Last Thursdays with an Entrepreneur has been an expertise sharing and networking platform for successful and aspiring entrepreneurs since 2008. It has hosted more than 75 entrepreneurs in the past eight years. As the entrepreneurial ecosystem has evolved in Kathmandu, the event organizers felt the need to adapt the event to take the current market scenario and needs into consideration. Since, various colleges and other organizations have been organizing similar events that focus on providing inspiration to aspiring entrepreneurs, Biruwa, the current organizer of the event, decided to go back to the program’s original vision of becoming a platform for entrepreneurs to connect and learn of market opportunities rather than being just a platform for aspiring entrepreneurs. The change is also reflected in the event’s new name, ‘Last Thursdays for an Entrepreneur’.
‘Last Thurdays for an Entrepreneur’, under its new format had its first event on January 26th at Venture’s Café located in Baluwatar, with a turnout of around 50 participants. The event looked to inform the audience about how entrepreneurs can become better prepared for investment and get an investor’s perspective on what are some common missteps by entrepreneurs.
After registration of the participants, Vidhan Rana, founder of Biruwa Advisors and moderator of the event led the discussion by giving a brief background regarding the new event format and introducing the guest speakers, Sunita Nemaphuki and Abhaya Poudel. Sunita Nhemaphuki is the owner of R & D Innovative Solution Pvt. Ltd. established with the basic objective of working on agriculture sector like trainings, researches, consultation, communication, web development and commercial farmings. Ms. Nhemaphuki has been continuously working to inform and empower rural farming communities by disseminating information regarding agriculture through the magazine ” Krishak ra Prabidhi” and has been actively organizing networking programs between farmers, technicians and policy makers for knowledge sharing to enhance their knowledge base through “Krishi Club”. Whereas, Mr. Abhaya Poudel is founder of Biz Serve Pvt. Ltd., a company providing business advisory services and is a Partner of R P B & Associates, a Chartered Accountants firm that provides audit and consultancy services to banks, private and public companies. Mr. Poudel is also a mentor at Rock Start Impact Nepal, a business accelerator that supports entrepreneurs in raising investment and company growth.
Mr. Rana initiated the discussion by asking Ms. Nemaphuki, the steps she took when looking for investors for her company. She responded by emphasizing that documentation, accounts and legal were the three core areas she straightened out before approaching investors. Similarly, when Mr. Poudel was asked the factors that investors consider when looking for investment opportunities, Mr. Poudel reiterated that updated accounting records and compliance documents are primary things that investors look for. He differentiated between rational investors such as institutional funds and growth stage investors and irrational investors who are generally angel investors. The key difference being that the former look for high level of tax and regulatory compliance, strong governance structure, and accurate accounting records, whereas the latter care less about compliance and more about long term returns. He advised young entrepreneurs seeking for investment to reach out to Institutional or Angel Investors that are seeking long-term benefits or impact they can create in the market, rather than reaching out to investors that are looking for immediate return on investment and financial security. According to Mr. Poudel in order to target these investors, entrepreneurs need to make sure to clarify what their target market is, if their business model is scalable or not, and to present them with correct figures as angel investors do not necessarily care about profit or loss as much as they care about accuracy of records.
When asked what are some difficulties entrepreneurs face while finding investors, Ms. Nemaphuki responded that spreading the word and letting everyone know that you are actively seeking for investors, is the first step towards finding the right investor. Going to as many networking events as possible, and spreading the word about your work, what you need and even listing your name and details in related organizations are some leads to landing an investor. She even shared her personal experience about a time when sharing a post on Facebook about her investment need helped her find an investor. Both the speakers hammered on the importance of strengthening one’s networking and opportunities that references can lead to.
While discussing one of the most common mistakes entrepreneurs make while approaching an investor, both the moderator and guest speakers had a unanimous response that entrepreneurs are not aware about the right time to approach investors. Mr. Rana, shared from his own experience as a mentor to many entrepreneurs that most entrepreneurs know what service or app they are building, but are unaware of the market they are trying to serve. Mr. Poudel advised young entrepreneurs to make a small scalable model to present to investors, a prototype, a revenue model and a long-term plan before approaching an investor. When an entrepreneur has done their homework and is confident about their own business model, and can reach a breakeven level independently, then only would it be an appropriate time to apply for growth fund.
When Ms. Nemaphuki was asked how she could have best prepared her business for investment, if she could start from scratch again, she reiterated that she would work on documentation of the business, prepare a checklist, and would start by making a business plan. She highlighted that even if making a plan feels time consuming, it is a lot more time efficient and less stressful in the longer run. Additionally, Ms. Nemaphuki recommended that she would start networking, especially with investors and would start researching and understanding different types of investments including equity, loan and revolving fund investments, and the kind of investor to look out for at different stages of company growth. Mr. Poudel added that it might be wise to generate a basic model with small initial investments from friends and family to test a prototype before approaching third party investors.
After the initial round of questions the floor was open for Q&A session. One of the questions was from a young entrepreneur who was curious on how to value one’s idea and hard work when negotiating with an investor after 1-2 years of initial time investment. Mr. Poudel responded by stating that what an entrepreneur has done doesn’t have much value if s/he cannot show how much cash their business can generate in the future. He noted that Discounted Cash Flow (DCF) method and Net Assets method are used as valuation methods by investors, out of which DCF is the most common valuation technique which entails that today’s value of the business is calculated by discounting future value to present day value. Till one does not have a good revenue scheme it isn’t much productive to approach third party investors. When followed up with the question on how to sustain a living before the business generates revenue, Mr. Rana advised that since it takes time to test one’s ideas, especially in Nepal’s business environment, it might be a good idea to have an alternative cash flow, while working on one’s own business idea. Ms. Nemaphuki added that it is necessary to anticipate at least 3 months of expenses one might incur, and identify an income stream to cover these expenses, in order to be less stressed during one’s entrepreneurial journey.
After the Q&A session with the participants, the moderator opened the floor for open networking and asking the participants to connect with at least one individual they haven’t met before. The participants engaged in casual conversations with each other over coffee and also got the chance to ask further questions to the resource persons.
Overall, the event was successful and attracted a wide range of audience from different backgrounds. The turnout was better than anticipated, considering it was the first event held under the new format and participants seemed to be leaving the event with some insightful information and at least one new friend.