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: svs@seedfund.in
t : @svickram
w : 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?


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)


So what’s diff ?
Follow basics rules related to presentations


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


Hence !

• 20 minutes ~ 15 / 25 slides at max with 1
min per slide on an average
• Limited number of slides doesn’t mean


!  Majority''future'investments'in'hypermarkets'(33%)','
1 !!!!!Company!Purpose! supermarkets'(33%).'Top'8'ci7es'to'get'~48%'share'
World s first and only portal focused on !  Constraints'for'the'industry:'
automating buying, delivering of individual daily !  Availability'of'Human'Resources'
needs including grocery, processed food,
!  Constant'innova7on'of'Supply'Chain'
pharmacy and health consultation supported by
telesales !  Mismatch'of'Retail'Space'demand'&'supply''

2 !!!!!Why!Now?! India!an!ABrac7ve!Opportunity!for!Organized!Retail!
'
! Penetra'on)of)organized)retail)
Per'capita'income'
The' Indian' retail' market:' 5th' largest' retail' des7na7on' globally,'' (000 s'$)'''45.8' '40.1' '44.7' '6.9' ''9.1' '1.9' '2.5' '20.0' '1.0'
es7mated'to'grow'from'the'US$'330'billion'in'2007'to'US$'420.' 100%'
80%'
Modern'retail'to'increase'its'share'in'the'total'retail'market'to'22'%' 60%'
by'2010.'7'billion'by'2010'and'US$'637'billion'by'2015' 40%' 85%' 80%' 80%'
' 20%' 36%' 33%' 30%'
20%' 15%' 4%'

Overview'
Unlimited data on limited Slides
0%'
•  ' ' India' tops' the' AT' Kearney's' annual' Global' Retail'

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'Organised'Retail' Tradi7onal' Low!penetra7on!
• ' 'PWC'foresees'India'to'con7nue'as'the'top'sourcing'hubs'&' at!present;!
most'aYrac7ve'market'for'retail'investment' Retail)market)in)India)
860'
expected!to!
• ' ' Huge' opportunity' that' lies' ahead' with' about' 97%' of' the' grow!at!30%!
615' CAGR!
country s'retail'sector'unorganized' 445' 483' 524' 568'
410'
• ' 'More'than'75%'of'the'ac7ve'internet'users'are'working'and' 110'
215'
50' 74'
are' expected' to' have' busy' lifestyles' with' less' 7me' to' visit' 15' 22' 33'
2008' 2009' 2010' 2011' 2012' 2013' 2018'
stores'for'their'shopping.'Rising'fuel'and'gasoline'prices' Total'Retail' Organized''
• ' ' None' to' –nil_' compe77on' in' e_commerce' and' telesales' in'
these'domains'
Source: E&Y Research, World Bank 2007, Technopak Analysis, Industry Estimates

Organized)Retail)Penetra'on)across)Categories)
Regula7ons,!Investments!!&!constraints!!?!Indian!Retail! 25%' 22%' Low!penetra7on!in!
20%' Food!&!Grocery!!
!  Automa7c'FDI'approval'in'Real'Estate' 15%'
12%'
9%' 8%' segment!!
10%' 5%' 3%'
!  Government'releasing'unused'land'for'Retail''' 5%'
2%' 1%' 1%' Food!&!Grocery!acts!
as!major!crowd!puller!
!  Foreign'retailers'managing'FDI'restric7ons'through' 0%'
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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


Basics # 3 : If you got it, ﬂaunt it
Data / Metrics
Poetry
• We are focussed on • 100,000 downloads
acquiring leadership in
Vs
• 10 Beta clients
our chosen space with
given blah .. blah blah • Product demo
working
• Yada yada yada • data and data
Data/ Metrics get attention and keep discussion focussed

Beyond Basics: The key ingredients ?


# 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


# 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


# Validation?
• Concept or Prototype? - demo Changamal & Sons Pizza in
product or website done? NOIDA :
TAM ~ Whole Delhi

• Constraint analysis ( supply side or
SAM ~ size and reach of delivery
team
demand side?)
Constraint ~ capacity of ovens / no

• Any trial or user validation? Growing of delivery bikes

like a weed? 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

# 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

# Execution
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

An Startup is all about execution - street ﬁght than some fancy
board room strategy - Show signs of execution capabilities


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


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


Perfection is achieved not when there is
nothing to add, but when there is nothing left
to take away
- Antoine de saint - Exupery


Further Reading!
• 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


Thank You

Shailesh Vickram Singh
t ~ @svickram
w ~ fringenotes.in


Startup Pitch : An insider’s guide on What do VCs want?

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