Mastering Fundraising: Insights from Shalini Chhabra, 3i Partners Managing Partner.
Shalini Chhabra, Managing Partner at 3i Partners and NSRCEL mentor, spoke to Channeliam.com about the dynamics of fundraising and the importance of finding product-market fit before seeking external funding. In her discussion, she highlighted the experiences of various brands, some succeeding and others facing challenges, to emphasise the significance of understanding the timing and nature of fundraising.
Chhabra emphasised that many brands, especially those that grew large but are now on a downtrend, often faced issues because they pursued fundraising before finding their product-market fit. She explained that taking a step back and allowing demand to naturally come to the product can provide valuable insights into its market potential. This realisation often occurs years later when entrepreneurs reflect on their journey and acknowledge the pivotal time when they recognized the product’s winning position in the market. Chhabra stressed that having a demand-led product, rather than one reliant on discounts, is critical for long-term success.
However, Chhabra noted that there are exceptions for deep tech and R&D-driven enterprises where fundraising may occur before generating revenues. In most cases, she advised that fundraising should ideally come after the first revenues, indicating the viability of the business model.
Moving forward, Chhabra discussed the journey of fundraising, starting with the importance of having some initial capital from the entrepreneur’s own resources. By having “skin in the game,” entrepreneurs demonstrate their commitment and dedication to the venture. She also mentioned the availability of grants at the state and central levels, as well as through incubators like NSRCEL, which can provide support during the early stages of product development and market validation.
Chhabra emphasized the significance of perseverance as a crucial quality for entrepreneurs. While using personal funds, grants, and contributions from friends and family, entrepreneurs build emotional connections and a sense of responsibility towards these sources of funding. This emotional drive can further fuel their motivation and determination to succeed.
In conclusion, Chhabra advised entrepreneurs to focus on finding product-market fit and generating initial revenues before seeking external funding. By understanding the evolving landscape of fundraising and leveraging available resources such as grants and personal investments, entrepreneurs can establish a strong foundation for long-term success in the dynamic business landscape of today’s India.
