What are the 3 biggest problems founders face in your country when they raise funding?

Hi. I’m Malavika and I’m an editor here at Tech in Asia, writing about startups from India. One of the biggest stories out of India last week was the sacking of Rahul Yadav from Housing, one of the country’s fastest growing and best funded startups. The Housing co-founder won few friends in his brief stint as CEO with his acerbic attacks on his own investors as well as others in the ecosystem. At the same time, observers pointed out that the incident raises fundamental questions about the lopsided power equation between investors and founders in an emerging startup ecosystem.

Some pointed out that Yadav and his 11 other co-founders from IIT Bombay were left with too little skin in the game – they held less than 10 percent equity in the company they founded. From my own interactions with entrepreneurs, one of the biggest problems they face relate to the pound-of-flesh terms often set by investors, especially at an early stage when startups are eager to get going before rivals emerge on the scene with a similar idea.

This set me thinking about the three biggest problems entrepreneurs face while raising funding in India, and I came up with the following:

• Entrepreneurs getting arm-twisted into signing harsh term sheets that take away too much equity too early for too little in return.
• Short-term metrics set by investors making it hard for an entrepreneur to keep his focus on long-term vision and differentiation.
• Investors attracted by low-hanging fruit and backing tried and tested models and hackneyed ideas, rather than newer, riskier ideas.

I wonder what the funding scene is in various startup ecosystems in Asia? Do they have a lot in common or does it differ a lot from country to country? What are the three biggest problems you see entrepreneurs in your part of the world facing while fund-raising?

Top image by Ash Photoholic