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Entrepreneurship / How Sweden became the Silicon Valley of Europe
« Last post by Reyed Mia, Daffodil on August 12, 2021, 10:37:08 AM »
How Sweden became the Silicon Valley of Europe

Klarna CEO Sebastian Siemiatkowski in the company's office in Stockholm, Sweden, August 25, 2020 Reuters

Sweden's home computer drive, and concurrent early investment in internet connectivity, help explain why its capital Stockholm has become such rich soil for startups, birthing and incubating the likes of Spotify, Skype and Klarna, even though it has some of the highest tax rates in the world

As Klarna's billionaire founder Sebastian Siemiatkowski prepares to stage one of the biggest-ever European fintech company listings, a feast of capitalism, he credits an unlikely backer for his runaway success: the Swedish welfare state.

In particular, the 39-year-old pinpoints a late-1990s government policy to put a computer in every home.

"Computers were inaccessible for low-income families such as mine, but when the reform came into play, my mother bought us a computer the very next day," he told Reuters.

Siemiatkowski began coding on that computer when he was 16. Fast-forward more than two decades, and his payments firm Klarna is valued at $46 billion and plans to go public. It hasn't given details, though many bankers predict it will list in New York early next year.

Sweden's home computer drive, and concurrent early investment in internet connectivity, help explain why its capital Stockholm has become such rich soil for startups, birthing and incubating the likes of Spotify, Skype and Klarna, even though it has some of the highest tax rates in the world.

That's the view of Siemiatkowski and several tech CEOs and venture capitalists interviewed by Reuters.

In the three years the scheme ran, 1998-2001, 850,000 home computers were purchased through it, reaching almost a quarter of the country's then-four million households, who didn't have to pay for the machines and thus included many people who were otherwise unable to afford them.

In 2005, when Klarna was founded, there were 28 broadband subscriptions per 100 people in Sweden, compared with 17 in the United States - where dial-up was still far more common - and a global average of 3.7, according to data from the World Bank.

Spotify allowed users to stream music when Apple's iTunes was still download-based, which gave the Swedish company the upper-hand when streaming became the norm around the world.

"That could only happen in a country where broadband was the standard much earlier, while in other markets the connection was too slow," Siemiatkowski said.

"That allowed our society to be a couple of years ahead."

Some executives and campaigners say the Scandinavian nation demonstrates that a deep social safety net, often viewed as counter to entrepreneurial spirit, can foster innovation. It's an outcome that might not have been envisaged by the architects of Sweden's welfare state in the 1950s.

Childcare is, for the most part, free. A range of income insurance funds can protect you if your business fails or you lose your job, guaranteeing up to 80% of your previous salary for the first 300 days of unemployment.

"The social safety net we have in Sweden allows us to be less vulnerable to taking risks," said Gohar Avagyan, the 31-year-old co-founder of Vaam, a video messaging service used for sales pitches and customer communication.

Startup rate vs Silicon Valley

Although overall investments are larger in the bigger European economies of Britain and France and their longstanding finance hubs, Sweden punches above its weight in some regards.

It has the third highest startup rate in the world, behind Turkey and Spain, with 20 startups per 1000 employees and the highest three year survival rate for startups anywhere, at 74%, according to a 2018 study by OECD economists.

Stockholm is second only to Silicon Valley in terms of unicorns - startups valued at above $1 billion - per capita, at around 0.8 per 100,000 inhabitants, according to Sarah Guemouri at venture capital firm Atomico.

Silicon Valley - San Francisco and the Bay Area - boasts 1.4 unicorns per 100,000, said Guemouri, co-author of a 2020 report on European tech companies.

No one can say for sure if the boom will last, though, in a country where capital gains are taxed at 30 percent and income tax can be as high as 60 percent.

In 2016, Spotify said it was considering moving its headquarters out of the country, arguing high taxes made it difficult to attract overseas talent, though it hasn't done so.

Yusuf Ozdalga, partner at venture capital firm QED Investors, said access to funding and administrative or legal tasks connected with founding a company could also prove tough to navigate for non-Swedish speakers.

He contrasted that to Amsterdam, capital of the Netherlands, where the government adopted English as an official language in April to make life easier for international companies.

'Interesting dilemma' for VC

Jeppe Zink, partner at London-based venture capital firm Northzone, said a third of all the exit value from fintech companies in Europe - the amount received by investors when they cash out - came from Sweden alone.

Government policy had contributed to this trend, he added.

"Its an interesting dilemma for us venture capitalists as we're not used to regulation creating markets, in fact we are inherently nervous about regulation."

Sweden's digital minister Anders Ygeman said that social regulation could make it "possible to fail" and then "be up and running again" for innovators.

Peter Carlsson, CEO of startup Northvolt, which makes Lithium-ion batteries for electric vehicles and is valued at $11.75 billion, said that ultimately success bred success.

"You're really creating ripple effects when you're seeing the success of somebody else and I think that's perhaps the most important thing in order to create local ecosystems."

Startup / Startups or SMEs - Why Does it Even Matter?
« Last post by Maliha Islam on April 27, 2021, 01:56:52 PM »
Startups or SMEs - Why Does it Even Matter?

