How will the investors react to my idea, will they like it? An entrepreneur in his early-twenties asked me this question just before the start of VC Corner organised on the last day of MobileSparks 2015, YourStory’s mobile tech focused startup event.
This is just one of the questions that troubles young founders who have just launched a startup or are working on an idea when they need to meet an investor.
VC Corner was organised to help such entrepreneurs meet multiple investors and get feedback from them in an informal and ‘safe’ setting.
At the start of the session, a roomful of founders crowded around SAIF Partners’ Managing Director Alok Goel, Chairman of Frictionless Ventures Ravi Gururaj and Director of Inventus Capital Rutvik Doshi. The trio fielded questions ranging from what sectors interest them to how a founder should pitch to them.
Alok said entrepreneurs would lose his interest if they send emails stating they have created the most revolutionary tech product. “Keep your pitch short and precise,” was his advice.
Rutvik said most founders forget something as basic as the fact that landline numbers are listed on the websites of the funds. “If you just dial up and ask for Rutvik, chances are you will get connected to me,” said Rutvik, who was an entrepreneur before becoming a venture investor.
The three investors had to leave after half-an-hour for a panel discussion, but VC Corner was by no means done. Rahul Chowdhri, Partner at Helion Ventures, Sahil Kini, Vice President at Aspada Investment Advisors, Pratik Poddar, an Associate at Nexus Venture Partners, Harshjit Sethi, an Associate at Sequoia Capital, Veena Avadhanam, Investment Head of Mumbai Angels, Rajiv Raghunandan, founder of SeedX, Atulya Bhat of Matrix Partners and Rijul Jain, Investment Advisor at Mitsui Global Investment, India, took their seats at various tables in the room. Small groups of startup founders moved from table to table to spend time with each of them.
Many founders were able to make elevator pitches to the investment professionals in the room and get their reactions. The investors questioned the founders closely on matters like their business model to go-to-market strategy. "It was a great platform for me to meet companies with variety of ideas and young entrepreneurs with lot of passion," said Helion’s Rahul, who was constantly surrounded by a group of entrepreneurs throughout the almost two-hours that he spent at VC Corner. He added:
I also liked the informal nature of interactions since it allows audience to be more open with what they have in their minds.
Rahul, who works closely with such Helion portfolio companies as Bigbasket, Livspace, Shopclues, Simplilearn, and Toppr, was able to point out gaps in business models and also help founders figure out the right time to pitch to investors.
Entrepreneurs, on their part, said VC Corner gave them a chance to meet senior investors like Rahul whom they otherwise would not have been able to meet so easily. “It was easier to get a feel of whether the investors would be interested in a startup like mine in an informal setting like this,” said Vaibhav Shinde, who creates robotics courses and kits through his startup Hobby Bobby. He said some of the questions made him realise his startup might be too niche.
My co-founder and I are already thinking of expanding our range. The conversations have helped us expand our horizons.
Rajiv of SeedX, a platform that helps startups raise angel funding, said entrepreneurs were keen on understanding the dynamics of fund raising, the structure and process. His most valuable advice:
Don’t raise funds if you don’t need it; valuation conversations are highly overrated, simplify them and move on.
Pranav Manpuria, Founder of mobile-based payment solution startup Cocoapay, said the questions the investors asked helped him think differently. “For instance I was asked if your competition does 'X’, how will you respond,” said Pranav. “They see so many startups and they know the right questions that we don’t know.”
VC Corner was useful for investment professionals too. Said Mitsui’s Rijul:
It was a power packed session where we were able to communicate with lots of companies in different verticals in just two to three hours, so it was a great time utilization.
Key lessons from VC Corner
- Focus on solving one problem. Laser-sharp focus on a single problem is always preferred in the beginning.
- Don’t raise funds if you don’t need it.
- Valuation conversations are highly overrated, simplify them and move on.
- Keep your pitch sharp and to the point. Do not indulge in hyperbole.
- One investor might not like your idea, but another might. So reach out to multiple investors.