This text was first revealed on December 14, 2021.
It’s at all times 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 nearly) with traders and current what you are promoting stay ample. 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 identical to many issues in life, the worst factor that we will do is make assumptions.
For this reason we ask Leung Pui Yan (Government Director at Vertex Ventures Southeast Asia & India), Abhijit Banerjee (Basic Associate & Managing Director at Decacorn Capital), and Eko Kurniadi (Associate atAlpha JWC Ventures) to share their worthwhile insights on how pitching periods with VC might be like. This contains particulars such because the questions that they’ll ask, one of the best ways to reply them, and most significantly, how one can finest put together for a pitching session.
Ensure you learn this earlier than going to that assembly.
Preparing for a pitching session
Earlier than we will put together to attend a pitching session, you will need to know what’s going to sometimes occur in these conferences. The method might differ between completely different VC companies, however as you could discover quickly, there are some similarities.
As Banerjee explains it, the method sometimes concerned a gathering with founder or co-founders which occur nearly over video calls because of COVID-19 restriction measures.
So as to add extra particulars in regards to the course of, Leung elaborates on how the method is being run at Vertex.
Additionally Learn: Pitching from house: get traders’ consideration in a digital world
“Sometimes, I’d invite the founders to spend 15-20 minutes or so giving an outline about their startups and their backgrounds. Ideally, the founders would have shared a teaser deck to supply some context in regards to 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 go away the final couple of minutes for the founders to ask me any questions they could 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 staff.
“The hearts and minds behind the corporate are crucial to us. We like to know what introduced the founding staff collectively, what impressed the answer to the issue they’re attempting to resolve, and what offers them the sting and benefit to deliver it to life,” says Kurniadi.
“Subsequent, it might be in regards to 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 knowledge factors on unit economics, monetisation and use of proceeds. In the end, we search to know 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 might 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 staff 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 test and do a little analysis on the VCs they’re pitching to. This helps them to ask acceptable inquiries to the VCs too; this typically creates a superb impression on the VCs.”
In the meantime, Kurniadi stresses the significance of getting an efficient assembly.
“The best and productive conferences are kicked off with a concise clarification of what the founder’s mission and resolution are. These two must 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 help of their storytelling, founders ought to put together supplies to visualise key business statistics, commercials and future use of proceeds.”
The large three questions
When requested in regards to the prime three most essential 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 remedy it, and what makes their options distinctive
- Product-market match, advertising and marketing and monetisation plan
- Cap desk and founders’ possession stakes
Based on Leung, “… these questions will assist us perceive how founders’ views in regards to the total market alternative and aggressive panorama on a excessive stage. On the opposite, the questions can even make clear the product and go-to-market methods, in addition to the attainable execution dangers concerned in pursuing them.”
The traders additionally put a powerful emphasis on founders to again up their pitch with paperwork and knowledge.
“For instance, a transparent cap desk exhibiting the founders and key staff stakes and dilution did with different traders. They need to put together an information room and be able to open it to potential traders or VC,” Banerjee says.
He additionally offers an essential notice 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 carried out,” 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 best basis for a long-lasting and impactful partnership between us and the founders. The most effective founders couple their ardour for the trigger with sound knowledge factors on the business, a deep understanding of their enterprise technique and key figures, and an unwavering want to resolve the issue,” he says.
Widespread errors to keep away from
Generally, 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 typically do, ranging from the best way 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 realize them,” Leung lists down the problems.
Banerjee warns in regards to the firm’s funding historical past. “Founders typically increase early cash from angels, associates, 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 opponents, clients and different stakeholders are areas that founders ought to have sound data on too,” he stresses.
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The article was first revealed on April 29, 2023.
The submit Pitching 101: Questions that VCs will ask you throughout a pitch session appeared first on e27.