make our productdistinctively clean from other assessment vendors andother to work with selected few customers and makethem super happy for first two years then replicate andscale.Both of us had one goal missing and that was FinancialGoal. None of us any point of time thought, How muchrevenue shall we clock from the first year of operations?While we were working with some of the best Tech andSales interns, somehow both of us were lost in our focusof making money. (Principal of any successful businessto run)By the end of the year we could build three properties, aclean product, 2 great IPs and 4 paying customers. Andhow the year passed by, neither Pawan nor I could keep atrack, because each day and each hour was spent eitherwith Product teams or clients meetings.By first quarter of 2011 our board (Which comprised 2 ofus and our two advisors Ujjwal and Sandeep) had figuredthat to scale and to enter specific markets we need capital.(I have to admit that it was Ujjwal who pointed this outand we reluctantly agreed to raise capital). Thus weagreed to excite investors and raise capital after closingfinancial year of 2011-2012. 3. Making Investment Proposal Draft By second week of April, 2012, it was the first time we sat down to write an Investor Proposal (I did most of the reading from Internet and Websites of VC), Out of us it was Ujjwal who was a part of his previous organization to raise capital from a large VC and knew at-least more than any of us. We somehow could copy and paste the available models and circulated amongst ourselves to review, interestingly we could figure out 5 things that awakened us.1. India stand-alone will have over 200 million (UniqueUsers: Single Instance) online test takers by 2016-2017.And our target market (BRICS) will have 900 million(Unique Users: Single Instance) by 2019-2020. Each userwill minimum undertake 3-5 online such assessments forStudy, Jobs, Admission and Test Practice and thus 4.5billion users per annum will exist and even with 2 dollarsper test it will comprise of 9 billion dollars business onlyfrom BRICS.2. Only 30% of test takers will move from Pen and Paper toOnline by 2017-2018. Hence a huge opportunity forOnline movers. (Calculated over 100 billion marketglobally by 2025) will exist for next 20 years.3. There are 10 odd serious online players in BRICS that wehave to compete in next 6 years.4. Government will be the major spenders of this business.5. Content may not play the only distinction in the nextrevolution, the major splash of revenue will come frombest technology companies who can give scale,robustness and huge insights of analytics. Identifying Venture Capital Firms Once we were ready with our proposal our job was to identify a few investors and we thought to seek help from a friend Anindya from Corporate Knowledge partners who had some experience in raising capital for a few start-ups. I asked Anindya if he could provide some 4. consultancy to review our proposal and also if he can getus a few echo walls (Investors/VCs who jump at allopportunities to dig more for their portfolios) and myguide-lines were clear to Anindya, seek investors whohave invested in Assessment Companies as they will beeager to dig more information from any new start-up andask us right questions and thus correcting our presentationfor the right set of investors).We met 2 such echo walls and both the meetings werehurting (Though we were prepared but still I had someego as all entrepreneurs possess). Both were critical ofour model, inexperienced team, inaccurate and businessplanning. But both of them had good feedback for Pawanand me and our product nonetheless the meetingsprepared us enough for actual presentations.By the time with enough preparedness (We thought so),We sent our initial set of presentation (20 Slides) versusindustry norms of sending not more than 8-10 slides to 4PE/VCs, instantly we received conformations from 3 ofthem asking us to wait for their responses.Meeting InvestorsAnd then within a fortnight we had 3 one-on-onemeetings lined up with either the decision makers or theinfluencers, As I was the only person in our set-up, whocould interface and I had no experience in raising capitalor meeting these set of business specialists. I knew actualmeetings are very different from the staged meetings wehad done earlier with other 2 VC firms, as there myintention was not to get funded from them but to getfeedback for real meetings.My first date with Lumis PartnersWe met Aditya one of the partners at Lumis and had asmall but very interesting discussion. The half an hourdiscussion with no formal presentations revolved onlyaround Education Industry, Team and my personalstrengths. Interestingly no discussion around Business 5. Plan, Projections, Industry Observations, MarketPenetrations, nor was on Burn Rate, Capital required oreven our immediate and long term goals.The