This text was first revealed on December 14, 2021.
It’s all the time good to be ready, particularly when you’ll a pitching session with a possible investor –a course of that may both make or break your fundraising journey.
Even throughout the pandemic, alternatives to take a seat down (most certainly just about) with traders and current your small business stay plentiful. For the newbies amongst us, this course of may really feel like being shrouded in thriller. Even the extra seasoned entrepreneurs may wish to hear extra about how they’ll enhance their expertise.
However similar to many issues in life, the worst factor that we are able to do is make assumptions.
This is the reason we ask Leung Pui Yan (Government Director at Vertex Ventures Southeast Asia & India), Abhijit Banerjee (Common Associate & Managing Director at Decacorn Capital), and Eko Kurniadi (Associate atAlpha JWC Ventures) to share their priceless insights on how pitching classes with VC will probably be like. This contains particulars such because the questions that they are going to ask, one of the simplest ways to reply them, and most significantly, how one can finest put together for a pitching session.
Be sure to 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, it is very important know what is going to sometimes occur in these conferences. The method might fluctuate between completely different VC companies, however as it’s possible 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 as a result 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 home: How to get investors’ attention in a virtual world
“Usually, I’d 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 wish to additional make clear. I’d 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 crew.
“The hearts and minds behind the corporate are crucial to us. We like to grasp what introduced the founding crew collectively, what impressed the answer to the issue they’re making an attempt to unravel, 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 traits 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 reaching their objectives and the worth they’ve created for stakeholders.”
The method will culminate with a dialogue on how a partnership with the VC agency may 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 crew 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 pay attention to it earlier than they attend pitching. “Founders ought to do a really thorough background verify and do a little analysis on the VCs they’re pitching to. This helps them to ask acceptable inquiries to the VCs too; this usually creates a great 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 answer are. These two must be delivered with readability and conviction,” he says.
Additionally Learn: 4 ways to boost your preparation for a startup pitching competition
“Founders ought to have a robust elevator pitch that may make an impression on a busy viewers who hear many pitches every day. To help of their storytelling, founders ought to put together supplies to visualise key business statistics, commercials and future use of proceeds.”
The massive 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 unravel, how they’re going to 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 total market alternative and aggressive panorama on a excessive degree. On the opposite, the questions can even make clear the product and go-to-market methods, in addition to the potential 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 workers 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 mustn’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 part 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 business, a deep understanding of their enterprise technique and key figures, and an unwavering want to unravel the issue,” he says.
Widespread errors to keep away from
Generally, it’s simpler to study by understanding the issues that we should always keep away from doing –as an alternative of simply the issues we should always do.
In relation to pitching, there are completely different sorts of errors that founders usually do, ranging from the best way they current their pitch.
Additionally Learn: How should founders dress when pitching your startup to a VC?
“Not demonstrating sturdy 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 realize them,” Leung lists down the problems.
Banerjee warns concerning the firm’s funding historical past. “Founders usually increase early cash from angels, buddies, household and dilute themselves rather a lot even earlier than they increase VC cash,” he says.
Kurniadi closes by stating essentially 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 data on too,” he stresses.
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