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Topics - Maliha Islam

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Banks’ capital requirement eased for venture capital investments

The Bangladesh Bank has relaxed its capital requirement for banks against venture capital.

From now on, banks can maintain 100% risk-weighted capital, down from the existing 150%, against their investment in alternative investment tools.

As a result, banks will need to maintain less capital against such investments, the Bangladesh Bank said in a circular on Tuesday.

The notice will come into effect immediately and continue until September 30, 2022.

A venture capital fund is an alternative investment fund that is invested primarily in non-listed equity and equity-linked securities of startups with less than two years' operational history, or greenfield companies or emerging early-stage undertakings mainly involved in new products.

Such a policy relaxation will increase investment opportunities for banks in venture capital firms, a growing new investment platform in Bangladesh.

The lower capital maintenance will reduce the investment cost for banks, said a senior executive of the Bangladesh Bank.

Many fund managers have started to form venture capital funds but have not received an adequate response from institutional investors.

The ease in the capital requirement is expected to increase funding flows from banks, said industry insiders.


Newspaper / BB relaxes capital requirement for banks against venture capital
« on: September 30, 2020, 12:27:27 PM »
BB relaxes capital requirement for banks against venture capital

From now on, banks can maintain 100 percent risk-weighted capital, down from the existing 150 percent against their investment in alternative investment tools, as per BB circular issued today.

As per the circular, banks will need to maintain less capital against such investments.

The notice will come into effect immediately and continue until September 30, 2022.

A venture capital fund is an alternative investment fund that is invested primarily in non-listed equity and equity-linked securities of startups with less than two years’ operational history, or green field companies or emerging early-stage undertakings mainly involved in new products.


Venture Capital / The 15 steps to successfully selling a startup
« on: August 23, 2020, 12:58:00 PM »
The 15 steps to successfully selling a startup
Everything you need to know about startup acquisition.

As a product intelligence platform, the synergy between our technologies was clear, even more so as we compared several offers from companies public and private. This process, while successful, was nonetheless quite challenging at times.

Thankfully we had some great investors and advisors to guide us along the way. We came to realize acquisitions actually follow a fairly consistent process. And we wanted to now open-source a protocol for those who may be navigating their acquisition for the first time.

Step 0: Build Assets
Most acquisitions happen due to an acquirer wanting one of three assets: your team, your product, or your revenue. And if you’re lucky, all three.

Nothing compensates for building a great product. Products with unique technology command multiples. Both Oculus and Cruise were bought for billions before they went to market.

Our own product had just launched but commanded interest due to our patents in machine learning (ML). The lesson here? Build your product from the lense of “is this patentable?” because patented — the harder technology compounds in value.

But great technologies can still fail to be acquired. Acquisition decisions are made by humans, and humans make decisions based on relationships. Therefore, you should focus on building relationships with partners through technology integrations and reach competitors indirectly through the press. Our first offer came from a public company that read about our launch in the media.

The key is to be making these technology and business investments while you are building your product, and before you actually decide to sell.

Step 1: Decide to sell
The first step of an acquisition is to make the mental decision to actually sell.

Like fundraising, getting acquired is a process. It is long and grueling. Based on my experience, it takes on average six months to finish, though it can go faster depending on your pre-existing relationships in Step 0.

The process will also be taxing. Outside of a close circle of investors and advisors, you will not be able to discuss it with anyone — including your own employees — for some time.

Make sure you’re committed to seeing this through.

Step 2: Create a target list
Once you’ve made the decision to sell, the next step is to compile a list of contacts at potential acquiring companies.

Focus on those companies that could have a strategic interest in your product. Every acquisition, big or small, is predicated by an acquirer asking: “How much can I accelerate my product roadmap?” Focus on companies where you share a user, or your technology enhances theirs. Plaid was worth $5 billion to Visa, not to Google.

Include both public companies and startups on your list. Public companies offer more immediate cash, while startups typically offer more future stock. Public companies move faster once interested, given their corporate development (corp dev) teams, while startups don’t have such functions until Series D.

In either route, the key is to find the right champion. Acquisitions are made not by companies, but by humans making decisions — typically the CEO (at startups) or Director of Product (at public companies). Start with them, not corp dev.

Ask investors for referrals, or find them on LinkedIn. Our journey with Amplitude began via a serendipitous InMail from the cofounder Jeffrey, kindly congratulating us on a recent launch.

Step 3: Email outreach

With points of contact identified, it’s time to reach out. Keep your emails concise, expressing value while building urgency.

It’s a balance of enticing without divulging, considering there is no NDA in place yet (Step 5).

So start with warm intros. Email the relationships you built in Step 0. If reaching out via a second degree connection, go through your investor/advisor, and provide them with a one-paragraph1-para company brief to forward.

Again, it is very important to keep outreach tight. Do not tell friends, family, or employees (or the public). Premature internal communication can increase anxiety and halt productivity, while external communication can reduce leverage in future negotiations.

Step 4: Initial conversation
You should get a response fairly quickly if there’s interest, with an invitation to meet up.

A surprising element of the first meeting is you don’t actually need a pitch deck. This is a conversation, not a pitch. Your goal is to build a rapport over shared values and vision.

We always had our first meetings over brunch or dinner. Keep the conversation organic, but try to cover the following topics:

    Personal – Share your individual backgrounds, while emphasizing domain expertise
    Vision – Express your vision for the market, and ask for the acquirer’s vision
    Product – Describe your product, in the context of the acquirer’s vision
    Brainstorm – Ideate with the acquirer on synergies between your products
You really want the acquirer to come out feeling that you have the technology and expertise to accelerate their product roadmap.

If it feels more like brainstorming and not talking, or play and not work, you’ll know it’s going well.

Over dinner with Amplitude’s CEO Spenser, we probably spent as much time discussing Nobel Peace Prize winners as we did discussing analytics.

Step 5: NDA
If there’s interest the acquirer will ask to dive deeper into your technology and business. They’ll also loop in corp dev to facilitate. Before proceeding though, you need to ask for an NDA.

This is important to protect the confidentiality of any information you share. Specifically, an NDA will enable you to request the deletion of any information from the companies that don’t acquire you. All companies are willing to sign for this reason, as it’s in their own best interest.

Going forward, make sure all future correspondence, documents, and presentations have a “CONFIDENTIAL” disclaimer.

Step 6: Technical deep dive
With an NDA signed, the acquirer’s CTO or head of engineering will kick-off two sets of meetings: a product demo and architecture overview.

The product demo is standard fare. Describe who the user is, what problem they have, and how your app solves it. If you can, sprinkle in anecdotes how your product enhances the acquirers’.

The architecture overview should mirror the product demo. Describe the systems, languages, and data flow at each step of your app. The acquirer will assess for quality and scalability, ultimately trying to determine how difficult it is to integrate your product into theirs. A whiteboard exercise is effective here, but you can send a technical doc afterward for posterity.

The key is to position your conversation in the context of “what was difficult about this to build.” You ultimately want the acquirer to take away that they need you to build this product, and cannot do so themselves.

Step 7: Business deep dive
 In parallel to Step 6, you will be asked by the CFO or head of product to provide information on your business. The type of information requested typically includes:

    Metrics – signups, customers, revenue, growth rate
    Business – fundraising history, business model, patents
    Product – features, roadmap
    Org – team bios, expertise
Here the acquirer is trying to assess your future value to their team, product, or revenue. Specifically: “How many months will this accelerate our product and hiring goals?,” and “How much additional revenue will this product bring in?”

Convey your answers in person, and make sure these points come across. Be honest and answer with integrity. The ultimate acquisition price the acquirer will offer will be a premium, from their perspective, on future revenue acceleration or cost reduction.

Also, know acquisitions are a two-way street.

Ask the acquirer about their business here, just as much as they ask about yours. Cover tech stack, roadmap, financials, challenges.

