What do Investors Look for in a Business plan

7/25/2019 What do Investors Look for in a Business plan

http://slidepdf.com/reader/full/what-do-investors-look-for-in-a-business-plan 1/18

www.thehubforstartups.com

How to present a business planto investors

Prajakt RautCo-founder - Applyiounder ! "he Hub for #tartups




$i%erent investors invest indi%erent sta&es of a startup.




AngelInvestors

Seed-stagefunds/ Early-

stage VCsVCs / PEs

Investortypes

Stage ofinvestment

Concept Risk

StageEarly-Grot!

Stage

Grot! Stage

• Rs.'( lacs to Rs. (

cr

• #weet spot ! )*R +cr

! ,cr.

• Rs.' cr - Rs.( cr

• "ypically between

Rs.+ cr ! Rs.'( cr

• Rs.( cr "ypical

investment si#e




/our focus should be to

convince investors that yourstartup is a &ood investmentopportunity0nless you can convince them that your startups will

create value1 investors will not be interested

Path to protability ! at scale ! is preferred over 2uickerprotability on smaller scale ! they are playin& forhi&her valuation

(Early stage investors will look for 8 – 10x returns in about 3 –5 years)




3ey criteria for investors

+. )s the market lar&e

'. $oes the concept4product have a

reasonably stron& chance of bein& a

dominant player

,. )s this the team that can do it




/ou till typically &et about ' - ,

minutes for your presentation

3eep half the time for presentation and half for56A

7#how the dish. $on8t detail the recipe.9 ! theobjective of the rst presentation should not be

to share details but to e:cite the investor to meet

you a&ain for details

$on8t state the obvious ! focus on thin&s that

most people are not likely to know e.&. whenpresentin& about a solar ener&y business1 data

on how renewable ener&y is important is not

necessary. ;ost people &et it.


http://slidepdf.com/reader/full/what-do-investors-look-for-in-a-business-plan 7/18www.thehubforstartups.com

)nvestors look for the business around the

concept or product or service. $ence% in your

pitc!% cover &- <hat are you &oin& to do ! concept1 customer se&ment1 bi=

model

- $o are you going to make money ' (usiness case

- "he si=e of the opportunity ! potential

- How are you &oin& to do it ! implementation plan

- Current status

- <ho8s behind this - team

- Competition 6 Risk factors

- How much money do you need and what will you use it for

- >:it ?ptions



<hat do investors look for@



)nvestors look for competent and committed

teams

-Passion and deep interest in the domain

- $eep understandin& of the dynamics of the

business around the concept ! who will buy1

why will they buy1 challen&es1 etc.



)nvestors look for plans with practical

milestones

ut lar&e aspirations



)nvestors look for teams with focus in the

initial phase

>ven when entrepreneurs have identied multiple

opportunities with the concept



)nvestors look for a stron& implementation

plan

7Accordin& to Bartner1 the market will be 0#$ ' bn in''9 is not a reason to invest

How you will &et the rst + users or rst '-, enterprise

customers is.



)nvestors seek teams that have a clearly

identied immediate &oals and tasks

<hat do you need to do to launch@

<hat are you &oin& to test@



)nvestors seek a plan that clearly outline how

much fundin& is re2uired1 where it will be

used and what it can achieve

/ou should seek from an&els only as much as you re2uire

to &o till you can attract Cs

)n rare cases will an&el fundin& be suDcient to take the

startup to protability



inally1 investors look for teams they can trust

e honest about risks 6 challen&es1 be open aboutlimitations and weaknesses

<hen you tell them where you need help1 will they be

able to provide inputs



)n #ummary

)nvestors invest in a business case around

products4services that address lar&e markets

)nvestors invest in hi&h-2uality teams with lar&e

aspirations and who have a clear understandin& of what it

will take to achieve the potential

)nvestors invest in clearly dened plans with practical

milestones

;ake the investor &o back feelin& 7<hat a &reat concept.

) think the market is lar&e and the team will deliver.9


http://slidepdf.com/reader/full/what-do-investors-look-for-in-a-business-plan 18/18th h bf t t

Prajakt Raut

>ntrepreneur and >ntrepreneurship >van&elist

;ail E prajakt.rautFthehubforstartups.com

lo&E www.thehubforstartups.com

5uoraE www.2uora.com4Prajakt-Raut

Co-founder - Applyiounder ! "he Hub for #tartups

What do Investors Look for in a Business plan

Documents

Transcript of What do Investors Look for in a Business plan