This talk explains the broad framework for deal evaluation. It was anchored by Roopan Aulakh for the pi fellows programme. Most of the talk was an actual case study which is not part of this presentation for confidentiality reasons.

1. Deal Evaluation
Backing Ventures in Deep Tech creating 10x differentiated businesses
May 2020
Roopan Aulakh
Managing Director, pi Ventures

2. Agenda
Process
Evaluation Criteria
Case Study

3. Evaluation Process
Follow Up
First Take
Deep Dive
16.9%
6.5%
5.9%
First Call/Meeting
IC Note 1.3%
Portfolio
1%

4. Evaluation Criteria
Problem
statement
Market
Product/
Tech
TeamDefensibility
Competitive
Landscape
Scalability
• Must have vs good to have
• Validation
• Market size
• Understanding the market
• Market forces (Headwinds/
Tailwinds)
• Market readiness/timing
• Regulations
• Evolution
• Global or India
Opportunities
Risks
• IP
• AI first/second
• Data
• Differentiation
• Stage
• Product Market fit
• Expertise/Skills
• Scalability of the founders
• Passion
• Founder dynamics
• Value system
• Gaps in Founders and founding
team
• Culture
• Data moats
• Network effects
• Barriers to entry
• Switching costs
• How competitive is the space
• Alternatives
• Competitive advantage
• Sustainable advantage
• Exponential growth
• GTM and business model
• Existing traction
• Adoption potential
• Capital efficiency
• Unit economics
• Burn
• Margins
• Potential for cost reduction
• Pricing
• Financial model
Economics
Backing 10x
differentiated
businesses
• Potential acquirers
• Exit value
Exit
potential

5. Understanding the Market

6. Market Type
Old Market New Market
New Product
Old Product
Ripe for Commercialisation
Takes effort, time and
money to create a new
market
Crowded Space Business Model Innovation

7. Market Sizing
Bottomupapproach
Topdownapproach
Market
Size ($)
# in
Segment 1
Price ($)
Segment 2
$
Segment 1
$
# in
Segment 2
Price ($)
Use more than one approach
Market evolves with time - can shrink or expand
Large market (>$B)
Goal is to get the right range, rather than the exact #
TAM vs SAM
Identify relevant segment
# of potential customers
How much will the customer pay

8. The Analysis
Asking the right questions
Will not have all the answers
No deal will be green across all the criteria
Gut/instinct and conviction
Develop your own approach

9. Connecting the dots..

10. Case Study
Company Recap
Initial Thoughts
First Take
Sample IC Note

11. Team pi
Thank You!