HOSTELFUND.

COM: CATCH THEM YOUNG

ABSTRACT

HostelFund (HF) was founded by Ankur Jain in December 2019 based out of Gurugram
(Haryana, India). It was set-up to support student start-ups through mentoring and helping them
in getting funding at an early stage. The venture idea was based on its founder Ankur Jain’s
personal experience as a student entrepreneur the challenges he faced during those days. He
further refined the idea during his regular interactions with students who were keen to start
their entrepreneurial ventures. The mentoring-heavy model and stiff filtering mechanism to
shortlist the mentees had led to a low conversion rate of mentee firms for HF turning into
incubates thus putting a question mark on the financial viability of the venture.
HF needed to address the issue at the earliest to improve their conversion rate to make the
venture financially viable. Ankur was seriously thinking whether to continue with their present
approach or needed to look for other alternatives. He was deliberating and considering the other
available options and evaluating them before deciding the way forward.

Key Words: Entrepreneurship; Students; Mentors; Venture Capitalists

1
 HOSTELFUND. COM: CATCH THEM YOUNG
After a long conversation, Ankur Jain, founder of HostelFund.com (HF) put down the phone.
He was visibly upset after the phone call and was pacing up and down when Mani, co-founder
of HF walked in. HostelFund.com was set up to help students realize their entrepreneurial
dreams by providing them with mentoring and funding support at an early stage. Sensing his
mood, Mani sat quietly and after a long silence, Ankur shook his head and narrated the entire
conversation to Mani. The phone call was with the founder of one of their mentee start-up,
whom they had mentored for more than six months. After the mentoring cycle, the founding
team made the presentation to investors arranged by HostelFund after which, the decision to
fund the start-up was taken in principle. Subsequently, the term sheet was exchanged in mid-
April 2022 and founders were to respond within a week. After receiving no response for a
fortnight, Ankur called them up to find out what was going on.
During this conversation, the founders revealed the offer they received from another investor
at almost twice the valuation, which they were planning to finalize. This made Ankur very
unhappy as it meant that all the time and effort spent by HF on mentoring them and arranging
the investors from their network was of no use. It frustrated Ankur no end as this was not the
first time when a mentee start-up had walked out of the deal at the eleventh hour. This approach
along with their stiff shortlisting criteria was reflected in their low conversions as they had been
able to invest only in six ventures so far, while their rivals who started later than them were
able to invest in a higher number of start-ups.
Both Ankur and Mani started discussing this issue as they realized that they needed to resolve
this issue to improve their conversion rate and financial health of HF as to date they were in
losses. They were wondering whether they should continue with their existing mentoring-
heavy model, where they provided intense, one-to-one mentoring for 6-9 months to the mentee
start-ups after which they made a pitch to investors. HF rivals had adopted a very different
approach to mentoring, which lasted for a shorter duration and was offered in cohorts with
more focus on closing the deal. While both Ankur and Mani were convinced about their
mentoring approach and its relevance but also realized the need to improve their conversion
rate. After a long discussion, they called off their meeting as it was already late. While driving
back home, Ankur was still thinking about whether it was time to explore other options what
are the other options available and what are their implications.

EMERGENCE OF VIBRANT ENTREPRENEURIAL ECO-SYSTEM IN INDIA

India’s start-up ecosystem has undergone radical changes due to many factors; the launch
of start-up policy, easier access to capital, strong institutional support, increasing thrust
towards digitization, changing demographic profile and fast expansion of educational
infrastructure. The government took several initiatives and introduced many schemes to
promote entrepreneurship including the Start-up India Initiative 1, providing tax benefits, the
launch of various incubators, funds and other schemes to support start-ups2. India was a
country of young people with an average age of 28 years compared to 37 years in China & US,
45 in Western Europe and 49 in Japan8. India had over 250 million children of school-going
age and close to 500 million people in the 5-24 years age bracket.3 Considering the needs of its
1 “About Start up Portal”, Ministry of Commerce and Industry, Government of India, accessed on June 20, 2022,
https://www.startupindia.gov.in/content/sih/en/about_startup_portal.html
2 “Startup Accelerator of MeitY for Product Innovation, Development and Growth (SAMRIDH) –Scheme”, Minstry of

