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How to pitch your startup to investors: The Dos & Don'ts

Some entrepreneurs feel hesitant on approaching an external party for money while others don’t trust partnering a VC or angel investor fearing loss of control. A startup panel clears the air....

August 24, 2017 / 07:37 PM IST
(Image: Shutterstock)

(Image: Shutterstock)

Several entrepreneurs in India find themselves clueless when it comes to the art of pitching a business idea to an investor.

Some feel hesitant on approaching an external party for money while others don’t trust partnering a VC or angel investor fearing loss of control.

A lot of questions arise in their mind as to the valuation, negotiation, conflicts and handling rejection by the investors.

At a panel discussion organized at Lufthansa Startup Expo this week hosted by Sunil Goyal, managing director and fund manager of YourNest, a panel gave advice to the entrepreneurs on the art of pitching.

The panelists in this discussion were Padmaja Ruparel, co-founder of Indian Angel Network, Deep Bajaj, founder of Peebuddy, Nidhi Agarwal, CEO of Kaaryah Lifestyle Soultions, Sagar Daryani founder and CEO of Wow Momos.

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The panel discussed memorable startup pitches of their lifetime and the mistakes entrepreneurs make while pitching.

Here are some advices from the panels to the entrepreneurs on how to pitch their ideas.

How to pitch right

Padmaja Ruparel of IAN said that pitching is an art and the pitch can only continue if you engage your audience in the first 60 seconds. The first minute of pitching should have three Ps:

Product- What is the product? Why is it necessary and what is its revenue generation model?

People- Who are the people behind the company? Why they are the best people to incorporate that?

Passion- Why this idea alone is your passion? It should be this and nothing else you want to do in life.

She said investors look out for these three Ps before investing in a company.

After this pitch, comes a step further explaining the market penetration strategy, accounting, and cash flow.

For an entrepreneur the basic pitch should be about 3Ps, she added.

Sunil Goyal of YourNest said all it matters is the problem you are solving, investor don’t need your bio data.

He said that often investors wait patiently for even up to 18-24 months and watch an entrepreneur, before deciding to invest.

Goyal added that if the investor is chinning you and love your pitch then their cheque book is ready for you. It doesn’t work if you keep following up. It won’t affect that much as the pitch you give in the particular moment.

Rahul Narvekar of Scale Ventures said that authenticity in first 60 seconds is all it takes.

Sagar Daryani of Wow Momos said that the product quality and the taste worked for his pitch. He never gave a slideshow presentation of his business. He used to carry his product (momos) when he pitched his ideas to the investors.

Daryani added that he approached to investors only after he started several stores around the country.

“My investors were willing to invest in me because of the word of mouth publicity which is the biggest kind of push in the advertising,” he added.

Sagar also added that one should focus on the excellence of the product.

“Once you are a strong brand and there is a demand of your product then you are bound to get the money from the investors. One should focus on product and innovation and building a brand that is aspirational besides a loyal team,” he said.

Deep Bajaj, founder of PeeBuddy said that though his product was complicated and in the women health and hygiene market, he didn’t give up and worked behind his idea and innovation.

Handling conflict with investors on business idea

Padmaja Ruparel said that many entrepreneurs come with the planned thoughts when they pitch themselves.

“But they don’t think about the contradictions or conflict that happens between them and the investor.”

The conflict between the investor and entrepreneur is very useful to because it gives them an opportunity to present their viewpoint or strategy behind the business.

Secondly they need to have an acceptance of a rejection or ‘Let me think about it’ statement by the investor.

Rahul Narvekar said that how they handle the contradicting views is important. If an entrepreneur takes this opportunity to defend and why he believes that his product is the best product that says a lots about them.

“One should listen to the investors when you pitch the idea,” Sagar Daryani said. Avoid getting into an argument with an investor during a pitch, he added.

Follow up and relationship with the investor

The panelists shared their experience where the investors said that many of the entrepreneurs came to pitch their ideas and if they failed to convince them then they stopped contacting them.

Some panelists said that a few entrepreneurs started turning a blind eye to the VCs after the fund raise which is not a good sign.

Sagar Daryani said that that he kept on messaging investors with the business plans and revenue updates even though he wasn’t able to raise funds from them. He did so just to maintain the relationship with the investor.

Sunil Goyal added that why one should maintain the relationship with the investor. Investors know people if one investor didn’t liked the idea but there will be some other investor who would definitely like it. “That can only happen if you stay in touch with the investor and build relationships,” Goyal said.

(Compiled by Sabahat Contractor)
first published: Aug 24, 2017 07:37 pm

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