Presentation used for my talk organized by Nurture Talent Academy (20th may 2011)

1. What do investors look for in an
business plan investment?
The 10 golden rules
20th May 2011
Ankur Gulati, Draper Fisher Jurvetson
agulati@dfj.com | @vc_in_india | +91-80-67823900
CONFIDENTIAL AND PROPRIETARY
OPINIONS EXPRESSED IN THIS PRESENTATION ARE THAT OF THE AUTHOR AND NOT DFJ

2. Contents
▪ About DFJ
▪ The 10 golden rules
▪ QnA
© Ankur Gulati, Draper Fisher Jurvetson | 1

3. Contents
▪ About DFJ
▪ The 10 golden rules that “usually” hold
– 5 related to team, mindsets and culture
– 5 related to business idea and market
▪ QnA
© Ankur Gulati, Draper Fisher Jurvetson | 2

4. 1 Top-team is more important than the idea a.k.a. what use is a washing
machine without electricity?
IDEA
Description
▪ Esp. in markets where the
“devil is in execution” (e.g.,
India)
▪ Is an important valuation
driver – contrary to what
entrepreneurs might
believe
TEAM
© Ankur Gulati, Draper Fisher Jurvetson | 3

5. 2 Know what you know and what you don’t know a.k.a. there’s
no shame in flunking 1 out of 5 exams
Description
▪ “Must-have” attitude for
today’s entrepreneurs
▪ Will determine how
founders are able to drive
a firm in a rapidly changing
environment
▪ Not every ball will be hit
out of the park (unless
you’re Chris Gayle), but
investors want you to be
able to adapt and give it
your best shot
© Ankur Gulati, Draper Fisher Jurvetson | 4

6. 3 Solve problems, don’t problem-solve a.k.a. just do it
Description
▪ Rate of innovation is much
faster today than it was
before
▪ Need people who can
solve problems (beg or
borrow, no stealing) and
get it done rather than
strategize endlessly
▪ Especially true in
peripheral functions – e.g.,
mid-level/low-level
manager recruitment
© Ankur Gulati, Draper Fisher Jurvetson | 5

7. 5 Metrics will deliver improvement insights a.k.a. “friend” the
numbers
Description
▪ While “analysis paralysis”
is not productive, it is
important to have a tab on
key metrics for your
business
▪ Perspectives matter.
Look at the metrics from
different perspectives.
Insights will come jumping
out.
© Ankur Gulati, Draper Fisher Jurvetson | 6

8. 6 Aim to be a rock-star a.k.a. the tyranny of the in-betweens
Investors Description
Entrepreneurs
▪ Why do investors repeat
the following rhetoric:
“Think big”?
▪ In general, investor and
entrepreneur incentives
are not completely aligned,
this is the tyranny of the in-
betweens (or the #huh
zone)
▪ All investments must pay a
premium for the expected
future “duds” in the
portfolio
# Fail # Huh? # Win
© Ankur Gulati, Draper Fisher Jurvetson | 7

9. 7 Important to know what your success hinges on a.k.a. cut
through the clutter
Description
▪ A 5-7 year thought process
is a must
▪ Priorities could and will
change over time, but an
“as-is” thesis of where you
will be in 5 years’ time and
how you will get there is
important
▪ Key is to think “end-
game”
© Ankur Gulati, Draper Fisher Jurvetson | 8

10. 8 Focus is usually important but not always a.k.a. work
consumer-back rather than investor-back
Description
▪ Investors love focus – this
is driven by “pattern
recognition” but
exceptions exist
▪ Chart your own course
working backwards from
the consumer. Don’t say
something just to sell to
the investor.
© Ankur Gulati, Draper Fisher Jurvetson | 9

11. 9 Have a feel for on-the-ground challenges a.k.a. the same
execution devil also resides in the details
Description
▪ You’re selling. And so you
need to convince. And so
you need to know every
single detail of the plan.
▪ You’re executing. And so
you need to know every
single detail of the plan.
© Ankur Gulati, Draper Fisher Jurvetson | 10

12. 10 Don’t go by momentum a.k.a. even turkeys can fly in high
winds*
Description
▪ Look-alikes can work, but
only in finite circumstances
▪ Momentum trading is ok,
but carving out 5 years of
your life based on
momentum is a travesty
*Credit for the line goes to Eugene Kleiner, KPCB © Ankur Gulati, Draper Fisher Jurvetson | 11

13. 11 Spend 20 % of your time building a phenomenal network a.k.a.
“meet and greet” helps Bonus Rule!
Description
▪ Building a great network
helps.
▪ Invest time and energy to
build and maintain
▪ Don’t burn any bridge! You
never know where your
next customer, investor,
supplier will come from.
© Ankur Gulati, Draper Fisher Jurvetson | 12

14. Contents
▪ About DFJ
▪ The 10 golden rules
▪ QnA
© Ankur Gulati, Draper Fisher Jurvetson | 13

15. Thank you for your patience!
Contact:
Ankur Gulati, Draper Fisher Jurvetson
Email: agulati@dfj.com
Twitter: vc_in_india
Phone: +91-80-67823900
© Ankur Gulati, Draper Fisher Jurvetson | 14