There’s a debate raging on in the Bangladesh ecosystem on what makes a startup different from an SME, triggered in part by my friend Rahat’s article last summer, entitled: You’re probably not a startup, and that’s ok. Personally, I think this is a healthy debate that’s long overdue, as the word startup has been over aggrandized to be the end-all, be-all for those aspiring to entrepreneurship, without sufficient disclaimer on what it truly takes. But there’s also a natural rebuttal - why does it even matter? Isn’t the purpose, at least of angel investing, to find the best companies that can generate value, create jobs and remake the economy? Yes and no.

First, What Makes a Startup Different from an SME? They Aim to Win a Growing Market through Technology and Capital

Rahat has his own definitions, and I encourage you to check out this video from Slidebean as well as the seminal essay from Paul Graham, Startups = Growth. To me, the areas where a startup seeks to be fundamentally different from an SME are in these areas:

Target Market - A startup aims to win over a large, almost monopolistic part of a fast-growing market segment that is often emerging, being created through demographic, policy and technology changes in a society. For example, think of the size of the social media industry, which is really a segment within the much larger media industry, in 2004, when Facebook was launched, versus 2021. Market incumbents will often ignore startups and their niche segments for this very reason - the specific niche they are playing in is too small for the incumbent companies that derive their revenues and profits from more established segments, until it grows much larger and they are playing catch-up, or worse, try to use their powers of incumbency to go after the startup rivals, though often too late and at the expense of consumer choice. The smarter ones play ball and buy into these startups.
This market segment is at the very least national, but can also be international in scope. An SME, on the other hand, finds a niche often with a local or even hyper-local setting.

Business Model & Technology - As I’ve written earlier, a startup is a business in search of a repeatable and scalable business model, abetted by the creation of proprietary technology be it hardware and/or software. An SME, on the other hand, may or may not be developing technology, and when it does, may be using something off the shelf. Their business models tend to be tried and tested in other contexts, and applied within their own highly specific, very localized niche.

Profitability - Because a startup is in search of a business model, its first years are defined by the search for product/market fit, as well as revenue and user traction, which means running losses more likely than not. This is only made possible through multiple rounds of equity fundraising, from investors who make those bets based on the prospect of the startup reaching scale and potentially owning a major chunk of the market it is in down the line. An SME, on the other hand, has the pressure from its investors to make profits as soon as possible, though it may start with an initial capital outlay.

Customer Interface - In order to scale, a startup seeks to interact with customers through digital and self-service interfaces if it’s B2C, and if it’s B2B, there might be some sales support. An SME on the other hand tends to be more hands-on with customers, often through brick-and-mortar set-ups.

Employees - This is probably the best way to differentiate a startup from an SME. As a startup grows, the team size will remain stable or increase only slightly, to make improvements in the product. Whatsapp is probably the best example of this - millions of users and only 55 employees when it was acquired. On the other hand, as an SME grows, it needs to invest in growing its employee base, in order to support a growing customer base. As the Slidebean video says, “If you’re replacing an existing manual process with tech, then you might be on your way [to being a startup].”

Competitive Differentiation - A startup is defined by the intellectual property it generates, namely the tech, which creates unfair advantages such as economies of scale, network effects and a 5-10x improvement in user experience. An SME might have a strong brand, though its most enduring competitive advantage tends to be localized within its geographic footprint.

Types of Financing - Startups will require equity funds from investors who seek to make an outsized, multi-fold (often 10x plus) return on their investment. SMEs, because they generate revenues and are profitable faster, can take on debt and quasi-debt finance such as revenue and profit share. Because of the unpredictable nature of their growth trajectory, startups cannot make guarantees on returns. SMEs can use their predictable cashflows to obtain and pay back capital that requires mandated returns.

Exit for Investors - Outsized returns in startups really come in two ways: an IPO, or a strategic buyout. An SME can generate dividends, can be kept forever among the promoters (and their descendents), liquidated or if it’s at a certain size, bought by private equity which seeks smaller, single-digit multiple returns compared to venture capital which seeks double digit multiples.

Second, Why Should Founders Care? So They Are Aware of the Companies They Are Starting, and the Fundraising and Growth Trajectories That Are Possible

Founders need to be cognizant of the kind of company they have, and are capable of building. Not every company has to be a startup, and not every entrepreneur needs to create a startup. This is important, as we often see in Bangladesh hyper-localized or highly niche versions of major startups that have scaled and raised millions of dollars in capital, pitching for their own funding. It can be a fruit and vegetable delivery e-commerce site that mimics Chaldal, the dominant e-grocery platform that is now at Series B stage, with backing from major institutions such as the International Finance Corporation. It can be a micro-services marketplace that is strong in a certain neighborhood in Dhaka or in one or two service verticals, that mimics Sheba, which is going national and is strong across multiple verticals. It can also be a restaurant delivery app that has brand value within a certain part of Dhaka or in a secondary town, that competes with nationwide players such as Pathao, Shohoz and Foodpanda, which happens to be part of a multi-billion dollar, publicly-listed global company called DeliveryHero. It can also be a last mile delivery service for e-commerce that mirrors the work done by the likes of Paperfly, which recently received investment from an Indian startup in the same realm, which in turn has raised 100’s of millions to date.

