[YS Learn] Blowhorn: How they got venture capitalist Tim Draper to invest in the team

By Sindhu Kashyaap|5th Jun 2020
Looking to raise your first round of funding? But do not know what works and what doesn’t? Here are some stories on how startups were able to clinch the deal and what were the steps they believe founders should take during fundraising. This time we cover Blowhorn.
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“Never put a video in your pitch. It doesn’t work, it always gets stuck, and you only have a small amount of time to catch the investor’s attention, a stuck video is distracting,” advises Mithun Srivatsa, CEO and Co-founder, Blowhorn, the tech-enabled logistics marketplace. 


It was the first lesson Mithun learnt while trying to woo Tim Draper, of Draper Associates, as an investor in 2017. Tim Draper is a leading venture capitalist from Silicon Valley, and has been an early investor in companies like Tesla, Skype, and SpaceX. While he clinched the deal, he has since kept his pitch presentations ‘video less’. 


Blowhorn raised $8.8 million across five rounds of funding. In 2017, the startup had raised an undisclosed amount from Tim Draper. 


Fundraising is a part of any founder’s journey. Not only does it take up a considerable amount of a founder’s time, it also is an exacting and cumbersome process. There are details like — market size, valuations, business models, product, and the list is endless. 


YS Learn: Blowhorn

Mithun Srivatsa, Co-founder and CEO, Blowhorn




“How the investor thinks is subjective to the founder. But globally, all investors look for founders they find trustworthy, and a large enough market,” says Mithun. From his learnings, here is what Mithun advises founders to do:


Sleep over your idea for a few days 

Even before you think of approaching an investor, start with assessing whether your idea is viable. 


“Every individual who comes to me with an idea, I ask them to sleep over it for a few days. And even after day four or five if they’re excited about that idea and are passionate and excited, then I ask them to act on it and not worry about it being venture-investable,” says Mithun. 


The reason is that it helps the founder realise if their idea is based out of a push reaction or a pull reaction. Mithun explains most individuals are pushed to startup – they don’t like their jobs, managers aren’t great, or they don’t enjoy what they are doing. Most aren’t pulled by an idea. A pull reaction would be wanting to make a change and see a problem that needs to be solved. 


He believes that an individual needs to be pulled into the idea. And only when they sleep over it would they realise if they truly feel strongly about the problem or not. 


“The journey isn’t as glamorous as it was made to be. There are a lot of low points, struggle, and pain and there is no glorification in that struggle and pain. So if you want to start up, do so because of the right reasons,” says Mithun. 

Be Genuine 

He explains once you have the idea and reading clear in your mind, a great investor will be able to see that genuineness. Be Genuine, build the business if that’s what you really want to do. Mithun explains and says, if you want to change the world, say so, if not, say so. 


“If you want to build something because you want to replicate the model from China, be clear and genuine about it. At the seed stage, if they are able to see that you’ve come here because there is a genuine pull, and you are capable of building a business – good seed investors will be able to support you. Investors usually have a clear idea in their mind of what works and what doesn’t, so have data to back your genuineness,” says Mithun. 

Find a story to tell 

However, Tim Draper wasn’t the first investor Mithun had pitched to, while he was at Cambridge, he had helped a friend with the fundraise. They had pitched to a classmate who was an angel investor. “With him, the pitch was detailed, oriented, and numbers-driven, as he already knew about us and our story,” adds Mithun. 


With Draper University, it was different. “Initially I did a lot of iterations, there were a few mentors who were available. I would go overprepared with elaborate business models. I soon realised a lot of pitching about the storytelling. It just isn’t about going prepared about excel sheets and details,” says Mithun. 


But he also adds that pitching isn’t an either/or scenario. Mithun advises it is best to have both an emotional and rational connect. 


Be methodical and ask the meta-questions 


Start with asking yourself – ‘do I really need to do this business?’, and ‘what do I do once I figure it?’ Ask yourself if it is VC-investable – meaning can the business be a billion-dollar company in seven to 10 years. 


“Fund-raising is purely a founder’s job. You need to ask yourself the questions. Nobody can ask them for you or answer them for you. Do not hire consultants or someone else to do your pitch. A pitch has to be prepared ONLY by the founder,” advises Mithun. 

Build a lean startup canvas before starting to work on a pitch 

A lean startup campus is a freely available document. Mithun says you can print it out and fill it up with your co-founder. He adds it will take 90 minutes or two hours to do so. But what a lean startup canvas does is give you clarity on what sort of questions will be aimed at you. 


“It is here that you will have the most important assumption is the total addressable market. This is where most founders fail. For example, if I am starting an ice-cream company and everybody says – the people say the total food consumption market is $500 trillion, then they say I will take one percent. But that is wrong, you have to look at how many people consume ice-cream and say ice-cream consumption is a $500 billion market and I will take 1 percent of that,” explains Mithun. 


He adds it is okay to start in a small part of a market. For example, Tesla started making supercars first with the Lotus body. They started selling sports cars. They never went into mass production. But be clear of the addressable market. 


While doing the P&L model and the lean startup canvas, you also end up building and making some assumptions like the number of ops people you need, the number of salespeople required, and the team you need to build to capture the market. 


Once you have the lean startup model, you can mentally build a mathematical model – P&L model. You can then weave all that into the story.


Initially, Mithun and his team had developed the mathematical model. They were then advised to do the lean startup canvas. 


“Once I did the lean startup canvas, I realised my mathematical model didn’t have one or two business lines and these would have been opportunities for me to generate more revenue,” says Mithun.

Build for multiple scenarios  

This is important as investors will project different scenarios. Like - “What if I put in half the money, what if I give money for a runway of 12 months instead of 18 months. There you need to see how can I change my inputs and outputs and how will it change the financial models,” says Mithun. 


He advises founders to be mathematical while planning for different scenarios. He adds it is important to have both emotional and rational pitch in your presentations as investors are on different spectrums of both. 


“There will be a team of people you will be pitching to, and each one will ask different things And there will be people on the team asking for rational pointers. Once you build a story, there is a Q&A. And have slides ready for everything – I even had a slide ready for my marketing budget. That is the granularity you need to prepare for convince both sides,” says Mithun. 


Along with the story, you need to show that you have done something. 

“There are very few founders that can raise capital only on the power of a story. You need to be an exceptionally good storyteller. So work on both - build a rational and emotional argument. Founders already have a lot of things stacked against them. So what works is preparing for both,” advises Mithun. 

Edited by Kanishk Singh

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