After serious hard work, persistence, and creative collaboration, the seed investments have come in for two I-Cube Incubated companies: 8Byte Studios, and Orange Ball Pvt. Ltd; with this, we can proudly say that SAFAL Seed is a success! Congratulations to the SAFAL team and the entrepreneurs for putting in the tremendous effort, completing the valuation process, to finally getting the seed funding from Nepali Individual investors to invest in their companies so that they can use this money to grow. Not only did the two companies meet their total ask amount, they increased this amount because of the overwhelming response and support they received from investors!
SAFAL Seed, Nepal’s first seed fund, is the product of a groundbreaking collaboration between 5 organizations working across different sectors in Nepal: SAFAL Partners, Nepal Communitere, Antarprerana, gandhi Associates, and Reanda Biz Serve. SAFAL Partners is the primary administrator for SAFAL Seed, and worked on valuation and monitoring; Nepal Communitere was the main business incubator; Antarprerana mentored and coached the entrepreneurs; Gandhi Associates provided legal support; Reanda Biz Serve handled the financial side of managing the accounting and valuation process. These organizations with their shared vision, shared contacts, pooled knowledge, and reduced operational and organizational risks to benefit the entrepreneurs as well as Nepal’s entrepreneurial ecosystem in general.
SAFAL Seed had an intensive valuation process, to guarantee safe investment for the investors. The SAFAL valuation technique is a combination of 3 different things:
- Adjusted book value
- Discounted Cash Flow(DCF) method, or Y Combinator- pioneered Simple Agreement for Future Equity(SAFE) to figure out the equity shares.
- Critical Success Factors which was based on the the subjective judgement of Nepal Communitere and Safal Partners’ teams on matters of drive, determination, persistence, stamina, team strength, coachability, etc.
This is the first time Nepal has adopted the SAFE method, pioneered by Y-Combinator in Silicon Valley, to valuate startups in order to receive investment. Nepali investors put their hard-earned cash growth capital to help scale these young Nepali-startups. Similarly, an extensive subjective valuation of ‘critical factors for success’ were also observed by both Nepal Communitere and the SAFAL team who had known their strengths and weaknesses on a more personal and deliberate method.
Throughout the valuation process, and after the completion of it, there were many investor meet ups. The companies got the opportunity to pitch again, and the investors asked questions about the companies and their goals very diligently. Investors were supportive as they discussed, questioned and agreed to the SAFAL valuation technique, which was especially applauded for being driven by both numbers and considered judgement.
After months of hard work, the cheques have officially been signed along side contracts, and the SAFAL Seedlings (as the I-Cube companies are now affectionately called) will sit with their investors and elect a board that will help them achieve their company goals by offering sought after mentorship, guidance, and valuable networks. Thanks to our investors for believing and sharing our vision, and congratulations to the SAFAL Seedlings, and all of the teams involved!
Managing Director of SAFAL, Mr. Ashutosh Tiwari spoke of SAFAL Seed as a necessary platform in helping the growth of entrepreneurship in Nepal, by supporting and encouraging entrepreneurs. He said, ““SAFAL Seed addresses a demand in the entrepreneurship ecosystem: that growth-oriented start-ups and small businesses should be able to attract investment, and that the investment should be tied to better governance, better documentation, better business know-how, realistic milestones and greater accountability on the part of the entrepreneurs. SAFAL Seed is a collaborative effort among five different organizations, and it has passed its test as a co-created prototype by successfully raising funds from individual private investors for Orange Ball and 8Byte companies.”