Written by Adrian Li
As we run up to Startup Asia – Jakarta’s annual tech fest – there must be many entrepreneurs beyond the Startup Arena who are brushing up their elevator pitches and presentation decks so I thought putting out a post that talks about some of the key things venture investors look for would be helpful. While as investors we’ve just announce our first investment in Female Daily just last week as an entrepreneur I’ve done the investor pitch quite a few times already so have some experience on what catches attention. So as you pitch your company, please make sure these key things stand out.
1) Huge Market: as the late Steve Jobs put it “We’re here to put a dent in the universe. Otherwise why else even be here?” But to put even a dent in the universe you have to be solving a pretty big problem and addressing a very large market opportunity – this is what venture investing is out to find. This is no reflection on how good your business is but more a reflection of the type of capital that venture investing represents. Any fellow entrepreneur will attest to how tough it is to create a successful business let alone a BN$ one (the odds of which are 1 in 1,538 or (0.07%) according to Aileen Lee) and hence given the risk profile of this stage of investment VCs necessarily target huge markets to get a better expected outcome.
2) Right Team: early stage companies by definition do not have their product completely figured out yet so we look for attributes that support the entrepreneurs and team have what it takes. This includes track record in starting a business and industry expertise for example but also importantly a lot of passion for the business. Ultimately at this stage it really comes down to the CEO and the co-founders, how convincing they are as a team to win the market and how vested they are to make it work. Hence this makes it very difficult to invest in teams with hired CEOs or teams at the early stage.
3) Proven Traction: I put traction versus growth because traction can be created in ways outside of growth – for example traction in investor interest or in product development progress. This is where the pretty graph in presentation decks come in which show monthly double or triple digit growth, how the quickly product has evolved over time or how you already have a lead investor and will be oversubscribed for the remaining investment. Many of these points are evidence that show you are the right team to invest in which is a key part of an investment thesis for any investor.
There’s definitely plenty more you can and should pitch but if you only have 5 minutes less is more and it’s important to focus on the key things.