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So, I am usually asked (atleast used to when meeting people face to face was a norm – Aaaaaaah….. the pre-COVID days) if we are investing at present and that leads to start of a pitch. Some brave hearts, though, do venture to find out how I landed up in this space! The latter is a topic of discussion at some other time.
The former is a matter we think some light should be shed upon. The core of the exercise of raising funds, for your brain-child, is to get down to How and Why, in that order, to the business of raising funds. The “How” is the easy part between the two. That is not to say it is a bed of roses but in relative terms. Hence, I tackle that first.
The standard format has been run to death. Go to any Investment Banker and you will be given a handout that dishes out the mundane. My advice to all, who care, junk that approach. Making I.M.’s and carpet bombing (focused or general) is clichéd to the nth degree. Get over it. Make a difference. There are many ways to bell a cat and just because the last 1000 belled it in a particular way, are you not scared that the Cat would have learnt how to avoid that way? The word we are looking for now is DIFFERENT.
1st step in the journey, you are embarking on, is to find all the DIFFERENTIATORS you can. Burn up all the midnight oil and the use up all the grey matter you can lay your hands on. This is the most important aspect of the transaction and should be the most serious exercise. The element is not only in the Product / Product-Service your enterprise offers but also in the way you should embark on to start with.
I must confess that I do not have alternatives to ponder upon, for you, but I can guarantee you one thing. I guarantee a bite if you get the bait right and who says that this will be an easy task. There will be frustrations and fights. Don’t let that deter you ‘coz that is the only way to plan the steps. Yes-men are your worst enemies so if you haven’t had frustrations & fights, with your team members, then start first by setting up a new team for yourself before you get back into the pondering stage again. No shortcuts and no bypass here, if you mean business.
The “Why” part is the 2nd step after the 1st step has been sorted. I do not know of how many countless standard answers I have heard on this simple query in the short span of my life in the VC World. It gets to be boring and, if you were to sit on the other side of the table, you would walk out on yourself! People just do not fathom the clutch of cliché’s the industry has developed in the environment. It often puts me to sleep as I know I will wake up not having missed a bit! This is the toughest nut to crack, proverbially speaking. The best thing is to again tread the path less taken and here are a few thoughts towards that
Do not sell your solution but sell the problem. Less & less entrepreneurs tread this path, do not know why?
The music to a VC’s ears is not the amazing valuation s/he is going to get on investment but the exit valuation plan, for the VC, and your team’s sure shot strategy to achieve it. Let them plug holes in that – you have the attention of the VC and that is most important – more the VC sees it as doable more chances of you having used your bait successfully. Word of caution steer clear of run of the mill exits – that is no trade secret.
Always project your team. The more team oriented the play, the better. Here too the caution is not to put up a cricket team. What is the ideal size of the Core team???; not less than 2 and not more than 3 – but then that is my take. Having said that it is generally seen that a single person centric project is scary, and a community project is a waste of time.
I am pretty confident that there must be many more such hidden treasures, I have listed a few that would keep me awake during the presentation.
My wish to all the seekers….. MAY THE FORCE BE WITH YOU.