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Know how startup factory Favcy builds startups from idea to company

Favcy

Start Up

Know how startup factory Favcy builds startups from idea to company

Platform for launching new businesses Favcy helps entrepreneurs find, develop, launch, and expand their businesses. In exchange for ownership, the corporation delivers a centralized mix of services, including money.

The notion of a startup factory, often known as a startup studio or venture lab, is not new. Despite the fact that they appear to be interchangeable, there are some distinctions in how they work, what they offer, the amount of project engagement, and how long they choose to be a part of a startup’s path.

Incubators, accelerators, startup programs, and startup studios may all be found in India. However, in comparison to its international momentum, the notion of a Venture Builder (VB) or a venture building platform has yet to be fully realized.

Favcy is one of India’s domestic venture capitalists (VBs) that finds, develops, launches, and expands entrepreneurs by delivering a centralized mix of services, including financing, in exchange for ownership.

It begins with idea validation, business modeling, product development, and ends with post-product income and investment.

After an average “venture building” period of 15 months, the platform breaks free as the business raises further finance rounds.

Favcy was founded in 2015 by serial entrepreneurs Pranav Chaturvedi, Nischaiy Pradhan, and Harshit Joshi.

VB, based in Delhi, is home to 26 businesses and manages an active Asset Under Management (AUM) of over Rs 50 crore.

Pranav began his entrepreneurial experience in 2008 with the International Institute of Financial Markets (IIFM) and exam prep business Pratham, after working in finance for more than five years (co-founded with Ankit Kapoor and Satinder Sood).

“Because non-technical entrepreneurs fail to comprehend digital paradigms, the problem is particularly widespread among non-technical founders who are creating digital first enterprises.

They are typically founders with a service perspective who are unable to adjust to the product mindset that digital-first businesses demand.

By the conclusion of it, the angels had taken the brunt of the punishment,” he says. The issue necessitated the creation of a specialized organization that would provide a uniform format or a venture building assembly line to assist digital businesses in moving from stage zero to stage one and beyond.

With the launch of Favcy in 2015, Pranav intended to bring the notion of venture building to India after gaining popularity in the West.

Three more co-founders—Yamika Mehra, Ashish Ajmani, and Milapsinh Jadeja—were then added to the co-founding trio.

How does Favcy work?

Evaluation and selection are the initial steps in the process. The pre-term sheet period can last anywhere from 25 to 60 days, during which time the founders must attend an in-house development course while their company idea/product is reviewed and approved by Favcy’s experts. DREK, the startup’s proprietary “Concept Validator tool,” scans the market and checks for differentiation and relevance of a given idea using inputs gathered from founders.

The tool assists us in identifying ideas that are timely and have little competition. First, there’s idea validation and business modeling, in which the team collaborates with specialists to find the best business model. Following that, the product’s Customer Lifecycle (CLC) is mapped out, and the tech team selects suitable apps to construct the product and connect it with a front-end based on that.

These apps are made possible by Favcy’s in-house platform, FavcyX, as well as a shared tech platform, FavcyOS, which allows for a speedy digital launch. “We have our own checkpoints and have established a strong team of partners that look at various aspects of the venture builder separately,” says Pranav, who adds that the VB does not take an active governance role in a firm until it is asked, but does assist in the search for co-founders.

Before breaking away from Favcy and “leaving the nest,” the average firm is “venture built” for at least 15 months.

In terms of office space, servers, and other aspects of the transfer, the companies are assisted. Favcy, a startup equity play, claims around 15% of a business’s equity at the outset of its journey.

When an angel investment comes in, the company sells a portion of its stock (typically 2-5 percent) and keeps the remainder. This is similar to any other normal venture builder that has a portion of its stock backed by a group of angel investors to pay for these costly but well-organized services. SAFE Notes are also used to make angel investments (simple agreement for future equity).

Favcy has its own investment network, 1st Cheque, which is led by Yamika Mehra, one of the company’s partners and Chief Revenue Officer (CRO).

Sumit Ghosh (Founder, Chingari), Akshay Sarma (CFO, Capital Float), Sujayath Ali (Co-founder, Shop Up), Sumit Mehta (MD, Arrow Capital), Hrishikesh Thite (Partner, 10Club), and Rohit Talwalkar are among the team’s 3,000-plus angel investors (MD, Everstone Capital). In addition, the VB has connections with a number of independent funds, including OpenBook VC, which invests actively in Favcy’s portfolio firms.

Favcy is unconcerned about whatever sector he belongs to. Favcy did not function as a full-fledged VB platform during the first three years (2015-18), but instead provided its assembly line (FavcyX) and shared tech platform (FavcyOS) as an asset to enable firms digitalize their existing business.

IPL teams including KKR, Pune City, and Kerala Blasters used the service, as did media companies like Hindustan Times, Dainik Bhaskar, and Network18.

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