Electronics and Information Technology, Government of India, August 31, 2021, https://www.meity.gov.in/content/startup-
accelerator-meity-product-innovation-development-and-growth-samridh-scheme
3 “Reaping India’s demographic dividend”, UNFPA, January 13, 2022, accessed on June 6, 2022,

https://india.unfpa.org/en/news/reaping-indias-demographic-dividend

2
population, the educational infrastructure had been expanding at a brisk pace to more than 1000
universities, close to 40,000 colleges and 9,000 AICTE-approved institutions with many skills-
focused institutions coming up4. With the launch of the Start-up India policy in 2016, the focus
of the Government shifted to creating job providers rather than job seekers. So, increasingly
educational institutions were focusing on developing an entrepreneurial mindset among
students by focusing on Entrepreneurship Education. This was aimed at making the cultural
shift and overcoming the mental stigma around starting their ventures by providing them with
the necessary skill sets to undertake entrepreneurial journeys.
With all these initiatives, India developed the third largest start-up ecosystem in the world with
more than 61,000 registered start-ups compared to 5000 in 2010 growing at a rate of ten percent
annually5. The Economic Survey 2021-22 mentioned that 14,000 new start-ups were added in
2021-22, 15,000 in 2020-216. In 2022 India was third on the list of the number of start-ups that
had attained unicorn status (start-ups having a valuation of over USD 1 billion) behind the US
and China7. Some of these start-ups were founded by young people coming out of their
educational institutions like Fabence, Notemybook, MechJunction, and BluePage.8. However,
the country needed more students to start their entrepreneurial ventures. This was the time and
the situation was ripe for players like HostelFund.com to encourage student ventures and act
as a catalyst to further strengthen the entrepreneurial ecosystem in the country.
It was also pertinent to highlight that 80-90% of the startups had failed in India. This had been
primarily attributed to a lack of study on market demand, poor financial management,
inexperienced and poor leadership, ineffectual efforts in marketing and incapability to adapt to
changing market needs
THE STARTUP CULTURE – INDIA AND OTHER DEVELOPING COUNTRIES
The startup culture had picked up pace in India since 20169 when the Government of India
formally started several initiatives to support entrepreneurs who had the potential to create jobs
rather than seek jobs. The strengths in India for the start-up were its vast population base which
was also technically inclined, the Government Initiatives like Start-up India providing funding,
tax benefits, and simplified regulatory processes, and increasing interests of both domestic and
international investors. The challenges in the Indian economy vis-à-vis start-ups are complex
regulatory and tax laws, lack of infrastructure, and diverse markets with varied consumer
behaviour and preferences.
The startup culture in India has been flourishing which is evidenced by the list of young
entrepreneurs in India of which the top 5 are Ritesh Agarwal of OYO Rooms, Bhavish
Aggarwal of Ola Cabs, Vijay Shekhar Sharma of Paytm, Byju Raveendran of Byjus and Kunal

4 “Background” All India Council of Technical Education, May 25, 2022, , https://parakh.aicte-india.org/aboutus
5 ibid
6 Arun Padmanabhan,” Economic Survey 2022: At least 14,000 new startups recognised in India, up 20 times in five years”,

The Economic Times, January 31, 2022, https://m.economictimes.com/tech/startups/economic-survey-2022-at-least-14000-

new-startups-recognised-in-india/articleshow/89243366.cms
7 “India sees birth of its 100th unicorn, total valuation reaches $332.7 bn”, Mint, May 6, 2022,

https://www.livemint.com/news/india/india-sees-birth-of-its-100th-unicorn-total-valuation-reaches-332-7-bn-
11651857687522.html
8 Divya Chandra, “9 college startups that went on to become big companies “ YourStory, August 28, 2015, accessed on June

6, 2022, https://yourstory.com/2015/08/college-startups/amp
9
“About Startup India”, Startup India, accessed July 15, 2024,
https://www.startupindia.gov.in/content/sih/en/about_us/about-us.html