The harsh reality in the startup game is that capital and scale matters, especially when combined with first mover advantage. While niche players can survive within their own pre-defined areas, moving against incumbents nationally at this stage will require significant amounts of capital, in the tens of millions of dollars. And that capital, if it is to come from institutional investors, will favor the incumbents, because they are more likely to survive and grow because they’ve proven they can. Our advice to founders creating niche models is to work for founders who have successfully fundraised for and scaled businesses, and develop their managerial expertise and apply those into new and ambitious ideas that are still wide open in Bangladesh. Even better if you can get those founders to be your angel(s). Or, you may have to realize that your best shot is staying within your hyper-local or -specific niche, which means you’re become an SME, and you can work with these national players as their distribution and fulfillment partners.

Even if an entrepreneur is not in a market where there is a strong incumbent startup, it is important to understand just what the expectations of investors are. One institutional VC said in a forum with me that whichever investment he makes, that investment on its own should be able to return the entire fund, in order to compensate for the risk of the rest of the portfolio not working out. Using a very simplistic example, if a VC has a $20 million seed stage fund, which writes investment checks between $250K - $1M, that means that each investment has to try to return $20M within 5-7 years of the investment. Let’s assume that the VC took 10% of a company for $500K, and is diluted down to 3% after 5 years and at least 3 rounds and is looking for an exit. This means that the enterprise value of the company has to equal $670M by year 5, in order for 3% to be worth $20M. Assuming a 20x price over sales multiple, that means the company needs to be generating $34M per annum in revenue by that time, when at the seed stage its annual run rate might have been $500K-$1M. That’s a compounded annual growth rate of 100-130%, over five years. How many businesses, and founding teams, can achieve that kind of scale, that fast, that consistently? More importantly, how many would want to take on such pressure? Especially if they cannot concentrate solely on company building but have to constantly fundraise, each step of the way, for bigger and bigger amounts that may or may not be possible in an early ecosystem like Bangladesh?

There is a reason why the most successful startups are called unicorns - it’s a near miracle when one is found/created.  But VCs raise their money from massive, multi-billion dollar corporations, governments, endowments, family offices, foundations and the richest people in the world precisely because those investors want to and have the capacity to take a risk on such lowest-probability but highest return opportunities.  Only exponential returns will do when it comes to venture capital, including venture capital investments in Bangladesh.

Once again, it’s important for a founder to understand what kind of business she wants to build, are capable of building and are building. It is perfectly fine to go for an SME business model that can grow steady at 10, 20, 30% per year compounded. But founders need to raise accordingly, from investors who also understand what type of business they are in.  We often see a tendency and desire to raise money in the pre-seed and seed stages from angels at multi-million dollar valuations without understanding what drives those valuations, including the creation of intellectual property and demonstration of exponential scalability, or at least a vision and plan to achieve it, and founder credentials backing that vision and plan.  Without the benefit of these things, if a company raises money from angels at such lofty valuations, it may come at the expense of long term success by creating expectations from investors it may or may not be able to meet when follow-on capital becomes scarce because the company’s revenue and user growth has not lived up to its valuation. This is especially true when the company starts pitching to VCs who have exponential growth expectations.

I’ve personally seen companies and founders in Bangladesh having to pivot from a high growth startup-style business model and opt for a low-burn, SME-style model when they realized that either the market or business they’re in will not allow for the former, or they can’t raise further capital for it. By then they are stuck - they’ve already raised money from angel and early investors, who had expectations to multiply their original investment manifold. The founders’ options are then to 1.) Convince investors to accept this new reality, 2.) Find a way to buy those investors out, 3.) Close/sell the company, return what money is left to shareholders and do something else or 4.) Continue running the business for years until investors can be paid out slowly through dividends. None of them are optimal.

Third, Why Should Angel Investors Care? So They Do Not Burden Founders with Impossible Expectations

Some investors want it both ways. They want sky-high growth, but also want break-even before the next fundraise. They want to take equity, but have guaranteed returns that mimic debt. Ultimately, you are either investing in a startup, with corresponding expectations and risks, or an SME, with an entirely different set of expectations about how it can be run and can generate value and returns. It may even make sense to create a portfolio of a mix of both models. 

Our advice is to be cognizant of the differences and invest accordingly.  At Bangladesh Angels, our preference is for startups, as they have the highest potential of creating outsized returns and effects on the economy. But we are increasingly looking at private debt and quasi-equity opportunities for novel SMEs that are operating within a strong niche beyond just a hyper-local geographic focus. This means they should have strong brand value and proprietary knowledge/processes, ideally augmented by the adoption of digital technology, and a recurring and growing customer base. These businesses are also struggling for capital, which is a whole another issue in Bangladesh and worth dissecting in another post.

What do you think? What is your definition of a startup versus SME, and which do you prefer to invest or build? Leave your thoughts in the comments.

Nirjhor Rahman

Bank Loan / Bangladesh Bank frames policy on startup financing
« Last post by Maliha Islam on March 31, 2021, 12:48:10 PM »
Bangladesh Bank frames policy on startup financing

The Bangladesh Bank (BB) has formulated a policy relating to the disbursement of funds worth Tk 5.0 billion for startups.

The disbursement of funds to the startup clients will be made collateral-free.

The central bank's SME and Special Programmes Department issued a circular detailing the policy on Monday.

The BB would form the Tk 5.0-billion refinancing fund to help the country's startups. Banks will disburse money from the fund to the startups.

Besides, the commercial banks will constitute their own and separate funds for the startups.

Individual banks will form their own funds with money equivalent to 1.0 per cent of their respective operating profits for the year 2020.

The banks will formulate separate policies to this end, to be approved by their respective boards.