Part of what sold us on Amplitude was their thoughtfulness. When asked how we’d be integrated post-acquisition, VPs Shadi and Justin asked us instead about every engineer’s personal career goals, and constructed a new org structure in kind.

Step 8: Q&A
Not all questions asked by an acquirer need to be answered. There are a couple that seem innocuous, but can be detrimental. Namely:

“What price are you looking for, and what have others offered?”
“What is your cash balance and monthly burn?”

The first question is designed to ascertain an anchor. A company could offer you $100 million, but if you tell them you’re looking for $50 million, you’ve just anchored yourself.

And if you disclose who that offer is from, you reduce the leverage of imagination. Google is more likely to bid higher if they believe your offer is from Facebook, not from Yahoo.

We were asked this question by so many acquirers, we effectively had a script:

The second question will come in the form of requesting a cash or balance statement. The acquirer’s intent here is to gauge your runway. If they determine you have three months left, they’ll wait two months to bid when you have less leverage.

The important note here is that the acquirer doesn’t actually need all this info to make an offer. The acquisition price is a function of the future value your company can provide, not your cash on hand.

Keep the acquirer focused on that, and push back on unnecessary requests.

Step 9: Verbal offer
At this point, a company has enough information to decide if they want to make an offer.

Getting a verbal offer is understandably a hard goalpost to get past. It forces the acquirer to finally and explicitly quantify their interest. You need to convert their inertia into qualified interest. If they ask for more meetings, we’d push back with a simple reply of:

I appreciate the continued interest. Would love to continue the conversation, but feel we need clarity on the overall deal terms to proceed. This will help us know in good faith if we’re aligned, and keep us in step with the other opportunities we have.

Remain steadfast, and you’ll get a verbal offer. It’ll be high-level, conveyed by total deal value and percent allocation of cash/stock. That’s all you need to decide if you want to proceed.

Step 10: Telling the team
To get to concrete terms, the acquirer will need to interview your team. This is understandable as the intent of acquisitions is partly talent, which means you’ll have to disclose the potential deal to your team.

This is an important step. Your team joined your startup for a mission and placed their trust in you. It’s your responsibility to convey that an acquisition is the best way to fulfill that mission.

Prepare a pitch deck. Review your company’s original vision, and reframe the acquisition as the fastest path to achieving it. Share your product roadmap again, and explain how each acquirer could accelerate it. The goal is to get the team excited before they proceed to the next stage.

If possible, bring in your champion to meet the team as well. A high point for us was when Spenser and Jeffrey came in to share their founding story and ended up bonding with the engineers over a love for historical simulation games.

Step 11: Interviews
The acquiring firm will now formally interview your entire team. Their objective is to evaluate domain expertise and performance leveling, so as to inform overall deal price and compensation.

The process will typically be the same as a normal onsite interview — one behavioral, one technical, and one design element. But like a normal interview, success is mostly a function of practice.

You’ll get two weeks to prep, so use that time to help your team thoroughly review. Have regular 1:1s to check-in and assuage any anxieties as well — controlling nerves is half the battle.

As hard as it is to admit, there is no guarantee that the full team will pass their interviews with each potential acquirer the first time round. So schedule your interviews in descending order of company preference. That way by the time you interview with your first choice acquirer, your team will have had enough practice to will pass with flying colors.

Step 12: Term sheet
After the interviews, the acquirer should turn around a formal term sheet in 48 hours. The document is about 5 pages, and details one of four acquisition types

    Waive and release – a simple waiver to hire the team
    Asset purchase – an agreement to buy specific assets along with the team
    Stock purchase – an agreement to buy the company alongside the assets and team
    Merger – an agreement to formally merge both companies into one entity
Waivers are less complex, involving less paperwork and in turn less legal fees. Mergers have a more favorable tax treatment but involve greater complexity and in turn higher legal fees. Most acquisitions by consequence fall in the less complex end.

The term sheet will outline deal specifics: a) cash/stock allocation to the preferred vs. common, b) cash/stock retention packages to the employees, c) indemnity and liability periods, and d) escrow period for cash disbursement (typical is 90% at close and 10% at 12 months).

Have your legal counsel review the term sheet, so you know what to negotiate in the next step.

Step 13: Negotiation
Negotiating the term sheet will be one of the more stressful parts of the acquisition. To help navigate the process, we read ‘Getting to Yes‘ by Roger Fisher.

The idea is to not negotiate positions, but instead align interests with facts to negotiate. Ask the acquirer to walk you through which facets interest them (team, product, revenue), and what assumptions they are making to assign a value to those facets. Debate the assumptions not the positions, and use competitive offers (without disclosing names) as an anchor.

If you don’t have other offers, that’s okay — find the best alternative. If the acquirer says they value team retention, anchor compensation discussions with a higher job offer. If the acquirer says they value your SaaS revenue, propose a factual SaaS multiple of 10X for deal value. You can usually increase your offer by 20%-50%, with more flexibility the more bids you have.

You can go through two rounds of negotiation before it gets frustrating for parties. Don’t short-change your employees/investors or argue minutiae with the acquirer — you’re about to work with these people so be equitable. Startups are a long game, and reputation compounds over cash. 

Once you’re comfortable with the terms and okayed by your legal counsel, you’re good to sign!

Step 14: Due diligence
Signing the term sheet enters you into an exclusivity period. This means you can no longer engage with other buyers, while the acquirer conducts formal due diligence on your company.

The diligence stage is where the acquirer tries to validate the information you previously shared. Not dissimilar to a financing round, they’ll typically request official documents relating to:

    Legal – articles, bylaws, cap table, msas, vendor agreements
    Employees – offer letters, piia agreements, census data
    Financials – balance sheets, p&l statements, tax returns
    IP – patents, trademarks, open source code
Remember it will likely take you a couple of weeks to compile and review everything.

Step 15: Definitive agreement
Simultaneous to diligence, the acquirer will prepare the definitive agreement for the acquisition.

This document covers the same facets as the term sheet, but in 100+ pages of detail. The documents are written by external legal counsel, take weeks of revisions, and will involve frequent negotiations over legal jargon.

Fair warning — lawyers love to lengthen this stage of the process (they are billed by the hour). Be prepared and actively involved. If you can, try to find an independent third party to help weigh which clauses were worth negotiating (in our case it was Y Combinator, a shared investor).

Once you’ve agreed on all the final documents, collate them for signature. Once signed, the deal proceeds are released by wire, and the acquisition is legally bound and closed.

Congratulations, you’ve just sold your company!

But while the deal is complete, there’s still some work left to close the business. Namely, paying off liabilities and disbursing assets.

First, you need to pay off your remaining payroll and  or PTO. Next, you must close any accounts payable (to vendors) and collect any accounts receivable (from customers). Once accounts are settled you can disburse the proceeds from the acquisition, file for dissolution, and pay taxes. The combination of legal fees and taxes will total six to seven figures — so plan accordingly.

End-to-end, the entire acquisition process takes about six months. Two months to the term sheet, one month to negotiations, one month to a definitive agreement, and two months to dissolve.


