We are firm believers of entrepreneurship and we want more and more Sri Lankans to enter the startup ecosystem with products and services which are innovative, marketable and profitable. Entrepreneurship is the way to take the country forward if we are looking to grow the economy, the more we produce the more we grow, it can be in any industry, however, the market expects a world-class, innovative and cutting-edge products & services.
While we have extraordinary talents in the country, most of the startup founders having difficulties in access to investment and mentorship, Sri Lankan startups can achieve big success with correct mentorship and funding support, this is where Crowd Island (Crowdisland.lk) comes into action.
Crowd Island is an equity crowdfunding platform which connects angel investors with early-stage startups, we felt that they are the best people to answer some of the most asked questions, we met the CEO of Crowd Island Mr Chalinda Abeykoon, who is a well-known startup evangelist, a cool suave individual with a lot of knowledge and passion, rest of this short read deals the important questions raised by our readers and answers of Chalinda.
Chalinda at the #Cricrush Launch – Image Credit trendsmap.com
1. What is the part of Crowd Island in the startup ecosystem?
Crowd Island aims to support early-stage startups to raise external funding by helping them become investor ready. We also work with several ecosystem partners to help educate both budding entrepreneurs & angel investors.
2. What is the minimum criteria for a startup to pitch for funding? If a startup wants to raise funds, what is your advice for them?
We focus on tech startups that have gone through idea validation. This means that we, at a minimum, look for a working prototype where we can go through a market validation. Our advice is to avoid trying to raise funds at ideas stage as much as possible. A lot of things can go wrong when taking a product to market and using the external funding to validate product/market fit can hamper your growth.
3. How the ownership change after the investment round?
Each funding round will have an ‘ask’ AKA funding requirement and it’ll have a corresponding stake on offer. Once the funds are raised, the founders will be diluted accordingly. During the early stages (angel & seed rounds) the ownership will remain with the founders. For the most part of the journey, the ownership will remain with the founders until and acquisition.
4. An angel investor or a VC, is he just an investor or he add value to the company?
First and foremost, the roles of an angel & VC changes drastically. Funding does not guarantee startups success hence in startups, it’s difficult to be a passive investor. We encourage angels to be hands-on as the founders require mentoring as much as they require funding.
5. Will you assist a startup to raise funds, which is in the idea stage? How do you value the idea?
We help startups structure, strategize and raise funds. We call this process ‘becoming investor ready’ we will also train the startups how to pitch prior to connecting them with investors. We also build a financial model and valuation which helps both the founder and angel investors during the discussion. We do help idea stage companies provided that they have some level of traction. i.e. we cannot support pure idea stage startups. We recommend them to other programs such as spiralation which is run by ICTA.
6. How does an investor expect to get returns for the investment he made on startup?
Ideally, when an acquisition takes place
7. In your experience, what is the most investment attractive startup sector? Why?
Don’t believe that there is a specific sector. Each sector has its own challenges and opportunities and each party (founder & angels) have their own interests.
8. How do you look at the Sri Lankan startup ecosystem, the current and future?
I believe that the SL startup ecosystem is now in its early growth stage. There are mature folks launching their own startups and a few outside investors are also looking at Sri Lankan startups. The support structure is slowly coming together which is encouraging and we’re seeing tier 2 cities such as Jaffna & Kandy getting activated.
Our Heartfelt thanks to Chalinda and Crowd Island team for accepting our request and helping us to educate our followers and for the service they provide to empower the startups. If you are an entrepreneur or a startup founder and if you want to become investor ready, don’t forget to check what Crowd Island has to offer you. You can reach them via https://crowdisland.lk.