Startup Pitch : An insider’s guide on What do VCs want?
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Transcript of Startup Pitch : An insider’s guide on What do VCs want?
Startup Pitch : An insider’s guide on
What do VCs want?
Shailesh Vickram Singh
e: [email protected] : @svickramw : fringenotes.in
1
Wednesday 18 July 12
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
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
So what’s diff ?
Follow basics rules related to presentations
Wednesday 18 July 12
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 presentation
Wednesday 18 July 12
Hence !
• 20 minutes ~ 15 / 25 slides at max with 1 min per slide on an average
• Limited number of slides doesn’t mean
Wednesday 18 July 12
Overview
'!!!!!Company!Purpose!
!!!!!Why!Now?!2
1
The' Indian' retail' market:' 5th' largest' retail' des7na7on' globally,''es7mated'to'grow'from'the'US$'330'billion'in'2007'to'US$'420.'Modern'retail' to' increase' its'share' in'the'total'retail'market'to'22'%'by'2010.'7'billion'by'2010'and'US$'637'billion'by'2015''
• ' ' India' tops' the' AT' Kearney's' annual' Global' Retail'Development' Index' (GRDI)' for' the' third' consecu7ve' year,'maintaining'its'posi7on'as'top.'• ' 'PWC'foresees'India'to'con7nue'as'the'top'sourcing'hubs'&'most'aYrac7ve'market'for'retail'investment'• ' ' Huge' opportunity' that' lies' ahead' with' about' 97%' of' the'country�s'retail'sector'unorganized'• ' 'More'than'75%'of'the'ac7ve'internet'users'are'working'and'are' expected' to' have' busy' lifestyles' with' less' 7me' to' visit'stores'for'their'shopping.'Rising'fuel'and'gasoline'prices'• ' 'None' to' –nil_' compe77on' in' e_commerce' and' telesales' in'these'domains'
World�s first and only portal focused on automating buying, delivering of individual daily
needs including grocery, processed food, pharmacy and health consultation supported by
telesales
410' 445' 483' 524' 568' 615'
860'
15' 22' 33' 50' 74' 110'215'
2008' 2009' 2010' 2011' 2012' 2013' 2018'Total'Retail' Organized''
85%' 80%' 80%'36%' 33%' 30%' 20%' 15%' 4%'
0%'20%'40%'60%'80%'100%'
USA'
Germany' UK
'Brazil'
Russia'
Indonesia'
China'
S.Korea'
India'
'Organised'Retail' Tradi7onal'
Regula7ons,!Investments!!&!constraints!!?!Indian!Retail!
India!an!ABrac7ve!Opportunity!for!Organized!Retail!
Source: E&Y Research, World Bank 2007, Technopak Analysis, Industry Estimates
Penetra'on)of)organized)retail)
! Automa7c'FDI'approval'in'Real'Estate'! Government'releasing'unused'land'for'Retail'''! Foreign'retailers'managing'FDI'restric7ons'through'franchising,'�cash'and'carry�'stores'and'strategic'partnerships'
'!
Per'capita'income'(000�s'$)'' '44.7' '6.9' ''9.1' '1.9' '2.5' '20.0' '1.0'
Retail)market)in)India)
Low!penetra7on!at!present;!expected!to!grow!at!30%!CAGR!
'45.8' '40.1'
! Majority''future'investments'in'hypermarkets'(33%)','supermarkets'(33%).'Top'8'ci7es'to'get'~48%'share'
! Constraints'for'the'industry:'! Availability'of'Human'Resources'! Constant'innova7on'of'Supply'Chain'! Mismatch'of'Retail'Space'demand'&'supply''
'!
22%'
12%'9%' 8%'
5%' 3%' 2%' 1%' 1%'0%'5%'10%'15%'20%'25%'
Footw
ear'
Clothing'
Books'&'Music'
Jewelry'&'
Durables'
Home'
Medical'Services'
Food'&'Grocery'
Health'&'beauty'
Organized)Retail)Penetra'on)across)Categories)Low!penetra7on!in!Food!&!Grocery!!segment!!Food!&!Grocery!acts!as!major!crowd!puller!
Unlimited data on limited Slides
Wednesday 18 July 12
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 focused
Wednesday 18 July 12
Basics # 3 : If you got it, flaunt it
Poetry
• We are focussed on acquiring leadership in our chosen space with given blah .. blah blah
• Yada yada yada
Vs
Data / Metrics
• 100,000 downloads
• 10 Beta clients
• Product demo working
• data and data
Data/ Metrics get attention and keep discussion focussedWednesday 18 July 12
Beyond Basics: The key ingredients ?
Wednesday 18 July 12
# 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 statement
Wednesday 18 July 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 segments
Wednesday 18 July 12
# Validation?
• Concept or Prototype? - demo product or website done?
• Constraint analysis ( supply side or demand side?)
• Any trial or user validation? Growing like a weed?
Changamal & Sons Pizza in NOIDA : TAM ~ Whole DelhiSAM ~ size and reach of delivery team
Constraint ~ capacity of ovens / no of delivery bikes
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 note
Wednesday 18 July 12
# 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 skills
Wednesday 18 July 12
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
# Execution
An Startup is all about execution - street fight than some fancy board room strategy - Show signs of execution capabilities
Wednesday 18 July 12
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 fly
Wednesday 18 July 12
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 back
Wednesday 18 July 12
Perfection is achieved not when there is nothing to add, but when there is nothing left to take away
- Antoine de saint - Exupery
Wednesday 18 July 12
• 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-hardon
Further Reading!
Wednesday 18 July 12
Thank You
Shailesh Vickram Singh t ~ @svickram
w ~ fringenotes.in
Wednesday 18 July 12