Entrepreneurship / How To Prepare Yourself To Be An Entrepreneur
« on: August 10, 2020, 02:09:51 PM »
How To Prepare Yourself To Be An Entrepreneur

উদ্যোক্তা হল আজ বিশেষ করে যুবকদের মধ্যে একটি ব্যাপক গুঞ্জনীয় শব্দ ! যদিও Start-up উদ্যোক্তাদের লক্ষ লক্ষ মিলিয়ন ডলার বিনিয়োগের সংবাদ কভারেজ অত্যান্ত গ্ল্যামারাস এবং আকর্ষণীয় দেখায়। কিন্তু বেশিরভাগ লোকেরাই বুঝতেই ব্যর্থ হন যে কয়েক মিলিয়ন ডলার, ম্যাগাজিন বা সংবাদপত্রের জন্য ফটোশুট সংগ্রহ এবং গল্ফ খেলতে পারার বাইরেও উদ্যোক্তা বিষয়টি অনেক বেশি অর্থবহ। উদ্যোক্তা হচ্ছে একটি ঝুঁকিপূর্ণ খেলা এবং এ ক্ষেত্রে আপনার সফল হওয়ার চেয়ে এতে ব্যর্থ হবার সম্ভাবনাই বেশি। তবে, এর অর্থ এই নয় যে আপনার একেবারেই চেষ্টা করা উচিত নয়। আপনি কিছু করতে পারেন কিনা তা জানার সর্বোত্তম উপায়টিই হচ্ছে এটি। নীচে কয়েকটি পয়েন্ট রয়েছে যা আপনাকে উদ্যোক্তা হবার পথে এগিয়ে যাওয়ার সিদ্ধান্তটি বিবেচনা করতে সাহায্য করবে। আপনি যদি কীভাবে নিজেকে উদ্যোক্তা হওয়ার জন্য প্রস্তুত করতে হয় তা জানতে আগ্রহী হন, তবে পড়া চালিয়ে যান !
উদ্যোক্তা ও নেতৃত্ব সম্পর্কে শিক্ষা অর্জন করুন
অন্যান্য উদ্যোক্তা এবং নেতাদের সম্পর্কে জেনে রাখা গুরুত্বপূর্ণ। তাদের সাফল্য, তাদের ব্যর্থতা, তাদের ভুল, তাদের শক্তি, দুর্বলতা ইত্যাদি। এটি আপনার অনেক সময়, প্রচেষ্টা এবং সম্পদ সাশ্রয় করবে। আপনাকে তাদের জীবন থেকে শেখার এবং যেখানে যা প্রাসঙ্গিক তা বাস্তবায়ন করতে সহায়তা করবে। নিজের দ্বারা করা সমস্ত ভুল বিচার এবং ত্রুটি থেকে শিখতে অনুপ্রাণিত করবে। আপনি অন্যান্য উদ্যোক্তা এবং নেতৃত্বের বই বা নিবন্ধগুলি পড়ার মাধ্যমে, পডকাস্টগুলি শুনে, তাদের সাক্ষাৎকার এবং বক্তৃতাগুলি পড়া বা দেখে ইত্যাদি বিষয়গুলো শিখতে পারেন।
অন্য উদ্যোক্তা বা অন্য কারও Start-up এর জন্য কাজ করুন
একটি ব্যবসা শুরু করার আগে একটি Start-up চালানোর বিষয়ে প্রথম হাতে খড়ি অভিজ্ঞতা পাওয়া ভাল। এটি আপনাকে জানতে সক্ষম করবে যে, আপনি একটি Start-up চালানোর পক্ষে উপযুক্ত কিনা। একজন উদ্যোক্তা কীভাবে কাজ করে, কিভাবে প্রচেষ্টা চালায়, তার জীবনযাত্রা কেমন, সে সঠিকভাবে কাজ করে কিনা এবং সে যে ভুলগুলি করে সেগুলি জানতে একটি Start-up প্রতিষ্ঠাতা বা কোনও উদ্যোক্তার সাথে ঘনিষ্ঠভাবে কাজ করার ব্যাপারে বিবেচনা করুন। একটি Start-up এর জন্য কাজ করা আপনাকে ব্যবসায়ের বিভিন্ন দিকের কার্যকারিতা শেখার ও সম্পদের ঘাটতি নিয়ে কাজ করার সুযোগ দেবে এবং ক্লায়েন্টদের সাথে সরাসরি কাজ করার, দল ও পণ্য / পরিষেবাদি তৈরির জন্য একটি Exposour সরবরাহ করবে।
অর্থ পরিচালনা এবং বাজেট সঠিকভাবে খরচ করতে শিখুন
একজন উদ্যোক্তা হতে গেলে প্রথমত কমপক্ষে প্রথম কয়েক বছরের জন্য মিতব্যয়ী হওয়া ও অর্থ সাশ্রয়ী করতে শিখুন। আপনার কাছে যে অর্থ আছে তা পরিচালনা করতে শেখা, সঠিকভাবে অর্থ বরাদ্দ করা, বাজেট করা এবং সেই বাজেটকে ঠিক মত খরচ করা সব কিছুই অত্যান্ত গুরুত্বপূর্ণ। এই অভ্যাসটি আগে তৈরি করা থাকলে, উদ্যোক্তাদের যে কোন বিপদ বা অর্থনৈতিক টানাপোড়েন সময়ে তাদের মানসিক চাপ হ্রাস পাবে। অতঃপর তারা তাদের এই অভ্যাসকে কাজে লাগিয়ে সেই সময়টিকে মোকাবিলা করে সকল সমস্যা কাটিয়ে উঠতে সক্ষম হবে।