3
Shah of Cred10. All of them are characterized by the “force of creativity, tenacity, and the
transforming potential of entrepreneurship.”11
Start-up culture was also studied in other developing countries and they are detailed below:
Brazil- It was the largest economy in Latin America with a high level of entrepreneurial spirit
and innovation capability. There were initiatives like Start-up Brasil12 by the Ministry of
Science, Innovations, and Communication which offered support. There were specific
opportunities for entrepreneurship in sectors like fintech, agritech and edtech. The challenges
in the Brazilian economy were fluctuating economic conditions, complex regulations and high
taxes, and limited opportunities to access venture capital, unlike developed countries.
Nigeria- The key strengths of Nigeria were its young and rapidly growing population,
emerging technical hubs like Lagos13, highly pervasive mobile telephony, and initiatives like
the National Technology Development Agency supporting technology-based start-ups14. Key
challenges in Nigeria were poor infrastructure, limited funding availability, regulatory
complexity, political and social instability
Indonesia-It was the fourth most populous country in the world with a rapid growth in internet
and e-commerce. Government was supporting entrepreneurs through different programs;
significant growth had been observed in sectors like fintech. The challenges were unclear
regulations, infrastructural issues and funding availability15.
Kenya- Nairobi was the leading technical hub in Africa. It had made good progress in fintech
innovation. The government was supporting the growth of innovation and entrepreneurship.
Challenges were smaller market size, lack of funding and clarity in regulation16.
Thus, it emerged that countries with a larger population like India, Brazil and Indonesia offered
significant market potential to the startups however they posed challenges like market
fragmentation, lack of regulations, heavy taxation and poor infrastructure.
FOUNDER AND IDEA
Ankur belonged to Jammu a union territory situated in the north of India, where his father
owned a small-scale industrial unit. Being a bright student, he got admitted to the prestigious
National Institute of Technology, Surat for an engineering degree in electronics stream. During
their college days, he actively participated in extra-curricular activities and also attended a few
events focused on entrepreneurship. After graduating in 2006, he joined ATOS, a leading
European IT company and worked with them for two years before joining a prestigious
Business School for an MBA degree. Here his interest in entrepreneurship drew him to start an
entrepreneurship cell (E-Cell). During his second year of his MBA, he started his venture
named Connect2MBA, which was acquired by an education-technology company Liqvid17 in

10
“Young Enterprenurs in India”, Locobuzz, accessed July 22, 204, https://locobuzz.com/blogs/young-entrepreneurs-in-
india/
11
ibid
12
“Start up Brasil”, https://www.startupbrasil.org.br/
13
“Lagos State Government Official Website”, https://lagosstate.gov.ng/about-lagos/
14
“Mandate”, National Technology Development Agency, accessed July 18, 2024 https://nitda.gov.ng/mandate/
15
“How Indonesia Is Creating a New Generation of Entrepreneurs “, ADB South East Asia Development Solutions,
accessed July 18, 2024, https://seads.adb.org/solutions/how-indonesia-creating-new-generation-entrepreneurs
16
Ludo Fourrage, “Inside Nairobi, Kenya's Thriving Tech Hub: Startups and Success Stories”, Nucamp, accessed
July 18, 2024, https://www.nucamp.co/blog/coding-bootcamp-kenya-iken-inside-nairobi-kenyas-thriving-
tech-hub-startups-and-success-stories
17
“Liqvid”, Liqvid, May 13, 2022, https://liqvid.com/

