It’s at all times good to be ready, particularly when you will a pitching session with a possible investor –a course of that may both make or break your fundraising journey.
Even through the pandemic, alternatives to take a seat down (probably just about) with traders and current your corporation stay considerable. For the newbies amongst us, this course of would possibly really feel like being shrouded in thriller. Even the extra seasoned entrepreneurs would possibly wish to hear extra about how they’ll enhance their abilities.
However similar to many issues in life, the worst factor that we are able to do is make assumptions.
For this reason we ask Leung Pui Yan (Govt Director at Vertex Ventures Southeast Asia & India), Abhijit Banerjee (Normal Companion & Managing Director at Decacorn Capital), and Eko Kurniadi (Companion atAlpha JWC Ventures) to share their precious insights on how pitching periods with VC will likely be like. This consists of particulars such because the questions that they’ll ask, the easiest way to reply them, and most significantly, how one can finest put together for a pitching session.
Be sure you learn this earlier than going to that assembly.
Preparing for a pitching session
Earlier than we are able to put together to attend a pitching session, you will need to know what’s going to sometimes occur in these conferences. The method could range between completely different VC companies, however as chances are you’ll discover quickly, there are some similarities.
As Banerjee explains it, the method sometimes concerned a gathering with founder or co-founders which occur just about over video calls because of COVID-19 restriction measures.
So as to add extra particulars concerning the course of, Leung elaborates on how the method is being run at Vertex.
Additionally Learn: Pitching from dwelling: The right way to get traders’ consideration in a digital world
“Usually, I might invite the founders to spend 15-20 minutes or so giving an summary about their startups and their backgrounds. Ideally, the founders would have shared a teaser deck to supply some context concerning the alternative forward of the session,” she begins.
“After the preliminary overview, the remainder of the time would normally be used for Q&A to dive into particular areas that I want to additional make clear. I might additionally depart the final couple of minutes for the founders to ask me any questions they might have.”
At Alpha JWC Ventures, the preliminary stage of pitching could be an introductory name with the founder(s) to search out out the corporate’s mission and get to know the group.
“The hearts and minds behind the corporate are crucial to us. We like to grasp what introduced the founding group collectively, what impressed the answer to the issue they’re making an attempt to resolve, and what offers them the sting and benefit to convey it to life,” says Kurniadi.
“Subsequent, it might be concerning the enterprise itself. We make investments time to study their journey –what are the important thing milestones, headwinds and tendencies about their enterprise. At this stage, discussions are sometimes supplemented with information factors on unit economics, monetisation and use of proceeds. In the end, we search to grasp how far they’ve are available in reaching their targets and the worth they’ve created for stakeholders.”
The method will culminate with a dialogue on how a partnership with the VC agency may also help the startup obtain its mission –past simply securing funding.
When requested about what founders ought to put together earlier than attending the assembly, the VCs offered three completely different solutions.
“Founders needs to be ready to debate the group profile, aggressive panorama, product roadmap, present traction and future enterprise projections, in addition to funding wants and use of funds,” says Leung.
Banerjee reminds us that each VC has its personal distinction –and founders ought to concentrate on it earlier than they attend pitching. “Founders ought to do a really thorough background test and perform some research on the VCs they’re pitching to. This helps them to ask applicable inquiries to the VCs too; this usually creates a superb impression on the VCs.”
In the meantime, Kurniadi stresses the significance of getting an efficient assembly.
“The simplest and productive conferences are kicked off with a concise clarification of what the founder’s mission and resolution are. These two have to be delivered with readability and conviction,” he says.
Additionally Learn: 4 methods to spice up your preparation for a startup pitching competitors
“Founders ought to have a strong elevator pitch that may make an impression on a busy viewers who hear many pitches each day. To assist of their storytelling, founders ought to put together supplies to visualise key trade statistics, commercials and future use of proceeds.”
The large three questions
When requested concerning the prime three most necessary questions that VCs will ask founders throughout pitching, the traders share a number of factors in widespread:
The issue that they’re aiming to resolve, how they’ll resolve it, and what makes their options distinctive
Product-market match, advertising and monetisation plan
Cap desk and founders’ possession stakes
Based on Leung, “… these questions will assist us perceive how founders’ views concerning the general market alternative and aggressive panorama on a excessive degree. On the opposite, the questions will even make clear the product and go-to-market methods, in addition to the doable execution dangers concerned in pursuing them.”
The traders additionally put a robust emphasis on founders to again up their pitch with paperwork and information.
“For instance, a transparent cap desk exhibiting the founders and key staff stakes and dilution did with different traders. They need to put together a knowledge room and be able to open it to potential traders or VC,” Banerjee says.
He additionally offers an necessary word about non-disclosure agreements (NDAs).
“Founders shouldn’t ask VCs to signal NDAs as a result of within the startup world there are a whole lot of comparable fashions … therefore, VCs hesitate to signal NDAs until there’s a actual want to take action and that there’s a very deep due diligence being performed,” he continues.
Lastly, Kurniadi stresses the significance of 1 key facet of the founders-investors relationship: authenticity.
“Authenticity is a key element in constructing the precise basis for a long-lasting and impactful partnership between us and the founders. The perfect founders couple their ardour for the trigger with sound information factors on the trade, a deep understanding of their enterprise technique and key figures, and an unwavering need to resolve the issue,” he says.
Frequent errors to keep away from
Typically, it’s simpler to be taught by understanding the issues that we must always keep away from doing –as an alternative of simply the issues we must always do.
On the subject of pitching, there are completely different sorts of errors that founders usually do, ranging from the way in which they current their pitch.
Additionally Learn: How ought to founders costume when pitching your startup to a VC?
“Not demonstrating robust conviction for his or her companies, poor articulation of how the startup is completely different from others, not having a transparent view of future key milestones and funding necessities to attain them,” Leung lists down the problems.
Banerjee warns concerning the firm’s funding historical past. “Founders usually increase early cash from angels, mates, household and dilute themselves loads even earlier than they increase VC cash,” he says.
Kurniadi closes by stating probably the most basic errors of all of them: coming in unprepared.
“Founders ought to anticipate to be challenged and be ready to defend their place with conviction. Info on rivals, clients and different stakeholders are areas that founders ought to have sound information on too,” he stresses.
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Picture Credit score: 123RF
This text was first printed on December 14, 2021.
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