meeting ended with a commitment to meet shortly.My immediate feedback was mixed to my team, as itended well but no concrete discussions were done.Meeting SEED FUND:I had done some home work on SEED FUND andinfluenced by videos of Mahesh Murthy and I wasexcited to meet them as they were one of the investors ofREDBUS.IN and I knew that the team could give mescale, bring best practices of Internet Business in a jiffyrather than I do it myself. My meeting with Shailesh wasshort at our office. He looked somewhat lost and in ahurry and thus was to the point. But this time myfeedback to the team was clear, we would not go aheadwith them because for me we both have like each otherbefore even talking about business. (Even SEED FUNDdid not connect us further).Meeting Indus Balaji Private Equity Education FundMeeting Indus Balaji was a good feeling, as the managingpartner Ashish was my senior at NIIT and I was sure thatit could help in initial ice breaking. And it did, as wecould start conversation instantly. Meeting went of verywell with IB presenting themselves and their plans andwe presented ourselves in a very professional manner, butI could figure out that they were interested in majoritystakes and some changes in the business model. As themeeting aroused enough positive feeling inside me hencefor the time being the equity and the other issues were notintruding factors in my mind.We both parted with a next meeting date. 6. Meeting Sequoia CapitalIn last week of April we got an email from SequoiaCapital asking us to meet. We were thrilled to see theirpresentation and their portfolio companies attached withthe email.They set up a formal meeting at their Delhi Office, It waslove at first sight with Sequoia, The lady at receptionknew me and made me comfortable in their meetingroom, the office boy addressed by my name and asked fortea/coffee. I have never been exposed at suchprofessionalism during my 15 years of workingexperience in India and abroad. I understood why peoplelove working with them, and it was a feeling of beingloved.Meeting their Analyst, Ishaan was equally a good feelingand again it was a personal discussion not businessspecific with a deadline to meet shortly with the realpresentation.Within next 3 days the next date was fixed withManaging Director of Sequoia, G.V.Ravishankar (Knownas G.V), though it was on Video Conference whereIshaan and I joined from Delhi and G.V joined in fromBangalore, but the hour spent was very enriching.This time it was all business and it ended with G.V askingus if Sequoia can introduce us to their partners orInvestees. As promised they instantly did that, butsomehow by that time we had moved to the next roundwith Lumis and Indus Balaji and we excused ourselves.But with my little experience with investors, I can vouchSequoia guys were one the best of the lot we had met.They know how to love entrepreneurs and buildrelationships. 7. Getting Terms SheetsWe had 2 rounds of meeting with Sandeep (M.D ofLumis) and I found both the times he had given valuableinputs to build Assessment Businesses. But both themeeting did not give me any clue of investments. Andthen in May first week Lumis introduced me to Pankajfrom PeopleStrong (One of the investee companies ofLumis).Meeting Pankaj was the same feeling as meeting Sequoiaguys. I found Pankaj to be genuine, ambitious and sharingthe same passion as we were driving in ourselves. Postmeeting Pankaj my feedback to the team was, possiblywe have found the right investor.Next day Pankaj made me meet Co-Founder and COO,Shelly and the executive team, I could make out thewhole team at PeopleStrong is reflection of Pankaj andShelly, each of them are passionate bunch ofprofessionals, high in energy and genuine to the core.And no wonder this could be the first reason todayPeopleStrong is one the leading RPO of the country and avery successful venture within 6 years of operations.Pankaj and Shelly flew down to London and met Pawanand instantly they liked each other. We were somewhatclear that we could close the transaction with them andlook forward to a Term Sheet.Interestingly in that week itself we received the TermSheet from Indus Balaji with 15 days of closure period.Pawan and I were thrilled to receive the term sheetbecause of our valuations over the period. And mostimportantly, it was the first time we had seen somethinglike this and proud of building something in a year wherepeople could value and put their money as an investment. 8. Now the problem was to get the Term Sheet fromPeopleStrong and map both the offerings.I had no choice but to speak to Pankaj to get us the TermSheet as we need to close the transaction and to mysurprise he called an immediate meeting and asked me tomeet his set of Advisors (Some heavy names of theindustry) to get their feedback and close the transaction.Ground rule is you cannot force an investor to rushthro