Startup Pitch : An insider’s guide on What do VCs want?

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This presentation looks at issues which startups need to look while pitching this ideas / business plans to VCs.
Shailesh Vickram Singh has been an entrepreneur and VC for last 16 years and is presently working with SeedFund - India's leading early stage fund.

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  • Very sharp and a must keep for anybody seeking funding. Nice.
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Startup Pitch : An insider’s guide on What do VCs want?

  1. Startup Pitch : An insider’s guide on What do VCs want? Shailesh Vickram Singh e: svs@seedfund.in t : @svickram w : fringenotes.in 1Wednesday 18 July 12
  2. What do VCs want? • Magic potion? • Some secret sauce? Or it is like one of those unsolved mystery faced by mankind like What do woman want?Wednesday 18 July 12
  3. Is it a VC or ? Contrary to popular belief and media descriptions, there are some empirical evidences of VCs being human (e.g. their constant checking of BB / FB / Twitter during a meeting)Wednesday 18 July 12
  4. So what’s diff ? Follow basics rules related to presentationsWednesday 18 July 12
  5. Basics # 1 : Time ‣ 60 Minutes ~ Average meeting time schedule ‣ 15 minutes ~ Card exchange / Microsoft / Projector blues ‣ 20 Minutes ~ Constant interruptions / questions by VCs ‣ 5 minutes ~ Summarizing of discussion Hence just 20 minutes for presentationWednesday 18 July 12
  6. Hence ! • 20 minutes ~ 15 / 25 slides at max with 1 min per slide on an average • Limited number of slides doesn’t meanWednesday 18 July 12
  7. !  Majorityfutureinvestmentsinhypermarkets(33%), 1 !!!!!Company!Purpose! supermarkets(33%).Top8ci7estoget~48%share World s first and only portal focused on !  Constraintsfortheindustry: automating buying, delivering of individual daily !  AvailabilityofHumanResources needs including grocery, processed food, !  Constantinnova7onofSupplyChain pharmacy and health consultation supported by telesales !  MismatchofRetailSpacedemand&supply 2 !!!!!Why!Now?! India!an!ABrac7ve!Opportunity!for!Organized!Retail! ! Penetraon)of)organized)retail) PercapitaincomeThe Indian retail market: 5th largest retail des7na7on globally, (000 s$)45.8 40.1 44.7 6.9 9.1 1.9 2.5 20.0 1.0es7matedtogrowfromtheUS$330billionin2007toUS$420. 100% 80%Modernretailtoincreaseitsshareinthetotalretailmarketto22% 60%by2010.7billionby2010andUS$637billionby2015 40% 85% 80% 80% 20% 36% 33% 30% 20% 15% 4% Overview Unlimited data on limited Slides 0% •  India tops the AT Kearneys annual Global Retail a a a y il A UK ia si a an az in re di Development Index (GRDI) for the third consecu7ve year, US ss ne Ch In Ko Br rm Ru do S. Ge maintainingitsposi7onastop. In OrganisedRetail Tradi7onal Low!penetra7on! •  PWCforeseesIndiatocon7nueasthetopsourcinghubs& at!present;! mostaYrac7vemarketforretailinvestment Retail)market)in)India) 860 expected!to! •  Huge opportunity that lies ahead with about 97% of the grow!at!30%! 615 CAGR! country sretailsectorunorganized 445 483 524 568 410 •  Morethan75%oftheac7veinternetusersareworkingand 110 215 50 74 are expected to have busy lifestyles with less 7me to visit 15 22 33 2008 2009 2010 2011 2012 2013 2018 storesfortheirshopping.Risingfuelandgasolineprices TotalRetail Organized •  None to –nil_ compe77on in e_commerce and telesales in thesedomains Source: E&Y Research, World Bank 2007, Technopak Analysis, Industry Estimates Organized)Retail)Penetraon)across)Categories) Regula7ons,!Investments!!&!constraints!!?!Indian!Retail! 25% 22% Low!penetra7on!in! 20% Food!&!Grocery!! !  Automa7cFDIapprovalinRealEstate 15% 12% 9% 8% segment!! 10% 5% 3% !  GovernmentreleasingunusedlandforRetail 5% 2% 1% 1% Food!&!Grocery!acts! as!major!crowd!puller! !  ForeignretailersmanagingFDIrestric7onsthrough 0% Ho el ra od erv b ry Bo Clo ar y M es He &G ices Je usic Du y& Fo alS me s& i n g franchising, cashandcarry storesandstrategic ut th roce bl e ok th ea r w ot w partnerships Fo & ic al ed M !Wednesday 18 July 12
