How Do I make an investment decision?

1. HOW DO I MAKE
AN INVESTMENT
DECISION?

2. Self Introduction
2
Goal
• Hajime Hotta
• President of Cinnamon
• Founder of Innovatube (Incubator)
• Ph.D Computer Science (Artificial Intelligence)
• Experienced serial entrepreneur in Japan
• Invested in total 10 Southeast Asian startups

3. 3
My Activity
LIFE OF STARTUP
Execution is
everything
Find PMF first
(Product Market Fit)
Documentation is a
waste of time

4. 4
My Activity
US Guys say Because but in SEA
Execution is
everything
Mentors are
excellent enough
for ideas
Too many
hopeless ideas
Find PMF first
(Product Market Fit)
Hypothesis are too
unique to believe
many guys try to
verify something
just obvious
Documentation is a
waste of time
US guys are very
well trained on
presentation
too many
unacceptable
documents
Circumstances are different from US

5. 5
My Activity
SME and IDE is quite different too
STEADILY
PROFITABLE
SME
EXPONENTIALLY
GROWING
IDE
lots of
Counter-intuitive
differences

6. 6
My Activity
Lecture series for my related buddies
✓Cinnamon members
✓My portfolio
✓Innovatube members
✓SeedForAction*
companies
✓Apprentice* Members
To

7. To compose a pitch which is attractive to investors
7
Goal
Understand Investors
Compose a pitch

8. 8
Understand Investors
Compose a pitch

9. 9
Understand investors
Who Investors want to invest in?
Excellent teams with disruptive technology
to change the world

10. Investors are not evaluators
10
Understand investors
Who Investors want to invest in?
Excellent teams with disruptive technology
to change the world
Inaccurate

11. Example 1; hopeless conversations
11
Understand investors
I have a concern on the real user-side demands
We can do the marketing through partnership
strategies rather than directly doing marketing.
In detail, xxx
Investor
Entrepreneur

12. Example 2; hopeless conversations
12
Understand investors
I have a concern about the expandability of
EdTech businesses to regional scale
I think it is still possible in our case because ….
Investor
Entrepreneur

13. Investors just want to find business partners
13
Understand investors
I want to collaborate
but it could be too risky
Investor
Investor

14. Only two factors which can convince investors
14
Understand investors
I want to collaborate
but it could be too risky
Investor
Investor
(1) The team and the field
are my favourite
(2) I can imagine the next
round fundraise

15. The team
15
Understand investors

16. Team Preference depends
16
Understand investors
Team
Preference
Common
Entrepreneurial
Tendency
Chemistry
Depends on Investors
A likes tech geeks
B likes detail-oriented guys
C likes hyper risk takers
D likes crazy visionalist…
etc.
Observable common natures
- Fact Oriented
- Hard work
- Responsive
- Ability to attract talents
- Product/UX Oriented
- Fail-first minded

17. Serial Entrepreneurs can perfectly behave as entrepreneur
17
Understand investors
Depends on Investors
A likes tech geeks
B likes detail-oriented guys
C likes hyper risk takers
D likes crazy visionalist…
etc.
Observable common natures
- Fact Oriented
- Hard work
- Responsive
- Ability to attract talents
- Product/UX Oriented
- Fail-first minded

18. Investors don’t like ambiguous broad vision
18
Understand investors
Your whole visions…
what is it???
Growth
Hack
Marketing
Product Current Product is
just a part of the vision
Know a lot about
techniques
Tagline
Product description is
a part of marketing
tactics

19. Should respect marketing message on top
19
Understand investors
Marketing Message*
Features
Concise, attractive
value proposition
(one sentence)
Operation
All the features has to be
100% consistent
Operation also has to be
consistent with the
marketing message
*Marketing message = Unique Value Proposition

20. Example of non-product-oriented communication
20
Understand investors
I have a concern on the real user-side demands
We can do the marketing through partnership
strategies rather than directly doing marketing.
In detail, xxx
Investor
Entrepreneur
Product
Concern
Doesn't
sound
product
oriented

21. 21
My Activity
2016’s new challenge (Innovatube)
Apprentice Program
‣ Exclusively for Entrepreneurial Engineer
‣ To acquire startup-focused business skills to be CEO
‣ No excellent business idea required: deadline: 4th May