The highest ceiling for loan from the fund will be Tk 10 million having a maximum of five-year repayment period. The startups concerned will get a grace period of one year to repay loans, either in quarterly or semi-annual basis.

Educational certificates of the startups entrepreneurs will be treated as collateral for loans. Each bank will preserve 10 per cent quota for women entrepreneurs.

The rate of interest for the startup loans will not exceed 4.0 per cent. The banks will get funds at 0.5 per cent interest rate from the central bank refinancing scheme. If an entrepreneur shares an idea with any bank for getting loan, the bank cannot disclose whether it will fund him/her or not.

The banks will add a new head in their balance sheet under the name of startups.

According to the BB, startup means innovations for marketing new products, services and technologies, and such enterprises would create employment and assets in the country.

Meanwhile, the Startup Bangladesh Limited, a platform to support new business ideas, will provide 50 startups with Tk 1.0 billion venture capital within this year, marking the birth centenary of Bangabandhu Sheikh Mujibur Rahman.

The to-be-funded startups are expected to use the money to expand their businesses and generate new employments, thus contributing to the country's economy.

To this effect, Startup Bangladesh Limited is set to hold a virtual programme - 'ShotoBorshe Shoto Asha' (a hundred hopes in a centenary) - today (Wednesday), according to a statement.

Zunaid Ahmed Palak, State Minister to the Information and Communication Technology (ICT) Division, is scheduled to attend the programme.

Startup Bangladesh, a venture capital fund under the ICT Division, will also provide the startups with a wide range of supports, related with mentoring, networking, legal affairs and intellectual property rights.

The statement also said the launching event would be broadcasted on the official social media platforms of Startup Bangladesh. A startup is typically a technology-based, unique and scalable business model, which usually needs financing in venture capital form.

স্পষ্টবাদিতা আত্মবিশ্বাসের কথা জানায় যা যে কোনও ব্যবসায়ের জন্যই আবশ্যক

স্পষ্টবাদিতা আত্মবিশ্বাসের কথা জানায় যা যে কোনও ব্যবসায়ের জন্যই চূড়ান্ত ভাবে আবশ্যক। আপনি যদি প্রতিনিয়ত অনুমান করেন যে,  আপনি অন্যের প্রতিক্রিয়া গ্রহণ করতে পারছেন না এবং সমস্যার একাধিক দিক ও দেখতে পারছেন না তবে বুঝতে হবে আপনার ব্যবসায়ের স্পষ্টতা নেই। এতে মারাত্মক সমস্যা সৃষ্টি হবার এবং ব্যবসায় ব্যর্থ হওয়ার সম্ভাবনা রয়েছে। টমাস লিওনার্ড একবার বলেছিলেন, "স্পষ্টতাই ফোকাস দেয়” " ফোকাস ছাড়া, কোন স্পষ্টতা নেই। তবে কিছুটা একাগ্রতা এবং সংকল্পের সাথে স্বচ্ছতার লক্ষ্য অর্জনের উপায় রয়েছে।

আপনার ব্যবসায়িক কন্টাক্টস এর কাছে সচ্ছ থাকুন

ব্যবসায়িক যোগাযোগের ক্ষেত্রে অন্যের কাছে কিছু আশা করার আগে নিজে নিশ্চিত হওয়া উচিত যে  নিজের বার্তাগুলো অনদের কাছে পরিস্কার হয়েছে কিনা। স্পষ্টতা মানে হল আপনাকে এটা জানানো যে আপনি কোন লক্ষ্যটি অর্জন করতে চান এবং কখন এই  লক্ষ্যটি অর্জন করার পরিকল্পনা করছেন।

চূড়ান্ত ফলাফল প্রাপ্তি।
আপনি যদি আপনার ব্যবসায়িক যোগাযোগের সাথে পরিষ্কার হন তবে আপনার ব্যবসায়ের লক্ষ্য অর্জনের আরও ভাল সুযোগ রয়েছে।

চলুন আপনাকে সমস্ত দিক গুলি তুলে ধরি।

পরিস্কার থাকলে আপনি সমস্যার সবগুলো দিক দেখতে পাবেন। এটি আপনাকে পারফেক্ট হবার সুযোগ করে দেবে এবং এটি আপনাকে সঠিক প্রশ্নই কেবল জিজ্ঞেস করবে না বরং তার সঠিক উত্তর ও দিয়ে দেবে।
সম্মান অর্জনঃ আপনি যদি সৎ এবং পরিস্কার মনের হন তাহলে আপনি আপনার অন্য সহকর্মীদের থেকে সম্মান পাবেন। তাই, পরিস্কার মনের হন এবং সৎ থাকুন।
আপনার যদি সুস্পষ্ট ব্যবসায়িক যোগাযোগের ক্ষেত্রে সমস্যা হয় তবে এখানে কিছু সংস্থান আছে যা আপনাকে এক্ষেত্রে সাহায্য করবে। কর্মক্ষেত্রে স্পষ্টতা অর্জনে সহায়তা করবে এমন সংস্থানগুলির জন্য অনুসন্ধান করুন।
Art, Design and Lifestyle / কর্মস্থলে সহযোগিতা
« Last post by Maliha Islam on February 13, 2021, 02:00:39 PM »
কর্মস্থলে সহযোগিতা