সমস্যা সমাধান এবং গবেষণা দক্ষতা বিকাশ

আপনি যদি কোনও সমস্যার সমাধান করেন বা বাজারে উপলভ্য যে কোনও বিকল্পের তুলনায় আপনার পণ্যে আরও দক্ষ এবং ব্যয়-কার্যকর কোন মান সংযোজন করেন তবে আপনার Start-upটি ভাল করার সম্ভাবনা বেশি। অতএব, আপনি একজন উদ্যোক্তা হিসাবে ব্যবসা শুরু করার আগে প্রথমে আপনি যে সমস্যার সমাধান করতে চাইছেন বা আপনি যে মান তৈরি করতে চলেছেন তা বিবেচনা করা গুরুত্বপূর্ণ। বাজারে বিদ্যমান সমস্যাগুলি নিয়ে গবেষণা করুন। এ ক্ষেত্রে আপনার এ বিষয়ে মনোযোগের প্রয়োজন। বর্তমান সমস্যা সমাধান, কর্মক্ষমতা বৃদ্ধি ইত্যাদি জরিপ এবং গবেষণার মাধ্যমে আপনি নিজের অভিজ্ঞতা বৃদ্ধি করতে পারেন। সমস্যা সমাধান এবং গবেষণার দক্ষতা যথাযথভাবে দৈনিক কার্যক্রম ও যে কোন পরিস্থিতিতে তাৎক্ষনিক সিদ্ধান্ত গ্রহণে অত্যান্ত সহায়তা করে। সুতরাং, ব্যবসা শুরুর আগে থেকে এই দক্ষতাগুলি ভালভাবে বিকাশ করা গুরুত্বপূর্ণ।
আপনি যা করতে চান তার জন্য গভীর ইচ্ছা এবং উদ্দেশ্য খুঁজে বের করুন
যদি আপনার ব্যবসা শুরু করার একমাত্র অনুপ্রেরণা লক্ষ লক্ষ অর্থ উপার্জন হয় তবে এটি ভাল ভাবে কাজ করবে না। উদ্যোক্তা বিষয়টি খুব কঠিন ও শুরু করার সাথে সাথে এখানে আপনাকে ক্রমাগত প্রতিযোগীতার সম্মুক্ষীণ হতে হবে। আপনাকে আপনার পণ্যের উচ্চ মান ও পরিষেবা সরবরাহ নিশ্চিত করতে হবে, কর্মসংস্থান তৈরি করতে হবে, একটি উপযুক্ত দল তৈরি করতে হবে এবং নিজেকে উক্ত দলের পাশে থেকে দলকে সকল কঠিন সময়ে অনুপ্রাণিত করতে হবে। এই সব কিছুর জন্য প্রচুর পরিশ্রম, শক্তি দরকার এবং প্রতিবারই যখন কোনও বিঘ্ন ঘটবে তখন সেখান থেকে ফিরে আসতে নিজেকে উৎসাহিত করার ক্ষমতাও প্রয়োজন। এভাবেই আপনার লক্ষ্যগুলি পূরণ করা সম্ভব যদি কেবলমাত্র আপনি উৎসাহী হন এবং আপনার কাজ গুলো সম্পন্ন করার জন্য কঠোর পরিশ্রম করেন।
সময় ব্যবস্থাপনা এবং দক্ষতা
আপনি যখন একটি Start-up চালাবেন, সময় আপনার কাছে দুর্লভ সম্পদগুলির মধ্যে একটি বলে গণ্য হবে। সুতরাং, প্রদত্ত সময়সীমায় সর্বোত্তম আউটপুট আনতে সময়কে সবচেয়ে দক্ষ পদ্ধতিতে ব্যবহার করা গুরুত্বপূর্ণ একটি ব্যাপার। এ ক্ষেত্রে আপনাকে সর্বদা ঘড়ির বিরুদ্ধে চলমান থাকতে হবে।
সম্পদ, সম্পর্ক এবং দক্ষতা অর্জনের পদ্ধতি শিখুন
একজন উদ্যোক্তা হিসাবে, আপনি প্রায় প্রতিদিন নতুন চ্যালেঞ্জিং পরিস্থিতির মুখোমুখি হবেন। এ বিষয়টি আরো জটিল হয়ে ওঠে যখন বড় বড় কর্পোরেশনগুলির মতো এই পরিস্থিতিগুলি মোকাবেলার জন্য আপনার কাছে পর্যাপ্ত সংস্থান থাকবে না। এই সময়ে, সর্বোত্তম উপায় হ'ল বাজারের সাথে আপনার সম্পর্কগুলি আরো উন্নত ও বৃদ্ধি করা। আপনি যে শিল্প এবং বাজারে উদ্যোক্তা হওয়ার পরিকল্পনা করছেন তার একটি ভাল নেটওয়ার্ক তৈরি করা গুরুত্বপূর্ণ। এটি আপনাকে এই উচ্চ প্রতিযোগিতামূলক বাজারে টিকে থাকতে ও তাদের দক্ষতা, সংস্থানসমূহ বা নেটওয়ার্কের সুযোগ দিতে সক্ষম করবে। সাধারণত ব্যবসায় বন্ধুবান্ধব থাকা ভাল।
খেলাধুলা, যোগব্যায়াম, শারীরিক অনুশীলন বা শখের জন্য এক ঘন্টা সময় থাকতে হবে
অবসর সময় কাটানো এবং শারীরিক অনুশীলন বা শখের জন্য কিছুটা সময় নেওয়া আপনার স্ট্রেসকে মুক্তি দেয় এবং আপনার মনকে নতুনভাবে জিনিসগুলিতে ফোকাস করার জন্য সতেজ করে তোলে। শারীরিক অনুশীলন, যোগব্যায়াম বা একটি শখের অভ্যাস হচ্ছে বৈজ্ঞানিকভাবে সুস্বাস্থ্য বজায় এবং চাপ, উপশম ও আত্মবিশ্বাস বাড়ানোর জন্য পরিচিত একটি উপায়। এটি সামগ্রিক ইতিবাচক একটি মেজাজ তৈরীতে সহায়তা করে যা আপনার কাজের ক্ষেত্রেও ভাল ফলাফল বয়ে আনতে পারে,61302.0.html

MakerSpace / Recycled plastic bottles, Plastic bottle crafts, and more
« on: September 03, 2019, 11:03:59 AM »
Recycled plastic bottles, Plastic bottle crafts, and more Pins popular on Pinterest

Bottle Craft

Tire Craft

Bottle Cap Craft

Tin Can Craft

Failure Story / A.P.J.Abdul kalam Inspirational lesson for lifetime
« on: May 25, 2019, 11:38:17 AM »
A.P.J.Abdul kalam Inspirational lesson for lifetime- How to manage failure and success

Investment Process / Venture Capital Investment Process
« on: May 25, 2019, 11:21:12 AM »
Venture Capital Investment Process

Features of Venture Capital investments
High Risk
Lack of Liquidity
Long term horizon
Equity participation and capital gains
Venture capital investments are made in innovative projects
Suppliers of venture capital participate in the management of the company

Methods of Venture capital financing
participating debentures
conditional loan

THE FUNDING PROCESS: Approaching a Venture Capital for funding as a Company
Venture Capital Process

The venture capital funding process typically involves four phases in the company’s development:

Idea generation
Ramp up

Step 1: Idea generation and submission of the Business Plan
The initial step in approaching a Venture Capital is to submit a business plan. The plan should include the below points:

There should be an executive summary of the business proposal
Description of the opportunity and the market potential and size
Review on the existing and expected competitive scenario
Detailed financial projections
Details of the management of the company
There is detailed analysis done of the submitted plan, by the Venture Capital to decide whether to take up the project or no.

Step 2: Introductory Meeting

Once the preliminary study is done by the VC and they find the project as per their preferences, there is a one-to-one meeting that is called for discussing the project in detail. After the meeting the VC finally decides whether or not to move forward to the due diligence stage of the process.

Step 3: Due Diligence
The due diligence phase varies depending upon the nature of the business proposal. This process involves solving of queries related to customer references, product and business strategy evaluations, management interviews, and other such exchanges of information during this time period.

Step 4: Term Sheets and Funding
If the due diligence phase is satisfactory, the VC offers a term sheet, which is a non-binding document explaining the basic terms and conditions of the investment agreement. The term sheet is generally negotiable and must be agreed upon by all parties, after which on completion of legal documents and legal due diligence, funds are made available.

Types of Venture Capital funding
The various types of venture capital are classified as per their applications at various stages of a business. The three principal types of venture capital are early stage financing, expansion financing and acquisition/buyout financing.

The venture capital funding procedure gets complete in six stages of financing corresponding to the periods of a company’s development

Seed money: Low level financing for proving and fructifying a new idea
Start-up: New firms needing funds for expenses related with marketingand product development
First-Round: Manufacturing and early sales funding
Second-Round: Operational capital given for early stage companies which are selling products, but not returning a profit
Third-Round: Also known as Mezzanine financing, this is the money for expanding a newly beneficial company
Fourth-Round: Also calledbridge financing, 4th round is proposed for financing the "going public" process

A) Early Stage Financing:
Early stage financing has three sub divisions seed financing, start up financing and first stage financing.

Seed financing is defined as a small amount that an entrepreneur receives for the purpose of being eligible for a start up loan.
Start up financing is given to companies for the purpose of finishing the development of products and services.
First Stage financing: Companies that have spent all their starting capital and need finance for beginning business activities at the full-scale are the major beneficiaries of the First Stage Financing.

B) Expansion Financing:
Expansion financing may be categorized into second-stage financing, bridge financing and third stage financing or mezzanine financing.

Second-stage financing is provided to companies for the purpose of beginning their expansion. It is also known as mezzanine financing. It is provided for the purpose of assisting a particular company to expand in a major way. Bridge financing may be provided as a short term interest only finance option as well as a form of monetary assistance to companies that employ the Initial Public Offers as a major business strategy.

C) Acquisition or Buyout Financing:
Acquisition or buyout financing is categorized into acquisition finance and management or leveraged buyout financing. Acquisition financing assists a company to acquire certain parts or an entire company. Management or leveraged buyout financing helps a particular management group to obtain a particular product of another company.

