Aspiring entrepreneurs are often faced with the daunting task of navigating the complex world of mergers, acquisitions and fundraising. However, with the shared knowledge of Mr. Dhruv Agarwala, the CEO of, and, you can now make sound decisions with confidence. Mr. Agarwala's expert advice provides a comprehensive understanding of the key factors involved in these processes, allowing entrepreneurs to approach them with clarity and ease. # What is a key takeaway for an entrepreneur starting a business? According to Mr. Dhruv Agarwala, the skills and experiences required to become an entrepreneur or start a business are mostly same in every industry, be it: - technology, - mining, - e-commerce, or - infrastructure industry The two most important things to be a successful entrepreneur are: 1. `Building the best team:` - It is the most challenging thing for entrepreneurs especially while starting a business. - Every entrepreneur carries a vision for his/her business. - It is very important for the entrepreneur to inspire other people to join his/her mission to build a great team. 2. `Empowering the team:` - Most of the entrepreneurs are unable to let go i.e. they want to take each and every decision and handle each and every situation themselves. - In order to scale up your business, you have to empower your team and you should not judge them every time. - As an entrepreneur, you should hire the right person and trust their decisions # What are the benefits of mergers and acquisitions? Most of the Mergers & Acquisitions (M&A) fail due to a mismatch in the culture of both the companies. Mergers and acquisitions are done for the following reasons: `New technology:` If you want new technology in your company, which you don’t have as of now, it might be better to buy or go for a merger or acquisition instead of building it. `Geographical expansion:` Suppose if you have a strong business presence in North and West India but not in the South and East India, then you might go for a merger or acquisition with a company having a strong presence in the East and South India. `Adding a new product line:` Sometimes, it might happen that your business is missing a product line, which you want to add as a complementary product. In such a case, you can buy a company with that product line instead of building a new product line to reach the market faster. For example: - When PropTiger started in 2011, it was an online brokerage firm, which: - Performed on the ground transactions with the home buyers - Assisted home buyers with the complete end-to-end procedures including site visits, documentation and handing over the keys. However, the following things were missing in the PropTiger: - Lack of top of the funnel customer acquisition engine, i.e. the customer first goes to different platforms for searching homes and returns to the PropTiger at the end. - The cost of customer acquisition (COCA) of PropTiger was high. Hence, they decided to acquire to get the following benefits: - is a well-recognised brand with a high brand value. This has helped PropTiger to reduce their cost of customer acquisition. - acts as a discovery platform for people who are looking to buy a house. In the initial days of his/her house search, a customer visits and once he/she decides to buy, the lead of the customer is transferred to either PropTiger or a broker/developer. After that, the transactions of buying and selling a house are completed. Mr. Dhruv Agarwala’s company is a unique company in the digital real estate segment, which has its own customer acquisition platform i.e. & and also an on-ground service channel like # How can technology help entrepreneurs improving their business processes and scaling up their businesses? There are multiple applications of technology. Some of them are: ### 1. Digital Marketing: Most of the people in rural and urban areas are spending more time on the Internet through their mobile phones or laptops instead of reading newspapers and books. So, along with traditional marketing, you should also adopt digital marketing for marketing your products or services to increase the visibility of your brand. For example: Mr. Dhruv Agarwala shares his experience that all the real estate brokers or developers that come to their platforms list their product with them. You can list also your product on, if you are from the real estate sector. Similarly, if you are a merchant, you can list your product on sites like Amazon or Flipkart. ### 2. Accounting or Bookkeeping: There are multiple online and technological platforms and tools that have made accounting and bookkeeping a lot easier and can help you in scaling up your business. For example: The daily ledger that you maintain in hand-written format can now easily be maintained on your smartphone or laptop using some basic tools. Hence, technology is an enabler that helps your business to grow as you can’t grow much with manual processes and tools. If you can embrace technology, it can help you scale a lot faster. # How an SME identifies that at a specific stage a particular source of funding is right for his/her business? Mr. Dhruv Agarwala shares his advice that one should delay the process of raising funds as far as possible and run the business with one’s own cash flows and earnings. You should raise funds only in the following situations: - Requirement of more working capital to run the business - Investment in new technology - Introduction of a new product line - Entering a new market Once you decide to raise the funds, the next step is to ascertain the source of funds. There are two different ways of raising funds, which are: ### 1. Debt funding It means borrowing funds. `Features:` - It carries a risk of financial distress as you have to pay back the money along with interest. - It is crucial to understand your business’ cash flow profile before raising funds through debt. - You should go for debt funding, only if your company is: - Profitable - Cash generative - You can do debt servicing i.e. you are able to pay interest and principal amount ### 2. Equity funding Many start-ups are raising funds from VCs through equity funding. `Features:` - No risk of immediate financial distress - You are not expected to return the capital instead you are expected to use it wisely and generate returns for your investors. - Debt funding is always cheaper than equity. - Analyse your business and determine which type of funding will be best for your business. # Top 3 things an entrepreneur should keep in mind while establishing an online business ### 1. Open-mindedness towards using digital technology: For example: In Indian markets, sometimes online-only and offline-only do not work. Hence, India is one such market where there is a huge opportunity to build an online to offline business where customer acquisition can be done online but service fulfillment can be done offline. ### 2. Establishing trust: For example: When you go to the market to buy a product, you are able to see a person across the table and hence, able to build trust. In an online business, you can’t see a person and hence, establishing trust becomes very important. Following is one of the ways of establishing trust: When your business is expanding, you should spend on consumer marketing to build a brand that always builds and creates trust. ### 3. Access to capital: When you are competing against other online businesses, access to capital is essential. Hence, you should build your business model in a manner, which is attractive to VCs. But, it is extremely important to keep in mind the unit economics. While starting the business, people think that they can stay as a loss-making company for many years because the funds are available to them and thus, they neglect the unit economics. India is one such market where consumer willingness to pay is very low because of which the margins remain low in business. So, while creating an online business model, you should keep in mind that the model should give you long-term profitability. ### 4. Scale your business You should keep in mind the long term profitability of the business comes only through scaling up your business.