Uploaded byManish Singhal
Deal Evaluation
The document outlines the process and criteria for evaluating deep tech ventures with the goal of creating 10x differentiated businesses. Key evaluation aspects include market readiness, scalability, competitive landscape, and financial models. Additionally, it emphasizes the importance of understanding market dynamics and suggests relying on both gut instincts and data-driven analysis in decision-making.
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Deal Evaluation
- 1. Deal Evaluation Backing Venturesin Deep Tech creating 10x differentiated businesses May 2020 Roopan Aulakh Managing Director, pi Ventures
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- 3. Evaluation Process Follow Up FirstTake 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 • Musthave 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
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- 6. Market Type Old MarketNew 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
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