We are an eight-year old company, with a user base of over 3.5 million and we closed FY 20 with a profit of Rs 15 crore. Our clients include the likes of Flipkart, Udemy, PolicyBazaar to name a few,” says Ankita Jain, founder, GoPaisa, a deal, discount and loyalty platform. Despite these stellar statistics, Jain has not yet found investors as she raises funds for the first time. “The pitch note is everything. It has to capture the right business story for the investor by highlighting data, client information and information about use of technology,” says Jain whose pitch has gone through 10 iterations in less than a month. “I have been around for eight long years, but when it comes to my pitch I still don’t think I have done justice to it,” Jain adds.
So what do investors want? Before we hop across to investors, it’s important to note that pitch notes assume the greatest significance for startups in their seed-funding round.
The Problem and its Solution
“Two things are very important in a pitch: you need to have a deep understanding of the problem you are solving and you need to understand how your target group will respond to your solution,” says Anshu Prasher, general partner, Whiteboard Capital. “You can’t solve for Bharat if you’ve not gone beyond Napean Sea or Connaught Place.” This is what prompted Sourjyendu Medda to relocate from Mumbai to Jaipur before he started up DealShare in 2018. “It was the most difficult decision of my life. I was leaving behind my eight-month old daughter. But we had to do it. It was the most important decision for our business,” says Medda, founder, CBO and CFO, DealShare, a social commerce-based deals platform offering discounts on groceries and daily-use products in Jaipur. “We developed a social commerce model, and so we had to stay in Jaipur and observe the social thread,” Medda adds. Their decision paid off as they bagged their first funding from Whiteboard in September, 2018, and since then have raised about $70 million from Matrix Partners, WestBridge Capital, Falcon Edge Capital and Omidyar Network among others.
So what makes a compelling pitch? “Clarity about the problem the product is solving and the market they are building in. Secondly, it’s important to illustrate the solution. Explaining why this specific product is the right solution,” says Siri Srinivas, principal, Draper Associates.
“Apart from the business story of the problem and the startup’s solution for it, for me the most important aspect of a pitch is the team and the founder market fit,” says Prakhar Agarwal, COO, AngelList India and founder, Adept Ventures. “It refers to the professional or life experience of the founders, from where springs the concept of the startup”.
Other investors agree.
“Founder is the only thing that matters to me otherwise I would like to see a product,” says Harpreet Grover, investor and author, Let’s Build a Company, explaining the crucial role of the founder in condensing the sectoral expertise and experience into building a business.
Telling the Business Story
“The perfect pitch is when an entrepreneur can clearly articulate their product: service, vision and where the company is headed,” says Sarika Batra, showrunner & director, Meet the Drapers.
Prasher agrees adding to the growing checklist for a startup pitch note: “Given limited time to present to a potential investor, the founder’s ability to communicate the business proposition effectively makes a big difference.”
Many investors point to Beardo and BharatPe, when it comes to clarity in communication.
“BharatPe has always differentiated itself on the product proposition. From our first pitch till date, we have maintained that we are proponents of zero per cent MDR and see lending as the only business model. This has been a significant USP,” says Ashneer Grover, co-founder & CEO, BharatPe, one of the first companies to consolidate QR codes on UPI to give merchants the advantage of one code.
“It is very important to know your USP as you find the gap in your category and make that your entry point,” says Ashutosh Valani, founder, Beardo. “For us the pitch was everything. There was no data or market research for our business. Communication of our USP and our confidence helped us with our early-stage investors”. As the name suggests, Beardo, a men’s grooming startup burst into the cluttered Indian personal care market in 2015, to make its mark in a niche market of the bearded man. Five years later, it was acquired by FMCG-major Marico.
But this journey wasn’t without rejections.
“When you create a new category, acceptance and trust are low,” says Valani raising the critical question about the importance of a unique idea.
Most investors agree that more than the uniqueness of an idea a clear roadmap of execution wins pitch-battles.
“A great pitch is concise and exciting! The best pitches I’ve heard clearly explain the problem, solution, why they’re the team to do it and have a BIG vision for the future,” sums up Katie Russel, co-founder of Draper Startup House.
A word of advice for Ankita Jain of GoPaisa: “Investors view startups as seeds. They will invest if they think this seed will grow,” says Grover.
Meet the Drapers is a groundbreaking Silicon Valley entrepreneurial show where the Draper Family hunts for the next billion-dollar idea and the viewers get to invest in their favorite companies! To learn more about Meet the Drapers, go to www.MeetTheDrapers