কার্যকর এবং উচ্চ কার্যকারিতাসম্পন্ন একটি টিম গঠনের জন্য কর্মক্ষেত্রে সহযোগিতা একটি কার্যকর উপায়. আগে সহযোগিতা যে কোন প্রতিষ্ঠানে ঘনক্ষেত্রের দেয়ালগুলি ভেঙে ফেলার জন্য এবং সপ্তাহের প্রতিটি দিন একে অপরের সাথে কাজ করার জন্য ব্যবহৃত হত। বর্তমানে অবস্থিত প্রযুক্তির কথা বিবেচনা করে এটি আজকের কর্মক্ষেত্রে আর প্রয়োজন হয় না।

কর্মস্থলে সহযোগিতা করার সুবিধা

আইজাক নিউটন একবার বলেছিলেন, "আমি যদি আরও দেখি তবে এটি দৈত্যদের কাঁধে দাঁড়িয়ে থাকা।" অন্যের উপর সহযোগিতা প্রবণতা কর্মচারী এবং প্রতিষ্ঠান উভয়ের জন্যই  বিভিন্ন উপকার সরবরাহ করে।

কাজের সাথে সহযোগিতা করার সবচেয়ে বড় সুবিধাগুলির মধ্যে একটি হ'ল এটি প্রতিষ্ঠানটিকে তাদের লক্ষ্যগুলির দিকে নিয়ে যায়। ৯৭% এরও বেশি কর্মচারী এবং দলপতিরা বলেছেন যে কোনও প্রকল্পের ফলাফলের জন্য সহযোগিতা অত্যন্ত  গুরুত্বপূর্ণ।

সহযোগিতার কর্মক্ষেত্রে আরও নমনীয়তা তৈরি করার ক্ষমতা রয়েছে। আপনাকে আর ৯-৫ এ কোনও ডেস্কে বসে থাকতে হবে না। সহযোগিতার মাধ্যমে আপনি হোম অফিস বা অন্য যে কোন জায়গা  থেকেও কাজ করতে পারবেন। কর্মচারীদের  কোনও অফিসে সীমাবদ্ধ না রেখে সারা বিশ্ব জুড়ে কাজ করতে সক্ষমতার সুযোগ নিতে পারেন।
সহকর্মীদের সাথে সহযোগিতা করার মাধ্যমে প্রযুক্তি-বুদ্ধিমান কর্মচারীর কাছে আবেদন করা যায় যিনি অন্যদের সাথে যোগাযোগের জন্য নতুন প্রযুক্তি ব্যবহার করে উপভোগ করেন.

সহযোগিতা সবার জন্য

সহযোগিতা হল যে কোনও ব্যবসায়ের ক্ষেত্রে সাফল্যের মূল চাবিকাঠি। দল হিসাবে কাজ করা প্রত্যেককে অন্তর্ভুক্ত করে এবং প্রত্যেককে উপকৃত করে।
ধনী হবার জন্য আপনার পাওয়া সব থেকে কার্যকরী আর্থিক পরামর্শ গুলো কি কি ?

কখনো শুধু মাত্র টাকা আয় করতে হবে, এমনটা ভেবে কাজ করবেন না। নিজের কাজের প্রতি ফোকাস করুন, আপনার কাজের সমমূল্যের টাকা আপনার ঠিকই আয় হয়ে যাবে।

কখনও বলবেন না "আমি এটি Afford করতে পারি না"। এর পরিবর্তে বলুন, "আমি কীভাবে এটি Afford করতে পারি?"

আপনার যদি Credit এর মূল্য পরিশোধ করার সামর্থ্য না থাকে, তবে কখনোই Credit এর মাধ্যমে কোন কিছু কিনবেন না।

সঞ্চয় না করে বিনিয়োগে মনোনিবেশ করুন।

নিজেকে নিজে Credit দিন। আপনি যা আয় করছেন তার ১০% আপনার নিজের জন্য রাখুন।

Good Debt ও Bad Debt এর মধ্যে পার্থক্যটা জানুন। Good Debt আপনার পকেটে টাকা নিয়ে আসবে ও Bad Debt পকেট থেকে টাকা নিয়ে যাবে।

Asset আপনার পকেটে টাকা নিয়ে আসবে এবং Liability এর কারণে আপনার পকেট থেকে টাকা খরচ হবে। তাই, Asset কেনার পিছনেই টাকা খরচ করুন।

আপনার Active Income কে Passive Income এ পরিণত করুন। Passive Income হচ্ছে এমন আয় যা আপনার নিজের সম্পত্তি থেকে উপার্জন করা যায়।

আপনার Financial Literacy এর উন্নতিতে ফোকাস করুন। ১০ বারের মধ্যে ৯ বার Financial Literacy কে স্ব-শিক্ষিত বলা হয় যা সম্পর্কে কখনো স্কুলে পড়ানো হয় না।

সর্বদা নিজের জন্য একটি Emergency Fund রাখুন। আপনার আয়ের কমপক্ষে ৫% দ্বারা এই Fundটি তৈরী করুন।
Angel Investment / Angel investing 101: Doing it right in Bangladesh
« Last post by Maliha Islam on February 13, 2021, 01:52:56 PM »
Angel investing 101: Doing it right in Bangladesh

As interest in the Bangladeshi startup ecosystem has grown, so has the responsibility of angel investors and other early stage stakeholders to properly assist founders and startups in preparing for their next stages of growth and funding. At Anchorless Bangladesh, we've spent the last 18 months better understanding how to accelerate the ecosystem relative to regional peers. This included a wide sweep with our friends at Light Castle Partners into the amount, type and sources of funding for startups. Of the roughly US$300 million invested in startups so far, under $25 million came from angels, of which less than a third were from local angels.