Advantages of Venture Capital
They bring wealth and expertise to the company
Large sum of equity finance can be provided
The business does not stand the obligation to repay the money
In addition to capital, it provides valuable information, resources, technical assistance to make a business successful
Disadvantages of Venture Capital
As the investors become part owners, the autonomy and control of the founder is lost
It is a lengthy and complex process
It is an uncertain form of financing
Benefit from such financing can be realized in long run only
Exit route
There are various exit options for Venture Capital to cash out their investment:

Promoter buyback
Mergers and Acquisitions
Sale to other strategic investor

Examples of venture capital funding
Kohlberg Kravis & Roberts (KKR), one of the top-tier alternative investment asset managers in the world, has entered into a definitive agreement to invest USD150 million (Rs 962crore) in Mumbai-based listed polyester maker JBF Industries Ltd. The firm will acquire 20% stake in JBF Industries and will also invest in zero-coupon compulsorily convertible preference shares with 14.5% voting rights in its Singapore-based wholly owned subsidiary JBF Global Pte Ltd. The fundingprovided by KKR will help JBF complete the ongoing projects., India’s largest furniture e-marketplace, has raised USD100 million in a fresh round of funding led by Goldman Sachs and Zodius Technology Fund. Pepperfry will use the fundsto expand its footprint in Tier III and Tier IV cities by adding to its growing fleet of delivery vehicles. It will also open new distribution centres and expand its carpenter and assembly service network. This is the largest quantum of investmentraised by a sector focused e-commerce player in India.


Low-Cost Business Ideas You Can Launch This Weekend

Starting and successfully growing a business is, without exception, a difficult endeavor. Most seasoned entrepreneurs will tell you that building a company from the ground up is one of the most trying, yet rewarding, experiences of their lives. Starting a business takes so much more than just a great idea. You need a winning combination of great opportunities, determination, passion, time, and, for most businesses, a bit of funding to get your idea off the ground.

Today, we're focusing on 12 low-cost business ideas that you can get started on (and start seeing results from) in as little as just a couple of days. Many are business ideas you can start while you're still working at your day job.

Start a Niche Website

Picking a hyper-specific topic that has proven search volume (you can check Google monthly average search volume for specific terms using the Keyword Planner Tool) will give you the opportunity to become an authority in a relatively small space if you can create a lot of value for the existing audience.

If you start generating highly valuable blog content, videos, images, or other engaging pieces of content around a topic like camping with babies, and can slowly build up your regular audience, this authority placement will afford you many different monetization opportunities. From affiliate sales to ad revenue, sponsored content, and paid partnerships with well-known brands, you can start generating revenue as soon as you have a steady flow of traffic coming to your site.

Launch an Online Course

Are you an expert in a specific domain? If so, there's an audience of people who'd be willing to pay you for an accelerated learning experience that'll get them up to your level of expertise.

You could be a writer, marketer, designer, or even a nurse, technician, or in retail sales. Whatever your experience is, there's a way to teach others how to become more successful, make more money, get started quicker, or advance in their careers within your niche. Once you've chosen your topic, easy-to-use online course platforms like Teachable and Udemy can get your course business off the ground in a matter of hours.

Sell Digital Downloads

Creating and selling digital downloads like ebooks, in-depth guides, templates, and case studies, is an incredibly great way to generate relatively passive income online.

Once you create a piece of useful content that'll help an online audience accomplish something within their lives or businesses, it's just a matter of getting your digital goods in front of that group of people. You'll want a basic website in place so that you have a destination to bring in targeted traffic with related blog content and other useful information about what your digital download is going to help them accomplish.

Start a Podcast

Recently, podcasts have become increasingly lucrative as a source of sustainable income. If you create a podcast on a specific topic, such as launching startups like, and you interview well-known figures in the industry, you'll quickly amass a high number of regular listeners—if you learn how to market it well.

Once you've grown your listenership to a reasonable level (shoot for at least a thousand listeners per episode), you can start bringing on some premium sponsorships. It's not uncommon to charge $2,000+ per month to established sponsors to get their product or service message in front of your targeted audience.

Become an Online Coach

Again, if you have a marketable skill set that you're passionate about, you can offer your coaching services in a one-on-one style setting.

Tools like and offer you the opportunity to quickly hop on and offer online coaching sessions at your pre-determined hourly (or by the minute) rate. What's more, these communities already have a built-in user base of people seeking career guidance, life coaching, and actionable learnings on how to clear their obstacles.

Fulfilled by Amazon Clearance Arbitrage

Amazon FBA clearance arbitrage is the practice of scouting out goods that are currently selling on Amazon (with the "fulfilled by Amazon" designation) and tracking down those items at a lower cost from stores in your local area.

It's surprisingly easy, and Nick Loper of SideHustleNation has been experiencing a good amount of success with it over the last year. Check out his detailed breakdown of how he does this. There's even a scanning app for smartphones that'll let you instantly detect the clearance arbitrage opportunities while you're going through local stores.

Remote English Tutor

Teaching English as a Second Language (ESL) can be a very lucrative side business, and it takes absolutely nothing to get started, aside from access to a computer with video chat abilities (and Skype).

If you're a native English speaker, there are countless people in foreign countries who are willing to pay $25/hr or more for you to teach them English via video chat platforms like Skype or FaceTime. Indeed frequently has job postings up, requesting remote English teachers and tutors.

Start Freelancing Within Your Industry

Just about every job can be done on a freelance (even remote) basis in today's digital world. What's even better is that you can start a freelance business while you keep your day job.

From writing to editing, graphic design, marketing, video production, business consulting, and more, there are tons of great websites that regularly feature highly paid freelance gigs. Start with looking around for industry-specific forums and contract job posting boards, as those will always have more engagement, but sites like LinkedIn's ProFinder, Upwork, and are great starting points for bringing on your first clients as well.

Launch a Photography Business

It's relatively inexpensive ($60–$150) to rent even a very nice DSLR camera from a local camera shop for the weekend. If you take some time to practice and learn techniques from pro photographers online, you should be able to pick up the basics fairly quickly. From there, you can get into portrait photography, very lucrative wedding photography, and even specialize in something as niche as newborn photography, all with great scalability potential if you live in a decently populated area.

Once you've learned how to navigate your camera (or smartphone camera), you can very easily start monetizing your skills. From selling prints to doing commercial and private client shoots, building up a large following on social networks like Instagram and Facebook, teaching online photography courses, doing in-person workshops, and selling your advice, the opportunities are limitless.

You can even start a profitable blog, sharing your skills with others online. Let's say you have a knack for capturing incredible star trail photographs at night. Meanwhile, thousands of people are searching each month on Google, wanting to learn how to take star trail photographs. Your blog content, video tutorials, and an online course they can purchase is a fantastic way to generate online income with this skill.

Refurbish Used Electronics and Resell Online

We've all seen the advertisements offering to purchase our old (or even damaged) smartphones at low prices. These opportunistic entrepreneurs are putting their technical skills to use fixing up these electronics and reselling them either in-person or online (often to customers internationally).

There's a huge market for expensive gadgets like iPhones in many foreign countries, and consumers in those countries without the ability to purchase directly from Apple, turn to eBay, Amazon, and other online retail destinations where they pay above-retail prices to get their hands on the tech goods they want. If you can start buying up and fixing damaged iPhones locally, you could net a healthy profit by later flipping them online.

Become a Tour Guide

Do you live somewhere with frequent travelers? If you love meeting new people from around the world and have an in-depth knowledge of the area you live in, then starting your own local tour business could be a great opportunity that needs little more than a clean vehicle and cheerful demeanor.

Learn from Erik at Vantigo on how he started a VW van tour company in the San Francisco Bay area while he kept his day job, and grew it into a sustainable full-time source of income for himself.

Start a YouTube Channel

There are many YouTube users generating a healthy income from ads on their regular videos. Some of them even make well into the millions each year.

All it takes to build a healthy YouTube following is to identify high search volume topics, develop your own unique spin on creating video content, and learn how to engage well with your audience. From there, you'll be able to start implementing ads on your videos and, if you want to take it a step further, you can launch your own website, which gives you even more monetization opportunities.


Startup / Top 20 Startup Pitch Competitions You Must Join in 2018
« on: February 24, 2019, 12:59:32 PM »
Top 20 Startup Pitch Competitions You Must Join in 2018

Ask any entrepreneur what the most challenging thing about launching a startup is, and chances are they’ll tell you the same thing: funding.

