[TechSparks 2020] Narrative from the heart has to mix with the substance of your business plan, says Anup Jain, MD, Orios Venture Partners
In TechSparks 2020 Masterclass with YourStory’s Business Editor, Vishal Krishna, Anup Jain, Managing Partner of Orios Venture Partners, talks about what investors look for in a startup pitch.
Anup Jain, Managing Partner of Orios Venture Partners, believes every sector in India has potential. It is one of the main reasons the venture fund is sector agnostic. In a TechSparks 2020 Masterclass with YourStory’s Business Editor, Vishal Krishna, Anup spoke about what he looks for in startups as an investor.
Anup focuses on investments the firm has made across fintech, B2B marketplaces, D2C brands, social commerce, edtech, and healthtech.
He is actively involved in matters of business growth, brand management, and building teams. Some of the notable portfolio companies that feature in his list include Pharmeasy, Country Delight, GoMechanic, Beato, MoneyOnClick, Zupee, LetsMD, Gully Network, and Miss Malini, among others.
Solve for a problem
Anup advised all founders to focus on solving a genuine problem for a large section of the population, as there would be no large business without it.
“When you are calculating the impact and business size, you process through the lease and look for a big problem. Do not disrupt for the sake of it. It should result in the creation of a large company,” said Anup.
What is the risk involved? What are the unit economics, defensibility, right to succeed, and the learnings from failures? Did you have beta testing, moats and differentiators? What is the go-to-market acceleration, or what if an existing business hires a person to set a business vertical?
“If two teams are addressing the same problem, it is obvious one is better. If you’ve got execution, that is rare; it is about how you are presenting that to the investors,” added Anup.
Pitching is an art and science
While the checklist covers the scientific aspects of pitching, this needs to be put in a story. Why are you passionate about this particular problem? Why did you give up something that was going for you?
“The narrative stitches everything – it is the story and you’ve got to be able to tell your story in your style. It has to come from the time when you decided to leave all the options for this one. The narrative strikes a cord on the other side. It has to come from the heart and has to mix with the substance of your business plan effortlessly – so that it becomes a part of you,” explained Anup.
He explains that the investors are looking at multiple pitches everyday, they look for breakouts too, and something that stands out.
Clarity of thought and founding team
Anup explained that the narrative can be put out right only with the clarity of thought. The mechanisms and the optics have to be controlled and delivered in a seemingly effortless way. That, Anup says, happens only with practice.
“The ecosystem is getting crowded; talented people are coming up with similar business plans, and you need to stand out distinctly and clearly. We also look for two founders – it is better because there are ups and downs, fundraising issues, and ops for the company. It is not everyone’s natural style to handle the front and backend of the business at the same time,” he added.
When should a founder raise?
“I would advise founders to raise the first one crore from family and friends, angels, and the known network. Do your experiments to get the early traction fields, and run your go-to-market and product-market fit. Go to the seed investor and get Rs 3.5 crore to Rs 7.5 crore,” said Anup.
He added: “Often founders come with a paper plan and wish to raise seed capital. This has happened in the case of founders who have had stints or have failed in the previous business, or are just super smart with the narrative. It all has to be weighed from the eyes of the investor.”
A sector-agnostic approach
“When technology went on the cloud and the number of smartphones increased, the scope of problems that could be solved across the socio-economic strata also increased. And irrespective of background or demography, there are opportunities to build big businesses,” said Anup.
He explained that another reason for the team to look across sectors and segments is that all the three partners of Orios have complementary skillsets. The team works in-depth with the companies and helps to take them to the next level.
This, he said, was an important factor in his corporate career. He would attract assignments that were focused on innovation, disruptions, and worked on turnaround projects to think differently.
"This worked well with me. I have worked in the first Dotcom bubble and startups. By 2014-15, my own habits and my friends’ habits were changing and we were moving online. We were not going to banks, and Amazon and Netflix had come into our lives. I am not bright to have a startup idea, so I thought let me help the founders,” said Anup.
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Edited by Kanishk Singh