How To Raise Money from First Cheque ?

An Operating Manual for FirstCheque.vc

Kushal Bhagia
Aug 6, 2020 · 6 min read
A Pre-Seed Fund Run By Founders, For Founders

It’s about a year and half since we launched FirstCheque.vc with this post!
And what a wild ride it has been! We now have an amazing network of Founder Angels (our Venture Partners) with whom we have invested in 42 pre-seed/seed stage companies.
Multiple of them like Fleetx, DrinkPrime, YoloBus, Bellatrix and many others have already raised follow-ons rounds from Tier A Funds! Moreover , the founders we have invested in have now started recommending us to other founders in their networks — and we are now seeing a snowballing of extremely good quality teams solving big, hard problems - flocking to raise their First Cheque from our collective of Founders!

However, because our structure is fairly unique — many founders who pitch to us, don’t really understand how we operate. So to make our lives and their’s easier, I thought I would put down an “operating manual” of sorts — on how to approach, pitch and get funded by First Cheque. So here it goes!

So what is First Cheque ? 💸

We are a pre-seed/seed stage fund. We typically invest Rs 25Lakhs (minimum) to 75Lakhs (or $40,000- $100,000) in preferably the first funding round of a company. These are rounds where founders are raising between Rs 50Lakhs to Rs 3.5Cr ($70K-$500K).
The companies could be at a paper-plan stage, some have an MVP built while some have a fully working product with paying customers.

How does First Cheque Decide where to invest ?🤔

First Cheque is a fund that is deployed by a collective of Founder Angels — whom we call Venture partners. These are folks who have built, run, exited Tech companies and products. We believe they make for the best pickers of early stage companies, so wherever they invest, we simply give them more money from the fund to deploy. Our Venture Partners include Farooq Adam(co-founder of Fynd), Aprameya (Cofounder Taxi-For-Sure, and now Vokal), Sachin Oswal (cofounder of Infibeam), Vidit Aatrey (Co-founder of Meesho), Harpreet Singh Grover (Co-Founder of CoCubes) and many more. You can see the entire Venture Partner network here.

We have a very simple criteria on where FC will invest — if any of our Venture Partners, want to write you a minimum Rs 5 Lakh Cheque, We give them more capital and together end up deploying at least Rs 25Lakhs. Anything that is potentially VC fundable we are open to investing in. We have done Fin-Tech, E-commerce, SAAS, Logistics, Gaming and companies in many more sectors!

We like large markets (show us how you can realistically do $100M of revenue in 5–8 years) and businesses with a strong tech leverage. We also like teams that can demonstrate their ability to build high-quality products.

We have setup our fund on AngeList India, so the entity on the company’s CapTable is just one — AL Trust.

So How do I pitch to First Cheque ? 🤓

Since our Venture Partners are the ones who pick startups — you should figure out a way to reach out to them. They all have different methods of evaluation/sourcing so we haven’t put their email IDs on our website. We want founders to figure out a way to reach out to them.

Ideally, founders can go pitch a Venture partner that they feel is best suited to evaluate their space, for eg if you are an e-commerce company it may make sense to pitch to Farooq from Fynd or if you are a mobility company — Aprameya from TFS is probably a good fit. However, our Venture partners also invest in domains where they haven’t built or run companies — if they like a team or identify with the need for the product. So you can go connect with whichever Venture partner is in your network and simply go pitch to them.

What If I don’t have any Network ? 💆🏽‍♀️

Well, you would be surprised by how many people get back to a well written cold email! :) So we strongly encourage you to try!
If you are not for some reason able to attract the interest of any of our venture partners, you can pitch us by filling in this application form.

But be mindful — we are a very small team (two full-time members 😊) running FC so we may not really have a good understanding of the market you are building for — whereas I am sure we have a Venture Partner who does.

How quickly can you write me a cheque 💨 ?

So this really depends on the quantum of money you need. In case you need Rs 2Cr , our Rs 25 Lakhs cheque size won’t really be enough to close the round. So if we are the first ones to say yes, we will work with you and connect you to investors we know who can put a sizeable cheque and lead your angel/pre-seed round. This could take 1–2 months.

In case you are doing a smaller round around of 50–70Lakhs with just First Cheque and our Venture Partner, or in case you already have a lead investor and need us to co-invest with you, we can move very fast. Our record on this is 5 days from first call to money in the bank and we will be happy to beat it. 🚀

Apart from the💰, What do I get by raising from First Cheque ?

Well, apart from the cash — you get a team of ex-/current founders and operators who’s shared network and expertise you can bank upon in good times and bad. We typically form a whatapp group with the venture partners who invested in you + me + your founding team — which becomes your personal BrainTrust. You can ping us anytime for anything — product/legal/tech/marketing/fund-raising etc. Usually we know someone who was in your shoes and solved the problem you are facing :)
We also get you $10K of free AWS Credits and $10K of Free Freshworks credits to get started!
When you are ready, we also connect you to and prep you for VCs from India and abroad who can lead your first institutional round!

Can I raise money from multiple FC Venture Partners ? 👫

Yes. If one Venture Partner says yes, they typically share the deal with the other VPs on our internal group so that others can join in if they are interested. If you specifically want to pitch to anyone, the lead VP or me would be happy to introduce you to them.

Are your Venture Partners investors in First Cheque ? 🤔

Nope, those are our Limited Partners — people who have given us money to invest. Most of FC’s investors are larger VCs/Investors in India with whom we connect our portfolio companies to for follow-on rounds.

Our Venture Partners have to put in a Rs5L cheque to lead a round with First Cheque in a particular startup but we don’t require them to invest in our fund.

What are your deal terms ? 📝

Since we are usually not the lead investors, we don’t set the terms. But typically deals that we are part of are equity investments at post money valuations of Rs 5Cr to Rs 15Cr — depending on the stage of the company, experience of the founders etc. Valuation is not a hard rule for us but this is the sweet spot. The other terms are fairly standard — 1X Liq Pref, Tag-Along, Pro-Rata Rights, 10% ESOP Pool, and no Board Seat. You can check out our standard Termsheet here.

Where I can see the First Cheque Portfolio ? 👀

You can see it here on our website!

How can I become a First Cheque Venture Partner ? 🤝

Have you built and scaled a company for a sizeable outcome ? If yes, shoot me an email on kb[at]firstcheque.vc and I would love to explore this with you.

Can I invest alongside deals that First Cheque does ? 🤑

We are choosy about this but yes, you can. Mail me at kb[at]firstcheque.vc

If you need any other help navigating the First Cheque process or if you need any help in general with your startup feel free to contact me on email or Twitter.

Cheers ✌🏽
Kushal