Indeed, raising the capital you need to get your startup off the ground is time-consuming, challenging, and frustrating. Since you’re new, not many investors have heard about you. Even if you believe that your startup is going to be the next best thing sliced bread, you’ll need to put out all the stops just to convince one investor to believe in you, and write that check to give you the funds you’ll need to get your startup off the ground.

It’s for this reason why most startup founders choose to compete in startup pitch competition. In these events, the winner receives a cash prize that they can use towards scaling their startup.

But that’s just the tip of the iceberg because even if you don’t win the grand prize, joining a startup pitch competition offers a lot of benefits and perks for you and your startup.

Pitch to multiple investors
Instead of just pitching to one group of investors at a time, startup pitch competition gives you the opportunity to pitch your startup to tens—if not, hundreds—of venture capital firms and angel investors. That means that even if you don’t win the grand prize, there’s sure to be a couple of investors in the audience that sees your vision, and will be willing to help you realize this, so you don’t go home empty-handed.

Build strategic partnerships
It’s not just investors that you’ll get to meet in startup pitch competitions. You’ll also have the chance to meet other startup founders that you can connect, share ideas with, ask questions, and may even collaborate within the near future.

Valuable media exposure
When your startup gets chosen as a finalist, you immediately share in the media exposure the pitch competition gets as the organizers of the contest promote this event to investors and other entrepreneurs. On top of that, many reputable websites cover these events, focusing their attention on the different startups competing in the event.

Receiving expert feedback
More important than the few minutes you’re given to pitch your business is the time when the panel of judges of the startup pitch competition gives their feedback about your startup. That’s because they will help you see potential gaps in your startup that can lead to expensive mistakes and heartaches in the future. Their feedback will give you the chance to address these gaps so that you minimize—if not, remove completely—these unwanted instances to occur.

How to dominate any of the top startup pitch competitions
Whether or not you win the grand prize in a top startup pitch competition, joining one can help build momentum for your business. But let’s face it: standing in front of a couple of investors to pitch your business can be nerve-wracking, let alone an auditorium full of venture capital firm representatives and angel investors. Having only a few seconds to say everything you want to say just amps up the pressure.

Preparation is vital when it comes to preparing your pitch. Here are some tips to help you craft a pitch that will help you wow the audience, and increase your chances of winning the grand prize.

Do your research
Startup pitch competitions vary in their time limits, type of presentation, and criteria for judging. So make sure that you do your homework. Take some time to also go through the previous winners. Look for common characteristics they share. These are clues to help you craft your pitch so that it fits exactly what the judges are looking for, and increase your chances of taking home the grand prize.

Some accelerators and incubators host their own startup pitch competitions exclusive to those that were accepted in their startup accelerator programs. That said, take some time to check if the accelerator program you want to join offers this.

Hook them early
Even though a startup pitch competition gives you anywhere between a minute and five minutes to convince the judges, the first eight seconds are the most critical. That’s because that’s the average time that you have to make an impact on the judges and audience to get them hooked and to keep them listening to your pitch.

That said, it’s essential to make it a point to capture the judges and the rest of the audience in your intro. One way to do this is by pretending that you’re explaining your business to a 5-year-old. Not only will this help you make sure that you get straight to the point, but also choose the kinds of words you use more carefully.

This was the case with Airbnb. As you can see in their pitch deck below, they managed to tell the whole story about who they are, the problem they’re aiming to solve, and how they intend to answer it within the first two slides of their presentation.


Credit Rating / 5 Extreme Ways To Raise Your Credit Score
« on: February 18, 2019, 01:47:22 PM »
5 Extreme Ways To Raise Your Credit Score

Is your low credit score preventing you from getting a good interest rate or from getting a credit card or a loan at all? Are you tired of waiting through the long and slow process of rebuilding your credit the conventional way? If so, you might be considering some extreme steps to improve your credit score. Let's consider a few of the options available, whether they actually work and if they're advisable.

1. Rapid Rescoring

Rapid rescoring is a little-known strategy explained by credit guru Liz Pulliam Weston in her book, "Your Credit Score: Your Money and What's at Stake". Unlike credit repair services, which are almost always a scam, rapid rescoring is a legitimate way to improve your credit score in as little as a few hours - if there are verifiable inaccuracies on your credit report. For rapid rescoring to work, you must have proof that negative items on your credit report are incorrect.

Rapid rescoring is for people who are in the process of applying for a mortgage or other type of loan and, because of their low credit scores, are being denied credit or are being offered a high interest rate. Individuals cannot initiate rapid rescoring on their own, but a lender can do it on their behalf. The rapid rescoring service works with credit bureaus to quickly remove incorrect information from your report.

Because of the complicated way credit scores are calculated, even if you are successful in having the inaccurate, negative information removed, your score may not improve, may improve less than you'd hoped, or may even drop. But it's worth a shot.

2. Take out a Loan for a Major Purchase

According to Ken Lin, CEO of Credit Karma, "if you are within your means and in the right credit range, a car loan or mortgage is actually a great thing for your credit. Though the initial hard inquiry will knock a few points off your score, adding to your mix of credit is an important component of your score."

The credit scoring company FICO states that about 10% of your credit score is based on the mix of credit types you use. Its booklet, "Understanding Your FICO Score," states, "The score will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. It is not necessary to have one of each, and it is not a good idea to open credit accounts you don't intend to use. The credit mix usually won't be a key factor in determining your FICO score - but it will be more important if your credit report does not have a lot of other information on which to base a score."

3. Open Lots of New Credit Card Accounts

Obtaining additional credit cards increases your total available credit. Since credit utilization, or the percentage of your available credit that you have spent, is part of your score, it seems like lowering that percentage by increasing your total available credit would help your credit score. However, FICO states, "This approach could backfire and actually lower your credit score."

For one, opening lots of new accounts shortens the average age of your accounts, and a lower average age will generally lower your credit score.

Another problem, Lin points out, is that "available credit in your reach may tempt to you to overspend into debt, or on the flip side, not using your open credit cards may cause your issuer to close your card due to inactivity. A better strategy is to add to your existing cards' credit limits, and pay down existing debt while putting a freeze on credit card spending."

4. Take Out a Small Loan You Don't Need

If your credit score is preventing you from getting the interest rate you want, you may be able to improve your score by taking out a small loan and repaying it as promised - in other words, by adding some positive activity to your credit history. Also, because installment loans add to your mix of credit, if your credit history doesn't already include this type of loan, obtaining one might improve your score.

One option is to use a peer-to-peer service like LendingClub, which facilitates lending between individuals. The company reports borrowers' payment histories to credit bureaus, so if you can borrow money and repay it responsibly, using a service like this can help you rebuild your credit score. The minimum loan amount is $1,000 and you must have a credit score of at least 660 to apply.

Though this strategy may work, it's not necessarily a good idea. Lin calls it "a risky and costly way to raise your credit score because you'll have to pay for the loan's interest."

5. Use Retirement Accounts to Pay off Debts

Do you have piles of cash sitting around in a 401(k) or IRA that would wipe out your debt? It may be tempting to use these accounts for just such a purpose, and technically, you could.

But there are compelling reasons why you shouldn't. If you ever have to declare bankruptcy, retirement accounts are often protected, so they're a great source of long-term financial security. In the short term, you're likely to be faced with early withdrawal penalties and taxes if you take money out of these accounts. Those expenses could get you into an even bigger debt mess.


Credit Rating / Credit Rating in India
« on: February 18, 2019, 01:43:37 PM »
Credit Rating in India

If we talk about an ideal world, everyone would have enough money to take care of their needs. However, facing the reality, most of us have little option but to take credit to meet our life goals, especially the ones involving a huge amount like taking a car, home, etc. To making borrowing money from bank easier, it is important to have a good credit history which is determined by not only the credit score but also the credit rating.

