how to present your business plan to investors

www.thehubforstartups.com

How to present a business plan to investors

Prajakt RautCo-founder - ApplyifiFounder – The Hub for Startups


Different investors invest in different stages of a startup.


Angel Investors Seed-stage funds/ Early- stage VCs VCs / PEsInvestor

types

Stage of investment

Concept Risk Stage

Early-Growth Stage

Growth Stage

• Rs.25 lacs to Rs. 5 cr

• Sweet spot – INR 1cr – 3cr.

• Rs.2 cr - Rs.50 cr

• Typically between Rs.10 cr – Rs.25 cr

• Rs.50 cr +Typical investment size


Your focus should be to convince investors that your startup is a good investment opportunityUnless you can convince them that your startups will create value, investors will not be interested

Path to profitability – at scale – is preferred over quicker profitability on smaller scale – they are playing for higher valuation

(Early stage investors will look for 8 – 10x returns in about 3 – 5 years)


Key criteria for investors

1. Is the market large

2. Does the concept/product have a

reasonably strong chance of being a

dominant player

3. Is this the team that can do it


You till typically get about 20 - 30 minutes for your presentation

Keep half the time for presentation and half for Q&A

“Show the dish. Don’t detail the recipe.” – the objective of the first presentation should not be to share details but to excite the investor to meet you again for details

Don’t state the obvious – focus on things that most people are not likely to know e.g. when presenting about a solar energy business, data on how renewable energy is important is not necessary. Most people get it.


Investors look for the business around the

concept or product or service. Hence, in your

pitch, cover :- What are you going to do – concept, customer segment, biz

model

- How are you going to make money – business case

- The size of the opportunity – potential

- How are you going to do it – implementation plan

- Current status

- Who’s behind this - team

- Competition & Risk factors

- How much money do you need and what will you use it for

- Exit Options


What do investors look for?


Investors look for competent and committed

teams

- Passion and deep interest in the domain

- Deep understanding of the dynamics of the

business around the concept – who will buy,

why will they buy, challenges, etc.


Investors look for plans with practical

milestones

But large aspirations


Investors look for teams with focus in the

initial phase

Even when entrepreneurs have identified multiple

opportunities with the concept


Investors look for a strong implementation

plan

“According to Gartner, the market will be USD 20 bn in

2020” is not a reason to invest

How you will get the first 1000 users or first 2-3 enterprise

customers is.


Investors seek teams that have a clearly

identified immediate goals and tasks

What do you need to do to launch?

What are you going to test?


Investors seek a plan that clearly outline how

much funding is required, where it will be

used and what it can achieve

You should seek from angels only as much as you require

to go till you can attract VCs

In rare cases will angel funding be sufficient to take the

startup to profitability


Finally, investors look for teams they can trust

Be honest about risks & challenges, be open about

limitations and weaknesses

When you tell them where you need help, will they be

able to provide inputs


In Summary

Investors invest in a business case around

products/services that address large markets

Investors invest in high-quality teams with large

aspirations and who have a clear understanding of what it

will take to achieve the potential

Investors invest in clearly defined plans with practical

milestones

Make the investor go back feeling “What a great concept.

I think the market is large and the team will deliver.”


Prajakt Raut

Entrepreneur and Entrepreneurship Evangelist

Mail : [email protected]

Blog: www.thehubforstartups.com

Quora: www.quora.com/Prajakt-Raut

Co-founder - ApplyifiFounder – The Hub for Startups

how to present your business plan to investors

Business

cr rs

different investors

growthstagegrowth stage

typical rs

money business case

cr sweet spot inr

great concept

large aspirations andwho