4
2010. After completing his MBA, he joined Liqvid as their Digital Initiatives-Head. He left the
company to join Airtel18 in 2012 to head their Mobile Education business and after working
with them for four years left the company to join Amazon19 in 2016.
During all these years, his interest in entrepreneurship remained strong and he also helped few
start-ups. He also tried another entrepreneurial venture, which didn’t work out as per his
expectations. During these times, he was engaged with a few academic institutions and
students, who were interested in starting their ventures. During these interactions, Ankur
realized that many students had innovative business ideas and passion but still many could not
even start their ventures or if started couldn’t succeed. He also recalled his times as a student
entrepreneur when he always used to think had he received some handholding in the form of
mentoring and early funding support, the outcome would have been different for his
entrepreneurial venture. This thought and his personal experience as an entrepreneur during his
student days always played in his mind.
While interacting with students, he realized that this gap was still there, which resulted in many
students not being able to summon the courage to start their entrepreneurial ventures and those
who did fail at times as their ideas were raw. He felt that this was due to a lack of mentoring
and funding support at an early stage, as there was no one to support students’ ideas, which
could handhold them by spending time working with them to crystalize their ideas into
something concrete and then also help them in getting funding at a pre-start-up stage. This
thought always stayed with him and he wanted to address this issue with a missionary zeal.
Since the Indian entrepreneurial ecosystem was developing at a fast pace in recent years and
many changes were happening, he thought that this was the right time to address this issue. In
2018, he decided to leave his cushy job to again start something, which would address this gap
in the current entrepreneurial ecosystem. While looking for suitable options, this idea of
starting student student-centric fund germinated in his mind and he sensed the timing was right
but also decided to add a strong dose of mentoring. Ankur was always inspired by the success
of the Dorm Room Fund (DRF), which was a dedicated fund run by students to invest in student
ideas set up in the USA in 201220. He started working on this concept and after fine-tuning it
shared it with some of his close friends, who found it very exciting especially keeping in mind
the focus of Government. on start-ups.
INCEPTION OF HOSTELFUND.COM
Ankur bought the domain name HostelFund.com in 2018 and in December 2019 floated the
venture HostelFund.com21 based out of Gurugram (Haryana, India) with the vision to support
students in their entrepreneurial journey. It was a platform to promote student start-ups by
providing them extensive mentoring support to become investment-ready and then eventually
helping them to get funding through Hostel Fund’s network of investors. Ankur quickly built
an impressive advisory board as well as brought many mentors on board from various sectors
along with many entrepreneurs to mentor these new ventures. His deep connection with
professional educational institutions through their Entrepreneurship-Cells (E-Cell) helped him
reach out to the student community. Simultaneously, he reached out to people including his
friends working abroad or in the entrepreneurial eco-system to become potential investors in
student start-ups. Getting investors, who would invest in student ventures was a challenging
task but within six months, he was able to on-board around 100 investors, who were willing to
invest. As he got things in place and the venture started getting traction, he brought his old

18 “Airtel”, Airtel, June 7, 2022, https://www.airtel.in/

19 “Amazon”, Amzaon, June 7, 2022, https://www.amazon.in/
20 “About Dorm Room Fund”, Dorm Room Fund, accessed May 13, 2022, https://www.dormroomfund.com/about
21 “HostelFund”, HostelFund, May 13, 2022, https://hostel.fund/

5
friend Mani Kantan from Liqvid days to join HostelFund.com as Co-founder and Chief
Operating Officer in 2020. Mani was a serial entrepreneur with strong background in
Marketing and Sales.
HOSTELFUND.COM: HOW THEY WORK?
Once a student showed interest, he/she was asked to formally apply on HF website. It had a
detailed application form, which they needed to fill along with uploading their presentation.
Each proposal received was thoroughly screened, followed by a call to learn more about the
founders and their ideas. Based on this, a decision was made whether to take the proposal
forward or not. For proposals, where a decision was taken not to be taken forward, detailed
feedback was provided to founders, so that they could build on it. If a proposal was found
interesting, the founders were asked to make a detailed presentation, where they were quizzed
in detail about their idea, team, and execution plans. In many cases, the founders were told to
go back, make changes after consulting various stakeholders, revise their presentations, and
then make another round of presentations. To pick the right proposals, they not only relied on
clear parameters but also looked for passion and drive in the founding teams. They expected
the teams to be young, have innovative ideas, and be open to working hard to realize their
dreams with at least one ready customer to pay for the idea. Once the proposal cleared this
stage, it was taken to the next level, where each team was assigned mentors from a related
domain.
HostelFund.com had empaneled a large number of mentors coming from various domains and
industries with strong backgrounds in their functional areas and readiness to mentor budding
start-ups. Typically, one mentor was assigned to one proposal but in some cases based on the
requirements, additional mentoring support was also provided by specialized experts. Each
mentor would normally spend around 2-5 hours per week with the founders to work on their
ventures. The entire mentoring period could go on up to 6-9 months to make them better
prepared and become investment-ready. There were instances, where ideas would not cross
this stage for varying reasons. After the exhaustive mentoring process, the founders would
make a presentation to Ankur and Mani, where a decision was taken whether the founders were
ready for the pitch to investors or not. For those ventures, where it was felt that some more
work was needed, these were put under intense mentoring, where a team of mentors would
work with them to make them pitch-ready, which could take another 3 months.
Students had a prospect of receiving funding if they could establish the viability of their idea,
team, and execution ability in front of investors. HostelFund.com had put on the table a
financially strong and keen community of angel investors22 who were ready to invest in these
student start-ups at an early stage. Once the founders were ready, Ankur would share their
project details with potential investors based on their interests. Finally, the pitch presentation
was done by the founders in front of those investors (refer Exhibit-1). After this presentation,
the final decision on the investment, its ticket value and other details were discussed and
mutually agreed upon. Once this happened, the term sheet was sent to these founders and the
deal was inked. Typically, the ticket value of the investment was in the range of $25,000-
$80,000 but it could vary depending on the requirements. They adopted SAFE23 as a protocol
to receive future equities. Since HF focused its energies in making these ventures successful,
so a lot of effort and time was spent on mentoring and hand-holding. They were closely
associated with startups, so it was important for HostelFund.com to monitor their progress after