In our assessment, lack of consistent and appropriately structured angel funding is one of the single biggest weaknesses that has limited the development of the ecosystem.  In comparison, our regional peers in India, Indonesia and Vietnam have benefitted from angels playing a critical role in the early development and future funding of startups.  Not only does Bangladesh need more angel investors, but we need those who do become angels to invest more effectively and thoughtfully so founders can proceed to raise future rounds of funding abroad to scale their businesses.  Why does this matter?  Because startups and venture capitals can have a generational impact on the Bangladeshi economy, paving the pathway for our own Google, Facebook and Microsoft.

The role of angels in the funding process

Angel investors give startups capital at very early stages — often even before the company has revenue, traction or even a minimum viable product (MVP). While there are cases where angels invest in just an idea, especially for second or third-time founders with a track record, this is rare. Angels are critical in supporting startups before they receive proper seed funding, when ideally an institutional investor would come in with sizable capital to aggressively go for product-market fit and scaling. Angels invest in startups to lock-in a disproportionately high return in return for the risk they take. For instance, well-known angel investor Jason Calacanis received a return of over $100 million for the $25,000 he initially put in.  We encourage angel investors to build rapport with founders and the ecosystem; once an angel is known to properly support founders, they will likely get access to more future deals from the best founders. This explains why some angel investors get repeated deal flow into the best startups.


The process of finding the right founders and funding the startups is not easy—however, if done right, the chances of a better return are significantly greater.  Here are some suggestions for angel investors on how to find the next investment.

Quality of the founder and their focus

Finding the right investment starts with talking to founders. When we at Anchorless meet with companies, a sizable portion of our interest is related to the founders themselves. Similarly, an angel also invests in founders. Why? Because at the early stage of a startup, there's a lot of uncertainty regarding the market and the solution. This is exactly why an investor must trust founders to navigate such complexities. Before an investor puts in a dollar, they must make sure they're betting on those they trust and whose values and goals they align with — especially since an investment can last anywhere from 3-5 years, maybe even longer. Good founders will take capital and use it effectively to create value. If they are jumping from idea to idea without market research and validation, that may be a red flag.

Unit economics & tech-enabled scaling

While a startup will almost always be initially unprofitable, that doesn't mean it shouldn't have a strategy to improve its unit economics. It's a good sign when each successive sale the startup makes loses less money than the previous sale. One way to improve unit economics and scale efficiently is by having founders who have built or are capable of building a tech-enabled process that allows for the company to grow faster as it gets more customers. For instance, if a company needs to hire a new person for every new sale, then it's likely that the founders do not have a clear strategy on how to scale.

Market size and potential

During due diligence, investors should confirm that there is a reasonable market size for the product or service that the founders are envisioning. In addition, ask them, "What  would you do if you had 100% market share?" This will show you how they think beyond their current business.

Valuing the investment

While there are no hard and fast rules for valuing an angel investment, taking a mid-to-long term view here is necessary to ensure a positive outcome. The goal of an angel should be to make sure the company is properly set up for the next round of funding.

Exit strategy

Angel investors need to understand how their capital fits into the larger scheme of the fundraising process. Angels need to structure their involvement in a way from the beginning that allows a startup to successfully raise capital from institutional funds, likely from abroad, in a future round. We stress the importance of doing things the right way early so that an angel investor has a clearer path in actualizing a return—or, in other words, get money back for the investment. In order to do this, angel investors must be able to sell their shares into the market either through an acquisition, secondary sale or IPO. It's important to gauge the possibility of these options for each company.


Prospective investors not only need to assess startups with the right criteria but also need to evaluate their own motivations so that they can provide the kind of capital and support. Before getting into angel investing, prospective investors must ask themselves why they want to invest: Is it financial gain? If so, what is your time horizon? Is it personal satisfaction? Maybe a story to tell at a dinner party? Is it to show support to the community? How important is return?

"Am I interested in investing in a startup or an SME?" This reflection is critical; the inability to understand the difference between the two has caused significant issues between investors and founders and, at times, negatively impacted the ecosystem's progress. Capital should only be allocated to a startup when the goals and vision of the investor and the founders are aligned.

The following is a compilation of issues based on feedback from local founders currently affecting the Bangladeshi angel investment scene:

• Angels taking more than around 20% of companies: As a startup is expected to raise multiple rounds of capital, it's important that the founders retain a sizable portion of equity in order to remain incentivized. We have  repeatedly seen that founders who own a larger part of their company will work on its success more than founders who own a small percentage of a startup. Globally, angels usually do not take over 15% in the initial round. Due to the risky nature of the Bangladeshi ecosystem, taking a slightly higher percentage within reason is understandable. Ultimately, an angel investor's goal is to get the highest absolute dollar return regardless of percentage; 5% of $100 million is preferable to 20% of $10 million.

• Angels taking board control: In short, when an institutional investor (such as a venture capital fund) invests in a company, it wants to make sure the founders are in control of their company instead of an early angel who came in with a relatively small amount of early capital — especially when they are looking to put in a much larger sum.

• Focus on short-term metrics such as break-even and profitability: As discussed above, the primary goal for a startup should be to create defensible value through providing a scalable product, service or technology. Focusing on these two metrics will often stunt long-term value creation which may limit the investor's return.