Credit Rating – Meaning & Functions
Credit Rating is an assessment of the borrower (be it an individual, group or company) that determines whether the borrower will be able to pay the loan back on time, as per the loan agreement.  Needless to say, a good credit rating depicts a good history of paying loans on time in the past. This credit rating influences the bank’s decision of approving your loan application at a considerate rate of interest.

It is usually expressed in alphabetical symbols. Although, it is a new concept in Indian financial market but slowly its popularity has increased. It helps investors to recognize the risk involved in lending the money and gives a fair assessment of the borrower’s creditability.

Importance of Credit Rating
Here are the benefits of credit rating:

For The Money Lenders

Better Investment Decision: No bank or money lender companies would like to give money to a risky customer. With credit rating, they get an idea about the credit worthiness of an individual or company (who is borrowing the money) and the risk factor attached with them. By evaluating this, they can make a better investment decision.
Safety Assured: High credit rating means an assurance about the safety of the money and that it will be paid back with interest on time.
For Borrowers

Easy Loan Approval: With high credit rating, you will be seen as low/no risk customer. Therefore, banks will approve your loan application easily.
Considerate Rate of Interest: You must be aware of the fact every bank offers loan at a particular range of interest rates. One of the major factors that determine the rate of interest on the loan you take is your credit history. Higher the credit rating, lower will the rate of interest.

How do Credit Ratings Work in India?
As a matter of fact, every credit rating agency has their algorithm to evaluate the credit rating. However, the major factors are credit history, credit type and duration, credit utilization, credit exposure, etc. Every month, these credit rating agencies collect credit information from partner banks and other financial institutions. Once the request for credit rating has been made, these agencies dig out the information and prepare a report based on such factors. Based on that report, they grade every individual or company and give them a credit rating. This rating is used by banks, financial institutions and investors to make a decision of investing money, buying bonds or giving loan or credit card. The better is the rating, more are the chances of getting money at payable interest rates.

Credit Rating Agencies in India
Credit rating agency is an organization that evaluates the credit worthiness of an individual, business or company who wishes to borrow money or apply for a credit card in the bank. Let’s have a look at the credit agencies in India.


Credit Rating Information Services of India Limited is the first credit rating agency of the country which was established in 1987. It calculates the credit worthiness of companies based on their strengths, market share, market reputation and board. It also rates companies, banks and organizations, helping investors make a better decision before investing in companies’ bonds. It offers 8 types of credit rating which are as follows:

AAA, AA, A – Good Credit Rating
BBB, BB – Average Credit Rating
B, C, D – Low Credit Rating

Investment Information and Credit Rating Agency of India was formed in 1991 and is headquartered in Mumbai. It offers comprehensive ratings to corporates via a transparent rating system. Its rating system includes symbols which vary with the financial instruments. Here are the types of credit ratings offered by ICRA:

Bank Loan Credit Rating
Corporate Debt Rating
Corporate Governance Rating
Financial Sector Rating
Issuer Rating
Infrastructure Sector Rating
Insurance Sector Rating
Mutual Fund Rating
Public Finance Rating
Project Finance Rating
Structured Finance Rating
SME Rating
Credit Score affects your Loan & Credit Card Eligibility


Credit Analysis and Research Limited (CARE) offers a range of credit rating services in areas like debt, bank loan, corporate governance, recovery, financial sector and more. Its rating scale includes two categories – long term debt instruments and short term debt ratings.


Onida Individual Credit Rating Agency of India established in 1993 which offers credit assessment and credit scoring services to both individuals and businesses. Along with this, it also offers risk assessment reports to individuals, small and medium businesses and corporates. Its ratings are based on two factors – Financial Strength and Performance Capability.


Small Medium Enterprises Rating Agency Of India Limited has two divisions – SME Ratings and Bond Ratings. It was established in 2011 and is a hub of financial professionals. It offers credit ratings in the following format:

AAA, AA, A – Low Credit Risk
BBB, BB – Moderate Credit Risk
B, C – High Credit Risk
D- Defaulted
Brickwork Ratings India Private Limited

Headquartered in Bangalore, this credit rating agency is responsible to rate bank loans, municipal corporation, capital market instrument and SMEs. Other than this, it is also responsible to grade real estate investments, hospitals, NGOs, MFI, etc. It offers various rating system depending upon the different financial instrument.

So, What’s the Difference Between Credit Rating and Credit Score?
Often, these two terms are interchanged but they are not exactly same. Here are the differences between the two:

Credit Rating is basically a credit worthiness of a business or a company. However, it is not really used to individuals like us. It gives an understanding the ability of the company. These ratings are based on corporate financial instruments and usually denoted in alphabetical symbols. Higher the rating, lower is the probability of default pays.

Whereas credit score is a number, calculated by credit bureau and given to individuals based on the credit information report. This number can be in between 300 and 900. Credit report plays an important role in loan and credit card approval process.


Credit Rating / What are the Benefits of Credit Ratings?
« on: February 18, 2019, 01:39:33 PM »
What are the Benefits of Credit Ratings?

Credit ratings are an important tool for borrowers to gain access to loans and credit cards. Good credit ratings allow people to easily borrow money from financial institutions or public debt markets. At the consumer level, banks will usually base the terms of a loan as a function of your credit rating; this means that the better your credit rating, the better the terms of the loan typically are. If your credit rating is poor, the bank may even reject you for a loan.

At the corporate level, it is usually in the best interest of a company to look for a credit rating agency to rate its debt. Investors often times base part of their decision to buy a corporation's bonds, or even the stock, on the credit rating of the company's debt. Major credit agencies, such as Moody's or Standard and Poor's, perform this rating service for a fee. Usually, investors will look at the credit rating given by these international agencies as well as ratings given by domestic rating agencies before deciding to invest. (Learn more in "A Brief History of Credit Rating Agencies.")

Credit ratings are also important at the country level. Many countries rely on foreign investors to purchase their debt, and these investors rely heavily on the credit ratings given by the credit rating agencies. The benefits for a country of a good credit rating include being able to access funds from outside their country, and the possession of a good rating can attract other forms of financing to a country, such as foreign direct investment. For instance, a company looking to open a factory in a particular country may first look at the country's credit rating to assess its stability before deciding to invest.


Credit Rating / Tips to Improve or Maintain a High Credit Score
« on: February 18, 2019, 01:38:20 PM »
Tips to Improve or Maintain a High Credit Score

If you have great credit, one slip up can create a major hurdle for you in the future. So it's important to stay on top of things and keep your credit score as high as possible. And just because you may have bad credit now, doesn't mean you have to live with that for the rest of your life. You can improve your score, and therefore, your credit future. Here are some ways you can improve or maintain your score:

Make loan payments on time and for the correct amount.
Avoid overextending your credit. Unsolicited credit cards that arrive by mail may be tempting to use, but they won't help your credit score.
Never ignore overdue bills. If you encounter any problems repaying your debt, call your creditor to make repayment arrangements. If you tell them you are having difficulty, they may be flexible.
Be aware of what type of credit you have. Credit from financing companies can negatively affect your score.
Keep your outstanding debt as low as you can. Continually extending your credit close to your limit is viewed poorly.
Limit your number of credit applications. When your credit report is looked at, or "hit," it is viewed as a bad thing. Not all hits are viewed negatively (such as those for monitoring of accounts, or prescreens), but most are.
Credit is not built overnight. It's better to provide creditors with a longer historical time frame to review: a longer history of good credit is favored over a shorter period of good history.

The Bottom Line
The importance of credit today is significant. Overlooking this fact can be very detrimental to your financial health. Being aware of how your credit score is calculated is essential. By following the tips laid out above, you should be able to either maintain or improve your credit score. Now that you understand the importance of your credit score, here are some of the major sites you can visit to check your credit rating:

Trans Union:


Credit Rating / The Importance of Your Credit Rating
« on: February 18, 2019, 01:36:22 PM »
The Importance of Your Credit Rating

People have become increasingly dependent on credit. Therefore, it's crucial that you understand personal credit reports and your credit rating or score. Here we explore what a credit score is, how it is determined, why it is important and, finally, some tips to acquire and maintain good credit.