22“ Angel Investors”, The Hartford, May 13, 2022, https://www.thehartford.com/business-insurance/strategy/alternative-

funding-startup/angel-investors
23 “Simple Agreement for Future Equity (SAFE) “, Thomson Reuters Practical Law, May 25, 2022,

https://uk.practicallaw.thomsonreuters.com/w-001 0673?transitionType=Default&contextData=(sc.Default)&firstPage=true

6
funding. For this, they ensured that one of their team members sat on their board and attended
their board meetings (refer Exhibit-2).
HOSTELFUND.COM: ASSET LIGHT BUSINESS MODEL
While building their network, they partnered with various stakeholders, which ensured that
they didn’t need to have a large headcount. HostelFund.com adopted an asset light model to
build their organization by entering into partnerships with various stakeholders rather than
having a big team of people on their rolls. They identified key stakeholders and started
developing a strong partnership with them since beginning. To receive a regular pool of student
proposals, they reached out to large number of educational institutions across the country. For
this, they partnered with many academic institutions and also tied up with 35-40 incubators and
E-cells of academic institutions including many engineering and management colleges. To
reach out to these institutions, they were regularly organizing seminars, activities and B-plan
competitions with them. These included many prominent institutions, like BIMTECH24,
MANIPAL25, VIT 26 Vellore to name a few. These tie ups helped HostelFund.com to build
lasting relationship with the institutions and gain traction among student community.
They were able to develop a strong value proposition for students by getting on board key
resources including angel investors, rich pool of pro bono mentors and support service
providers. The objective was to become students first choice, when they were planning to start
their ventures. HostelFund.com had more than 100 mentors with 5-30 years of work experience
in corporate world or were successful entrepreneurs. They came with experience in more than
20 different verticals and spent quality time with student founders and gave them valuable
insights to sharpen their ideas. Ankur had been working right from the beginning on getting a
pool of angel investors on board as he realized, how critical funding was at early stage. Further,
he kept on enlarging the pool of committed investors, who would individually invest a small
ticket value but at a very nascent stage, when this money was very critical. HostelFund.com
started with a pool of 100 investors, which over time increased to more than 800. They also
collaborated with a range of service providers like Amazon Web Services, Chartered
Accountants, Lawyers and players like Dare2Compete, Your Story and Wadhwani
Foundation27.
HOSTELFUND.COM: SOURCES OF REVENUE
HostelFund generated revenue from three sources; firstly, investors investing through
HostelFund.com paid a onetime initial fee of $100 and annual subscription fees of $150.
Secondly, whenever the startup was able to raise money through their platform; a small amount
was paid by them to HF as a service fee. Thirdly when investors would exit their investment,
20% of the profit was charged by HostelFund.com, this was known as “carry”. So, largely their
revenue would be realized in future and was dependent on the number of investments made
and successful exits. Thus, when they lost any mentee venture to an investor outside their
network this was seen as a deterrent to the revenues of the company. This means that they had
potentially lost the opportunity to make money as a service fee while raising money and the
potential loss of 3rd option. The fact that through HF only six mentee ventures were able to
raise funds meant that their revenues so far were largely restricted to the first option, which
was not sufficient to turn HF profitable. The fact that they were very choosy in shortlisting
their mentees (only 6 got funding) and then providing them with extensive hand-holding out

24 “About BIMTECH”, BIMTECH, May 25, 2022, https://www.bimtech.ac.in/about-bimtech/