• Asking for dividends: Startups do not pay dividends as all positive cashflow a company may produce should be put back into the business for further growth.

• Failing to add value beyond the money: The best angels provide mentorship, aid in business development and help with fundraising to further increase the value of the startup.

• Focus on physical assets: In general, asset-light startups will be valued higher due to their ability to use capital and scale more efficiently. For many, this may seem counter-intuitive, but the goal of founders is to maximize the return on every dollar raised.

That is easier to do through technology than physical assets.

• Not aiming high enough: Investors need to recognize that a startup should at least aim to dominate a market. Lowered expectations may stunt the company's growth and make it less attractive to future venture investors.     

• Funding properly and following up on financial commitments: Investors must allocate capital in no more than two tranches—and not monthly. An investor should want founders to worry about who to hire next or what product feature to add rather than focusing on whether they will be able to pay their employees.

To reiterate, the reason an angel invests in a founder is because they trust them. Investors should be there for guidance and support, not to treat them as employees without their own will and direction. Additionally, investors need to remember that if the founders' mental health does not allow them to operate at optimal efficiency, the investor's return will be limited. When we think of the best founders globally, we see the strength of their leadership and the support of their investors through their journey as a key complement to their success.


The most important thing to understand is that, while an angel may lose money in the majority of their investments, the ones that are successful should yield a disproportionately positive overall return. So, how does one approach angel investing knowing this? By creating a diversified portfolio. Once a potential investor decides how much money they will allocate to angel investing, the next step is to diversify risk.

For instance, this is how we explain the risk management process to potential angels: if an angel investor has $100,000 to invest, make 5 investments ranging from $15,000 to $25,000. The goal is to champion your portfolio companies' ambitions without constant risk of failure. Per our previous point, if we allocated $20,000 into five investments, consider the difference between the two following scenarios:

In Scenario A, each of the five investments return 25% resulting in a total return of $25,000. In Scenario B, however, four of the five investments go to zero—but the fifth investment returns 2,000%, or 20x, bringing in a return of $400,000!  This kind of portfolio allocation is what makes angel investors successful.

 We remind angel investors that supporting ambitious founders can often result in better returns for an overall portfolio than seemingly safe business models.

The impact of quality angels

When angel investing is done right, its value to the ecosystem and economy as a whole cannot be understated. Think about what percentage of global GDP is attributed to venture-funded startups like Facebook and Google, or the fact that Gojek contributed $7.1 billion to Indonesian GDP in 2019. As angels are a critical component of early stage funding, without their presence, startup ecosystems can be held back. In Bangladesh, the need for greater angel funding is currently a limiting factor for the success of our brilliant, young founders.  By increasing local angel capital and bringing in global angels, including NRBs (non-resident Bangladeshis) through networks such as Bangladesh Angels, we can set up our startups for future success.

Quality angel investors can help founders take their companies to the seed stage where they can get further funding from institutional funds, including a vast amount of global capital that is actively looking to enter Bangladesh.

The impact of venture capital is significant to an economy. Companies such as Uber and Facebook had angel investors before they became companies that changed the way we live. In Bangladesh, only a few startups have scaled to a level of national visibility, yet none with the possible exception of bKash are at the level of funding and valuation that regional peers in India or Indonesia have achieved.

For Bangladesh to go from $500 GDP per capita to $1,000, and then $1,000 to $2,000e was achievable with low-level labor arbitrage, but for the country to double from $2,000 to $4,000 and beyond, we'll need to not only nurture home-grown startups but also build a culture of local wealth creation by empowering local founders to move up the value chain and bring in global capital.

In celebration of our country's 50th anniversary, let this next decade be filled with opportunities for every one of us.  Let's give our founders the tools to put Bangladesh on the global map as a destination for the startups that may come to shape our collective futures.

Serial entrepreneur Bhavin Turakhia shares his business template to starting up

“Unfortunately, the media ends up predominantly only celebrating valuation wins. But I would say, as an entrepreneur, as a problem solver, focus on creating value, focus on creating meaningful value, and valuation will follow.”

Bhavin Turakhia, Founder and CEO of Flock, Founder of Radix, and Co-founder and CEO of Zeta, started coding when was just 10 years old and had the entrepreneurship bug since then. With 20+ years of experience in building multiple businesses, he started his first company when he was just 17 years old with his younger brother.

They owned and operated this company for about 16 years and by the time they sold it in 2014 at a $60 million exit, it was the fourth-largest domain registrar hosting company in the world with about 10 million domain names registered by customers from every location in the world.

In conversation with Sanjay Swami, Managing Partner, Prime Venture Partners, during the latest episode of Prime Venture Partners Podcast, a series that helps entrepreneurs grow and build their startups with the powerful insights of the makers and doers of the startup ecosystem, Bhavin shares his template for building SaaS companies.

The four phases: Planning, discovery, scaling, and steady state

Bhavin founded Radix and launched it in 2012, which started off with a small team and an investment of about $25 million.

He didn’t stop there. In 2014, Bhavin started Flock, which now comprises two products, and lastly in 2015, he co-founded ZETA. After spending all his life in B2B SaaS, he has come up with his own business template: planning, discovery, scaling, and steady state. Speaking from experience, Bhavin explained,

“The goal of planning is, do I want to enter into this business? Or do I want to build this product? The end outcome or the answer to it is yes, I want to go ahead. Until planning is completed, I will not hire people, except, have a small team of people.”