Credit Rating Basics
When you use credit, you are borrowing money that you promise to pay back within a specified period of time. A credit score is a statistical method to determine the likelihood of an individual paying back the money he or she has borrowed.

The credit bureaus that issue these scores have different evaluation systems, each based on different factors. Some may take into consideration only the information contained in your credit report, which we look at below. The primary factors used to calculate an individual's credit score are his or her credit payment history, current debts, time length of credit history, credit mix and frequency of applications for new credit. Because the scoring systems are based on different criteria which are weighted differently, the three major credit bureaus in the U.S. (Equifax, TransUnion, and Experian) may issue different scores for an individual, even though the scores are based on the same information.

You may hear the term FICO score in reference to your credit score — the terms are essentially synonymous. FICO is an acronym for the Fair Isaac Corporation, the creator of the software used to calculate credit scores.

Scores range between 350 (extremely high risk) and 850 (extremely low risk). Here is a breakdown of the distribution of scores for the American population in 2003:

There is another scoring method, called the VantageScore. This system was created in 2006 and is weighted differently than the FICO score. Through this method, the average of a consumer's available credit, recent credit, payment history, credit utilization, depth of credit and credit balances are considered, with the biggest weight given to payment history and credit utilization. The VantageScore range runs between 501 and 990. Anyone under 630 is deemed to have poor credit. A score between 630 and 690 is considered fair, while 690 to 720 is considered good. A score above 720 is considered excellent. There are an increasing amount of creditors who are using this method. However, it still isn't nearly as popular as the FICO system.

Credit Rating System
In addition to using credit (FICO and VantageScore) scores, most countries (including the U.S. and Canada) use a scale of 0-9 to rate your personal credit. On this scale, each number is preceded by one of two letters: "I" signifies installment credit (like home or auto financing), and "R" stands for revolving credit (such as a credit card).

What Makes Up Your Credit Score?
When you borrow money, your lender sends information to a credit bureau which details, in the form of a credit report, how well you handled your debt. From the information in the credit report, the bureau determines a credit score based on five major factors: 

Previous credit performance
Current level of indebtedness
Time credit has been in use
Types of credit available
Pursuit of new credit
Although all these factors are included in credit score calculations, they are not given equal weighting. The breakdown is as follows: 35% for payment histories; 30% for the amounts owed, or current debt level; 15% for the total length of credit history; 10% for any new credit; and 10% for the type of credit mix.

As per the formula, your credit rating is most affected by your historical propensity for paying off your debt. Although there are many ways you can improve your credit score, the factor that can boost your credit rating the most is having a past that shows you pay off your debts fairly quickly. Additionally, maintaining low levels of indebtedness (or not keeping huge balances on your credit cards or other lines of credit), having a long credit history, and refraining from constantly applying for additional credit will all help your credit score.

Although we would love to explain the exact formula for calculating the credit score, the Federal Trade Commission has a secretive approach to this formula.

Why Your Credit Rating Is Important
When you apply for a credit card, mortgage or even a phone hookup, your credit rating is checked. Credit reporting makes it possible for stores to accept checks, for banks to issue credit or debit cards and for corporations to manage their operations. Depending on your credit score, lenders will determine what risk you pose to them.

According to financial theory, increased credit risk means that a risk premium must be added to the price at which money is borrowed. Basically, if you have a poor credit score, lenders may not shun you (unless it is utterly awful); instead, they'll lend you money at a higher rate than the one paid by someone with a better credit score. The table below shows how individuals with varying credit scores will pay dramatically different interest rates on similar mortgage amounts — the difference in interest, in turn, has a large impact on the monthly payments (which pay off both interest and principal). As you can see, your credit score can affect your mortgage in many ways:

Credit Is a Fragile Thing
Being aware of your credit and your credit score is very important, especially since you can harm your credit without even being aware of it. Here's a true story of what can happen:

Paul applied for a travel reward miles card but never received any response from the credit card company. Since it was a high-limit travel card, Paul just assumed that he'd been declined and never thought about it again. More than a year later, Paul goes to the bank to inquire about a mortgage. The people at the bank pull up Paul's credit report and find a bad debt from the credit card company. According to the credit report, the company tried to collect for a year but recently wrote it off as a bad debt, reporting it as an R9, the worst score you can get. Of course, all of this is news to Paul.

Well, it turns out there was a clerical error, and Paul's apartment suite number was missing from the address the credit card company had on file. Paul had been approved for the card but never actually received it, and any subsequent correspondence didn't get through either.

So the credit card company still charged Paul the annual fee, which he didn't pay, because he didn't know the debt existed. The annual fee collected interest for a year until the credit card company wrote it off. In the end, after jumping through several fiery hoops, Paul was able to get the problem rectified, and the card company admitted fault and notified the credit-reporting agency.

The point is, even though it was a small balance due (about $150), the administration error almost got in the way of Paul getting a mortgage. Nowadays, since all data goes through computers, incorrect information can easily get onto your credit report.


Credit Rating / What is credit rating and how important is it.
« on: February 18, 2019, 01:30:31 PM »
What is credit rating and how important is it while making an investment decision?

This week, rating agencies, ICRA and India Ratings and Research, downgraded IL&FS's non-convertible debentures (NCDs) and long-term loans. The downgrade has had a ripple effect - share prices of its group companies dropped, concerns are now growing about the future of the company, and it has come to light that many debt mutual fund schemes have exposure to the company.

This is not the first time a downgrade in credit ratings of a company has had widespread ramifications. In 2015, Amtek Auto was downgraded, a fall out of which was that JP Morgan Mutual Fund faced rough weather in the following months. And in 2017, credit rating agencies downgraded bonds of IDBI Bank and Reliance Communications, which led to the share prices of both companies tanking.

Credit ratings are an important parameter to consider while investing be it in fixed deposits (FDs), company deposits, NCDs or other investments. For equity, initial public offerings of shares are also rated.

What are the credit ratings?
Credit rating is an analysis of the credit risks associated with a financial instrument or a financial entity. A rating is assigned to an instrument by a credit rating agency after a comprehensive analysis of business risks, financial risks, management quality and ability to service debt.

It is a detailed report based on the financial history of borrowing or lending and creditworthiness. It helps in assessing the solvency of the entity. These ratings are assigned by credit rating agencies such as CARE Ratings, CRISIL, ICRA, India Ratings, and Research etc.

How important is credit rating?

A rating downgrade essentially means that the company's ability to service/repay that particular financial instrument has declined which in turn hampers the company's ability to borrow further. Lenders may hesitate lending to such companies and may not even roll-over (refinance) existing debt.

For instance, when selecting a company deposit to invest in, you should go for one with a high credit rating. If investing in company deposits, it is advisable to go for a deposit with a rating of AAA or at least AA, nothing lower. And if the credit rating of your deposit falls after you have invested in it, it is advisable to get out even if it means you have to pay a penalty for premature withdrawal.

If the debt mutual fund scheme you have invested in holds a security whose rating has been downgraded, the immediate fallout will be that the NAV of the scheme will be negatively impacted. However, the quantum of the impact will depend on the percentage of of that particular security in the scheme's portfolio. Obviously, the higher the exposure to the downgraded security, the stronger the negative impact on the scheme's NAV.

However, one should not base one's investment decision solely on the credit rating of an instrument or company. This is because ratings are not constant and, there is every possibility that it can change during your investment period. Credit rating should be used as one of the parameters in your decision.

Credit rating scale
There are a few important credit rating agencies companies approach to get rated. These include CRISIL, CARE Ratings, ICRA, India Ratings and Research, and BrickWorks Ratings. Here is a look at the ratings symbols used by the credit rating agencies for long-term debt instruments.


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