25 “About Manipal Jaipur” , Manipal Jaipur, May 25, 2022, About Us | Manipal University Jaipur
26 “About VIT”, Vellore Institute of Technology, May 25, 2022, https://vit.ac.in/about-vit
27 “Partners”, HostelFund, Mat 25, 022, https://hostel.fund/team/partners/

7
of the strong conviction of Ankur, which might be a good strategy in the long-term as it might
increase their chances of success. Till the end of 2022, revenue was not enough to cover costs
though HF was not considering becoming profitable in the immediate future. They believed
that if they invested in ample number of high-quality startups, then 5 years down the line they
might be able to generate good revenue through successful exits. But at the same time the strict
filtering process to select mentee start-ups, loss of mentees before the funding stage after
spending lot of time and effort in mentoring them were affecting their revenues and putting a
question mark on their current approach.
COMPETITIVE LANDSCAPE
Since this was relatively a novel kind of service dedicated only to student start-ups, there were
few players operating globally and within India in this domain (refer Exhibit-3).
MAJOR COMPETITORS
GRADCAPITAL
GradCapital was founded in 2021 by Abhishek Sethi and Prateek Behera, graduates from IIM-
A and BITS Pilani. Based in Bengaluru, it helped college graduates grow their ideas into
businesses. The venture was supported by CIIE.CO - The Innovation Continuum28, based out
of IIM Ahmedabad. While conceptualizing the idea of GradCapital, they ran a pilot to test their
hypothesis and ended up with a thriving cohort of eight companies and so far, invested in 20
start-ups. GradCapital proposed to invest $25,000 for 4 percent equity in each of the 25 start-
ups in the coming year. They developed a structured 2-month paid mentorship cohort-based
program to hand-hold ventures and make them ready for the investment stage.
9 UNICORNS
9 Unicorns was a student-centric fund for start-ups offering funding only to students from top-
ranking institutions in India29. It was set up in 2020 in Mumbai by Apoorv Ranjan along with
three more co-founders. They run an acceleration program on the lines of Y-Combinator, which
was run in batches. So far, they have invested in 59 start-ups with a combined valuation of
$420 million. Seven of these start-ups had already raised bigger rounds of investments. Over
the next three years, they planned to invest in 150 such start-ups.
CAMPUS FUND
Founded in 2020, Campus Fund was a venture capital firm based in Mumbai, India. They
developed a quick and transparent 5 step objective evaluation process. The steps were; Elevator
Pitch, First Meeting with a SIP and an Associate, Second Meeting with another SIP and an
Associate, Meeting with the Central Team, Pitch to the Investment Committee. Every year,
they run a grand challenge to pick their portfolio of student start-ups. By March 2022 they had

28“Capital Incubation Insights Everything”, CIIE-CO, May 13, 2022, https://ciie.co/

29Rashi Varshney,” Venture Catalysts launches 9Unicorns Fund, India's 'first accelerator VC'”, Yourstory, August 1, 2019,
https://yourstory.com/2019/08/venture-catalysts-startup-accelerator-9unicorns/amp

8
already had helped many start-ups like ExMyB30, ParkSmart31, Digantara32, HealthySure33 and
Sortizy34, to raise funding.
A close look at their rivals operating in India indicate that while they all started after HF but
had invested in a greater number of start-ups. Also, most of them offer structured mentoring
process of much shorter duration and have monetized it also. While HF operated in a very
different way, their mentoring process was much longer, intense and offered on one to one
basis rather than cohort based or in batches. Further their due diligence process was more
stringent and they had so far invested only in six of them. While their rivals had invested in far
higher numbers and further had ambitious plans in terms of the number of investments.
HOSTELFUND.COM: PORTFOLIO
Since its inception, HostelFund.com had received and vetted more than 2,000 proposals. Most
of them fell through at various stages in the filtration process. Hostel Fund with its, large
network of investors and Entrepreneurship Cells could evaluate all the proposals that were
submitted by the students as well as undertake a much larger pool of mentee start-ups but they
had chosen to be very selective. The final selected ideas were categorized under two baskets,
investment-ready and in need of intense mentoring. The investment-ready proposals were put
up for funding to their network of investors, while the others, needed some more work and
fine-tuning before they could be taken up for investment. Till May 2022, out of all the proposals
received, only six of them received funding and another 8-10 were under intense mentoring
before they could be considered for investment (Refer Exhibit 4).
HOSTELFUND.COM: CHALLENGES & FUTURE PLANS
Within a short span, HostelFund.com had been able to build an impressive network of partners
and gain traction among the student community. They were continuously expanding their
mentor as well as investor pool and also reach among student community. Since their inception
in 2019, they had received close to 2000 applications and after carefully evaluating most of
them, invested in six of them with few more under active consideration. A domain wise analysis
revealed that while the majority of the proposals received by them were from management
graduates to the tune of 50 percent followed by engineers around 35 percent and the rest 15
percent from other categories. But the interesting revelation was that only 10 percent of the
proposals submitted by management graduates were taken to the next stage, which for
engineers stood around 40 percent. To attract quality applications, they have expanded their
consideration set to include students who have passed out within a year and the ones who
dropped out to start their ventures.
While the number of applications received and evaluated so far was impressive though the
actual investments made were low their rivals had been able to evaluate a larger pool and invest
in more ventures. Going forward, Ankur had been thinking about taking HostelFund.com in all
major states across the country. He intended to develop ‘State Champions’ who would replicate