When a business is past the planning stage and is all set to go with the idea, there comes the discovery stage where the crucial decision lies with the entrepreneurs. He asked, “Is the planned hypothesis going to succeed in the market? Do we actually have a traction channel? And do we have a product-market fit?”

And after these two stages, the vital questions which need to be addressed are, “If you do have both of those then the scaling stage, the answer is that okay, now, I have a product and a business that makes sense and have a go-to-market strategy. Can I actually scale this? Can I 10x it or 100x it or 1,000x it, basically and what ingredients do I need to get that done? By the time you get to steady-state, the deliverables or and that’s the longest stage I guess, in any company’s history is the deliverables are built the right moats to make sure the business continues to be sustainable, optimise profitability, do succession planning, and bring in the right leadership and ensure that the company can sustain and survive.”

Three measurables to achieve the product-market fit

After reaching the discovery stage in your business, there remains a hypothesis and problem. To get the product-market fit there are three objective measures of product fit which are kind of deliverable formula of Bhavin’s. He explained, “Product-market fit has three objective measures, a high net promoter score, which means people want to use and love my product so much that they will recommend it to other people, a high asymptotic retention curve, so I could get 100 people in at the top of the funnel, and I might lose 60, 70, 80 but are 20 people that remain continue to remain perpetually, they keep using my product 8th week, 16th week, 32nd week, it’s adding enough value because then that 20 will become my honed in persona from the initial persona that I started out. These people find my product so useful, that they actually continue to retain.” “The third framework that I found really useful is new experimentation, wherein, with that set of customers, ask them a question that if I took this product away from you, would you be very disappointed? Would you be disappointed? Would you not care? And our goal should be to get to a very disappointing score of 40 percent. So out of the people that are using my product on an ongoing basis, 40 percent of them should be extremely disappointed if I took the product away.”


Venture Capital / Water Purification or Water Safety
« Last post by Reyed Mia, Daffodil on November 29, 2020, 10:36:48 AM »
Water Purification or Water Safety

Bangladesh – one of the most densely populated countries of the world— has plentiful water sources, but these sources are being polluted continuously. Both surface water and groundwater sources are contaminated with different contaminants like toxic trace metals, coliforms as well as other organic and inorganic pollutants. As most of the population uses these water sources, especially groundwater sources which contain an elevated amount of arsenic throughout the country; health risk regarding consuming water is very high. Death due to water-borne diseases is widespread in Bangladesh, particularly among children.

According to world bank safety water report 2019: $100 million financing agreement with the World Bank to ensure improved water supply, sanitation, and drainage system in selected 30 municipalities, benefiting about 600,000 people. So, government and private both looks concern in water safety issues.

In these circumstances, many financial organization try to invest in water purification or water safety maintenance sector. Based on business in water safety, there are various business opportunity create such as Trading purifier product and sell, production purifier materials, Invent device for purification, Water cleaning and maintenance, Water refinery system setup etc.

According to investor's eye, there are few characteristics of the business are lucrative for the investor to invest in the business.

   The company must have experience and domain knowledge in water purification/safety segment.
   If anyone works with the product then proper knowledge to use and solution system.
   Working experience minimum 1 year and owned relevant product for work purpose.
   Serve the service minimum of 10 different clients.
   Maintain and preserve client and other working documents.
   If invent device then patent and sell at least 2-3 client for good client feedback.
   If need maintenance warranty issues for customer satisfaction.
   Complete setup for water purification or relevant task. There are not only need huge setup but also have setup at least doing the job.
Entrepreneurship not about making money but having a purpose: Kiran Majumdar-Shaw

Entrepreneurship is not about making money but about having a purpose, renowned businesswoman Kiran Mazumdar-Shaw told Delhi government school students on Wednesday.

She was speaking during an online session organised by the government’s Entrepreneurship Mindset Curriculum team.

“Entrepreneurship is not just about making money. Have a vision of how you can make a difference in the life of others. You should always have a purpose. That purpose will drive you to succeed. You should always think of giving back to society,” she told the students.

Shaw is the Chairperson and Managing Director of Biocon, Asia’s leading bio-pharmaceuticals enterprise.

She touched upon various aspects of becoming an entrepreneur during the interaction.

“When I came back from Australia after completing my post-graduation and bagging top rank in my college, I was extremely confident of getting a good job. Instead, I did not get a single offer as nobody wanted to offer a job to a woman.

“I was completely shattered, but my father gave me the strength and did not let me lose hope. Ultimately I trusted my skill set and believed in myself. Eventually, I started my own business,” she said.

“The journey of becoming a successful entrepreneur has not been an easy one. During my initial days, nobody was willing to give me a loan for my business as they did not understand biotechnology and therefore, did not understand my business idea.

“But there was one person who found it interesting and agreed to provide me the loan. Therefore, whenever you feel stuck in a situation, there will always be a person who will listen to you, you just need to be patient and do not give up,” Shaw added.

The session was chaired by Delhi Deputy Chief Minister Manish Sisodia.

“Entrepreneurship mindset means we should look at every opportunity with a new perspective, irrespective of the career option we choose. A student may become an engineer, doctor, or anything else, but they should also have that mindset that if required, they can set up their own business and become a job provider,” he told the students.

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