VC

1. Getting angel/VC funding
for your venture
________________________________________________
Prajakt Raut - founder

2. Prajakt Raut – founder Applyifi.com
• Previously the Asia Director of TiE (2004 – 2007) – helped overseaas investors connect
with startups in India
• Was head of operations of the Indian Angel Network, one of the largest angel investor
groups in the world
• Deep experience and connects in the Indian entrepreneurial eco-system
• Personal goal is to encourage and assist a 100,000 people to become entrepreneurs
• Founder of The Hub for Startups – a well-respected blog for startups
• Started a printing business at when he was 17, and later was founding member of a
CRM solutions company
• Prajakt has spent over 10 years in the advertising industry with agencies like Grey,
Capital and DMB&B
• Co-founded Orange Cross, a healthcare services company

3. About Applyifi
______________________________________________________
Applyifi helps startups create an elegant,
comprehensive online pitch deck.
Investors can filter deals using our
36 point scorecard that evaluates
applicants on key criteria to assess the
opportunity
www.applyifi.com

4. 3 key messages_______________________________________________________________________
__
1. Multiple funding options exist
2. Different types of investors invest at
different stages of a venture
3. Building a great business is not the
same as having a great idea or a great
product or a great service

5. Several options to fund your
1. Crowd-funding
2. Small-ticket
co-investments
3. Donors
4. Strategic
stakeholders
5. Foundations
6. Industry associations
Hobby/Passion Business
1. Debt
2. Bootstrapping
3. Strategic investors
4. Customers
5. Risk capital – angel
investors, VCs

6. Make a business plan
irrespective of what
option you choose
Today we are focusing on
business plans that are
relevant for investors

7. A Business Plan is
a useless product
But it is a
priceless process

8. Working on a
Business Plan is like
planning a journey

9. Developing a business plan
o Start with a ‘story’ - ‘See the film in your mind’
o Work out rough milestones and goals
o Think deeply of how you will implement it
o Work out the different kinds of costs… and revenues
o Start working in the excel sheet – assumptions are
critical
o Work on multiple ‘scenarios’
o Finally, articulate it into the ‘presentations’

10. What should a business plan cover?
1. Concept overview - problem - solution
2. Team
3. What is the size of the opportunity
4. What is the value proposition/positioning
5. Business model & Business Case
6. Competitive landscape
7. Operations plan overview
8. Risk factors
9. Funding needs and use of funds
10. Exit potential

11. Angel Investors &
VCs ‘buy’ shares in
your ‘company’.
1

12. But no one makes
money by buying
shares.
You make money only if you
sell the shares at a higher
price than you bought it at.

13. Angel investors and
VCs seek 10x +
return on their
investments_______________________________________________________________________________
______
Concept of valuation
2

14. Different stages of
entrepreneurship carry
different kinds of risks.
And different investors invest at
different stages.
3

15. Stage
Scale
Different stages of the venture carry different risks

16. Risks at early stage
• Concept risk
• Execution risk
• Scale-up risk

17. Risks at early stage
• Concept risk
• Execution risk
• Scale-up risk
Risks at growth stage
• Execution risk
• Scale-up risk

18. Risks at early stage
• Concept risk
• Execution risk
• Scale-up risk
Risks at growth stage
• Execution risk
• Scale-up risk
Risks at mature stage
• Scale-up risk

19. Risks at early stage
• Concept risk
• Execution risk
• Scale-up risk
Risks at growth stage
• Execution risk
• Scale-up risk
Risks at mature stage
• Scale-up risk
• Proving concept
• Jugaad
• Flexibility
• Fine-tuning offering
• Processes
• Focus
• Operational efficiencies
• Increasing profitability
• New markets/new
capabilities/new concepts

20. Angel Investors/Seed Stage
Funds

21. Venture Capitalists

22. Private Equity Funds

23. Accelerators/
Angel Investors/
Seed Stage
Early- stage VCs VCs / PEs
Investor
types
Stage of
investmen
t
Concept Risk Stage Early, Early-
Growth Stage
Growth Stage
• Rs.25 lacs to Rs. 5 cr
• Sweet spot – INR 1cr –
3cr. For investors
• Rs.20 – 50 lacs for
accelerators
• Rs.2 cr - Rs.50 cr
• Typically between
Rs.10 cr – Rs.25 cr
• Rs.50 cr +Typical
investmen
t size
Discovering
what works
Replicating at scale what
worked in a pilot.

24. What VCs look for is
evidence that something
worked AND knowledge of
what worked AND that it is
replicable.
4

25. What angel investors look
for is a set of practical
assumptions and a plan to
test those assumptions.

26. What do investors
look for in ventures
they invest in?

27. Key criteria for investors
1. Is the market large?
2. Does the venture have a reasonably strong
chance of being a dominant player?
3. Is the business case strong and will
investors get an exit?
4. Is this the team that I can bet on?

28. Your focus should be to
convince investors that
your startup is a good
investment opportunity

29. Investors look for competent and
committed teams
- Passion and deep interest in the domain
- Deep understanding of the dynamics of
the business around the concept
- Willingness and competence to
implement the concept (not just ideate) –
experience is hugely valued, if not
mandated

30. Investors look for plans with practical
milestones
But large aspirations

31. Investors look for teams
with focus in the initial
phase
Even when entrepreneurs have identified
multiple opportunities with the concept

32. Investors look for a
strong implementation
plan
“According to Gartner, the market will be USD 20 bn in 2020”
is not a reason to invest
How you will get the first 1000 users or first 2-
3 partnerships / enterprise customers is.

33. Investors seek teams
that have a clearly
identified immediate
goals and tasks
What do you need to do to launch?
What are you going to test?

34. Investors seek a plan that clearly
outlines how much funding is
required, where it will be used and
what it can achieve
You should seek from angel/early investors only as
much as you require, to go till you can attract VCs
In rare cases, the initial funding is sufficient enough
to take the startup to sustainability

35. Finally, investors
look for teams they
can trust
Be honest about risks & challenges, be open
about limitations and weaknesses
When you tell them where you need help, they
will be able to provide inputs

36. In Summary
• Investors invest in a solid business that
addresses a large market
• Investors invest in high-quality teams with
large aspirations
• Investors invest in clearly defined plans
with practical milestones
Make the investor go back feeling “What a great
concept. I think the market is large and the team
will deliver.”

37. If you liked what you
heard, tell others.
If you did not like it, tell
me.

38. About me
• Prajakt Raut – entrepreneur and
entrepreneurship evangelist
• Founder of The Hub for Startups and
Applyifi.com
• I blog on www.thehubforstartups.com
• Twitter: @prajaktraut
• Mail: prajakt.raut@applyifi.com