30 Thimayya Poojary, “ExMyB raises seed round led by Campus Fund”, Your Story, April 20, 2021,
https://yourstory.com/2021/02/funding-alert-exmyb-raises-seed-round-campus-fund/amp
31 Sujata Sangwan,” Smart parking platform ParkSmart raises seed capital from Campus Fund and industry veterans” Your

Story, June 7 2021, https://yourstory.com/2021/05/funding-alert-smart-parking-platform-parksmart-campus-fund/amp

32 “About Digantara”, Campus Fund, May 25, 2022, https://www.yourcampusfund.com/digantara
33 ET Bureau,” HealthySure bags $1.2 million in funding from Campus Fund, others”, The Economic Times ,Feb 16, 2022,

https://economictimes.indiatimes.com/tech/funding/healthysure-bags-1-2-million-in-funding-from-campus-fund-
others/articleshow/89605647.cms
34ET Bureau,” Kitchen app Sortizy gets $100,000 in funding round led by Campus Fund”, The Economic Times, January 31,

2022,https://economictimes.indiatimes.com/tech/funding/kitchen-app-sortizy-gets-100000-in-funding-round-led-by-campus-
fund/articleshow/89230413.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst , May 25, 2022,

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their existing model in different states by partnering with a large number of educational
institutions. The idea was to reach out to all kinds of institutions and students to widen their
selection pool to find more investment-worthy proposals.
Further, HostelFund.com had consciously adopted a strong and intense mentoring process
drawn over a long period. This was a clear departure from the approach adopted by their rivals
who were more focused on expanding their portfolio of companies with a cohort/batch-based
mentoring approach for a limited period. But Ankur was very insistent and enthusiastic about
sustained mentoring as he strongly felt that students’ ventures needed deeper engagement as
their ideas might not be very polished and hence mentoring could really make a difference.
Whether it would help in increasing the success rate of the venture or the investments made by
HF, only time will tell. But as of now with a low conversion rate and ventures dropping out
after a long-drawn mentoring process was creating a challenge and putting a question mark on
the future of HF and they needed to consider other options.
Ankur had been deliberating on this issue for some time and this latest instance compelled him
to consider and evaluate the available options as he realized it was time to decide. He had also
looked at their rival offerings and compared HF's value proposition to their rivals (refer
Exhibit-6).
HOSTELFUND.COM: WAY AHEAD
Looking back, Ankur was satisfied with the progress made by HostelFund.com within a short
span of time. But the issue troubling Ankur was low conversion rate and more specifically the
case of drop-out of mentee ventures after receiving their mentoring and when the investment
deal had been finalized in principle and was about to be inked. It nullified the entire effort put
in by Hostel Fund; tough filtering process, long mentoring cycle and finding investors for
investments. So, it was a setback not only in terms of losing a deal but the entire time and effort
spent on filtering and mentoring the start-up. As per Ankur;
“It was like they dated with us for a long period but married someone else”
Ankur sensed that he could not let this setback affect the future journey of HF as he sensed the
timing was right in terms of current vibrant entrepreneurial eco-system as well as the strong
value proposition of HF. Ankur realized that he needed to make some changes in their existing
approach and had discussed the various options with his co-founder Mani and also thought a
lot on various alternatives. It was time to decide as he could not let this issue drag on any
further.
EXHIBITS
Exhibit-1: HostelFund.com: Process Flow

Application on More details

Evaluate the Allocate Ideas ready Final pitch to Ideas are Post funding
website with and one on
proposal mentors for funding investors funded review
pitch deck one discussion

The process takes between 6-9 months.