  8. Basics # 2 : Simplify • Focus on key theme / message of your pitch • Yes we know you are Dr Who but still Do NOT dump data without connecting stories • Be relevant and focusedWednesday 18 July 12
  9. Basics # 3 : If you got it, flaunt it Data / Metrics Poetry • We are focussed on • 100,000 downloads acquiring leadership in Vs • 10 Beta clients our chosen space with given blah .. blah blah • Product demo working • Yada yada yada • data and data Data/ Metrics get attention and keep discussion focussedWednesday 18 July 12
  10. Beyond Basics: The key ingredients ?Wednesday 18 July 12
  11. # Your Big Idea • Is it a good pain point? • Your solution : better, faster , cheaper !!! How? • Demonstrate your advantage in Metrics - better faster VC s prefer clear definable advantages rather than leap of faith statementWednesday 18 July 12
  12. # Market Opportunity • Is it scalable? 0, 10 or 1000 million opportunity • Market estimation? (Calculate the TAM (top down), SAM (bottoms up)) ~ for a pizza player whole city can be market(TAM), however SAM will be neighbourhood • Who are going be to your competitor • Clear differentiation / winning strategy vis a vis competitor VCs love large markets or scalable opportunities compared to super niche segmentsWednesday 18 July 12
  13. # Validation? • Concept or Prototype? - demo Changamal & Sons Pizza in product or website done? NOIDA : TAM ~ Whole Delhi • Constraint analysis ( supply side or SAM ~ size and reach of delivery team demand side?) Constraint ~ capacity of ovens / no • Any trial or user validation? Growing of delivery bikes like a weed? Competition : In your vicinity / outsiders Validation : already being served or still working out recipe An idea with a demo is clear winner compared to a concept noteWednesday 18 July 12
  14. # Team • Is right team with right skills in place - Nerds in a tech startup or suits with coding outsourced? • any traces of entrepreneurship? • Any signs of passions - or its yada yada excel sheet with dollops of what Mckinsey / Gartner or some other said • Chemistry or marriage of convenience (team for deals) VCs love passionate teams with strong convictions and core complimentary skillsWednesday 18 July 12
  15. # Execution Execution ! Execution & Execution - Marketing budget vs Marketing innovations - Google Adwords or word of mouth - Core tech or elance / Odesk - Insane consumer delight or also ran! - Recruitment through network or executive search firm An Startup is all about execution - street fight than some fancy board room strategy - Show signs of execution capabilitiesWednesday 18 July 12
  16. Is it a VC opportunity? • Life Style business vs Scalable/ Exit-able business • Tech for Tech sake or clear cut business opportunity ( Is it Higgin Boson or got pot of gold?) • Any relevant stories in other market demonstrating value of the opportunity • Grant or VC investible opportunity • VCs investment is neither one night stand nor life time commitment. Its a medium term engagement with strong pre-nup which is expected to make both parties very rich (at least in theory) VC investments are focussed for limited time period with exit in mind. Demonstrate clear cut exit options and NO buy backs ideas don’t flyWednesday 18 July 12
  17. This doesn’t impress me much !! • We are being conservative with our nos • We are looking for USD 5 / USD 10 million • Couple of VCs are interested!! • We are negotiating a large contract .. • Chinese maths • We do not need money right now, but ... • Only exit option in consideration is share buy backWednesday 18 July 12
  18. Perfection is achieved not when there is nothing to add, but when there is nothing left to take away - Antoine de saint - ExuperyWednesday 18 July 12
  19. Further Reading! • Death by Power point http://www.slideshare.net/thecroaker/death-by-powerpoint • The 10/20/30 rule of power point http://blog.guykawasaki.com/2005/12/the_102030_rule.html • How to pitch to a VC http://www.slideshare.net/dmc500hats/how-to-pitch-a-vc-aka- startup-viagra-how-to-give-a-vc-a-hardonWednesday 18 July 12
  20. Thank You Shailesh Vickram Singh t ~ @svickram w ~ fringenotes.inWednesday 18 July 12

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