The entrepreneurship events circuit has gathered extraordinary momentum in India over last 2-3 years, with platforms such as YourStory taking the lead. Events such as TechSparks, Mobisparks, e-Sparks, Edustars etc. have served as excellent platforms to hobnob with potential investors, customers, employees and collaborators.In particular, these events provide excellent opportunities to network with angel and VC investors. The coffee/ lunch/ dinner breaks are the most crucial and participating investors want to make the most of these slots, especially since majority of them rarely attend the full event. This, in turn, means that angels and VC investment professionals prowling for interesting deals are targeting maximum bang for the buck. Rather than mindless exchanging of business cards, they are looking to generate 3-4 quality ‘deal leads’ per event that they can pursue with a follow-up meeting or call afterwards.
Given this filtering psyche and the largely non-curated nature of startup events, participating angels and VCs will give about 60 secs of mindshare to each entrepreneur they meet at an event, before taking a ‘pass’ or ‘pursue’ decision in their heads. If it’s a ‘pursue’ post the 60 sec pitch, they will give another 60-120 secs to ask a few follow-up questions before closing with a desire to schedule a follow-up interaction. With this context, the 60 sec networking pitch becomes extremely critical for founders to stand out in the event horde. As an investor, I have observed that these pitches by founders tend to be off-the-cuff, unstructured, long winding and unsuccessful in communicating the macro information an investor wants to know first-up about the venture. Let’s explore a sample structure of what I think would be a killer 60 sec networking pitch –
- Start off with a 15-20 sec intro on team
“We are 2 founders – Raj and myself Mohit, both engineering batch-mates from Anna University. Raj has also done his Masters from UCLA, and has spent about 10 years in technology industry across IBM and Microsoft. I have done my MBA from MDI Gurgaon and have spent about 8 years in Sales and Marketing at P&G and Nestle”.
Every networking pitch should start off with the team background since this is the most important part of any angel/ early stage investing decision. The above structure cleverly communicates the following –
- A classic startup founding team is in place – a technology guy + a sales guy
- Both founders know each other for several years, having been batch mates in engineering
- There is good pedigree in terms of academic backgrounds and work experience in quality organizations
This positive 20 sec opening shot is what I call a ‘front foot cover drive’; it positions the team extremely strongly and communicates aspects investors want to know. The idea is to put your best foot forward by communicating the founders’ track record of excellence. You could use this structure to highlight aspects of excellence specific to your founding team – are the founders serial entrepreneurs? Did they lead large teams or build ‘first-of-their-kind’ products in their previous firms? Have they created Intellectual Property in the past? For younger founders – did they hold leadership positions in university? Or started a company while on campus? Or built a product that went viral with zero marketing? Every founding team has something ‘excellent’ about them – the opening salvo has to communicate that strongly to gain upfront mindshare of investors.
- Spend the next 15-20 secs on company/ problem being solved/ product
“Our venture, DataX, is a Big Data Software Product company focused on providing marketing decision-making intelligence to global FMCG companies. We have developed proprietary algorithms to analyze unstructured consumer data and have filed 2 patents for it”.
Here’s what an investor is hearing while you deliver the above lines –
- Big Data, a product company – all words I like! Sexy, growing, good buzz! My IC/ Partnership will love it!
- IP, patents, proprietary – differentiated, competitive advantage (high exit multiples?)
- Hmm…I heard the words ‘global’ and ‘FMCG’ – seems like a large market with deep pocketed customers
This structure smartly highlights keywords that address critical issues an investor thinks about while analyzing an opportunity – market size, global or local play, product or services, differentiated or commoditized, high or low exit multiples. The key is to highlight what’s sexy and different about your business.
- Devote the next 15-20 secs on Traction
“We currently have 15 paying customers, of which 4 are in the US. The company is presently on a $0.5mn annual revenue run rate and is gunning for $2mn revenue in FY14. We should close this fiscal with an order book of about $1mn”.
To all investors (whether angel or VC), ‘Traction is King’. Structure this part well and you will have the investor hooked,booked and cooked. The beauty of the above structure -
- Talks about paying customers; revenue beats everything else
- Mentions international traction for the wow factor
- Smartly anchors the investor on the much larger revenue run-rate number, rather than actual revenue (this could be calculated on revenue of latest month or latest quarter, depending on sector)
- The rainbow of projected revenue in next fiscal is also shown, with order book number slipped in to back it up
Your venture is pre-revenue? Don’t worry – talk about other traction proxies such as pilot deployments, un-executed order books, sales pipelines etc. (for B2B); and number of downloads, number of monthly unique visitors, repeat visitors, time spent on the product etc. (for B2C). The idea is to communicate in 20 secs that what the venture is doing works!
- Close out the last 10-15 secs with fundraising plan
“We raised a $250k angel round last year from ABC Angels and are looking to raise a $3mn Series A”.
Your ideal parting note –
- Expressing definite intent to raise capital
- Communicating the planned amount so that the investor can evaluate fit with ticket size
- Talking about existing investors (if any) to impart that extra ounce of credibility
To conclude, the objective of networking pitch is to warm up potential investors and get a serious follow-up meeting. Delivering a carefully structured 60 sec pitch will ensure that investors leave the event with your venture as their biggest takeaway.
Soumitra can be followed on Twitter @soumitra_sharma.Disclaimer The views and opinions expressed in this column are strictly personal, and not those of any organization/institution the author is or has been a part of, nor is made in any official capacity of such organization/institution, unless explicitly stated otherwise. None of the information, views and opinions in the column should be construed as business or legal advice.
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