Source: Developed by Case Authors

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 Exhibit-2: Roles and Responsibilities of HostelFund.com

Before Funding (Including due Diligence)

1. HF evaluates, mentors and helps startup ready for funding
2. HF evaluates the pitch and engages with 2/3 experts(mentors) to evaluate the pitch
3. HF consults with existing (if any) committed investors to understand their thesis and comments
on the start up
4. HF evaluates competition and takes feedback from mentors/experts regarding the pitch and then
make it open for the members for investments
5. In some cases, HF connects start up with the prospect customers to take the real time feedback
6. HF in association with Lead investor (or other investors) will do the due diligence (Their current
tech systems, banks systems, grant etc.)
Post Funding
1. HF maintains a regular communication channel with the founding team as a constant hand
holding is required for these young entrepreneurs
2. HF will ensure that a monthly investor update and a quarterly update is shared with its members
by the start up
3. HF will help start up in connecting with the industry and help startups scale the business
4. HF will help start up in recruiting the correct talent
5. HF will help start up in marketing and PR
6. HF will help the start up in next stages of funding
7. HF will take feedback from the members and will share it with the startup and vice versa
Source: Company Documents
Exhibit-3: Ventures Focused on Funding Students’ Entrepreneurial Ventures
Name Founder No. of Ticket Mentorin Major Incubatees Services Leadership
& Ventures Value g Provided Team
Starting Funded (US $) Duration
Year
GradCapital 2021 15 Plus $25,000 2 Months KiranaKart, Humit, Early Stage Entrepreneur
(India) Codedamn, Valerio Funding, s
Electric, and Structured
Neuralastic Mentorship
Program
9Unicorns 2020 50 Plus $15,000- 1.5 Toch.ai, Klub, Early Stage Professionals
(India) $ 20,000 Months Janani, ExtraaEdge, Funding,
Deepsync, Monrow, Accelerator
Qin1 Program
Campus Fund 2020 5 $50,000 NIL ExMyB, ParkSmart, Elevator Entrepreneur
(India) Onwards Digantra, Sortizy, Pitch, Early and Industry
Healthy Sure Professionals

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 Stage
Funding

HostelFund.com 2019 6 $25,000- 6-9 NexStem, Metvy, Mentoring, Entrepreneur

(India) $80,000 Months Pixcele, UBreathe, Accelerator and Industry
CultureX, BosonQ Program, Professionals
Psi Early Stage
Funding
Source: Compiled from Various Sources
Exhibit 4: Investments in Startups by HostelFund.com

Startup & Year of Founders & Their Affiliations Domain Focus Mentori
Founding ng
Period
NexStem (2020) Siddhant and Dipansh, BITS Pilani, Med-Tech 4-6
Rajasthan, India Months
Metvy (2018) Shawrya and Rajan ,Kirori Mal Personality 9 Months
College, Delhi University, Delhi, development and
India networking
Pixcele (2019) Rishav,SRM University, Chennai , Gig working 9 Months
India
UBreathe (2020) Sanjay, FMS Delhi, India Eco-Tech 6 Months
CultureX (2020) Vinay Mehta from HLCC, Culture and Arts 9 Months
Ahmedabad, India
BosonQ Psi (2020) Abhishek Chopra, PhD, Bhilai Quantum 2 Months
computing
Source: Company Documents

Exhibit-5: Comparative of HostelFund & Its Rivals

HostelFund GradCapital 9Unicorns Campus Fund

Founding Year 2019 2021 2020 2020

Applications Processed 2000 1500 1800 1600
No. of Investments 6 20 50 Plus 10
Mentoring Period 6-9 Months 2-4 Weeks 3 Months 14 Weeks
Mentoring Approach One to One Cohort Based Cohort Based Cohort Based
Mentoring Type Not Paid Paid Paid Paid
Source: Compiled by Case Authors

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