Being prepared is crucial for a successful pitching session with a potential investor, as it can make or break your fundraising journey.
Even in the midst of the pandemic, opportunities to engage with investors and showcase your business are still abundant. Whether you’re a newbie or a seasoned entrepreneur, understanding the ins and outs of pitching sessions is essential for success.
Leung Pui Yan (Executive Director at Vertex Ventures Southeast Asia & India), Abhijit Banerjee (General Partner & Managing Director at Decacorn Capital), and Eko Kurniadi (Partner at Alpha JWC Ventures) share valuable insights on what to expect during pitching sessions with VCs. They discuss the types of questions asked, the best way to respond, and how to best prepare for a pitch.
Before your next meeting, make sure to read their advice.
Preparing for a Pitching Session
Prior to attending a pitching session, it’s important to understand what typically occurs in these meetings. While processes may vary among VC firms, there are some common elements.
According to Banerjee, the process usually involves a virtual meeting with the founder or co-founders, primarily conducted via video calls due to COVID-19 restrictions.
Leung further explains how the process unfolds at Vertex Ventures.
Also Read: Pitching from home: How to get investors’ attention in a virtual world
At Alpha JWC Ventures, the initial pitch stage involves an introductory call with the founder(s) to understand the company’s mission and team.
“The hearts and minds behind the company are crucial to us. We want to know what brought the founding team together, the inspiration behind their solution, and what sets them apart,” Kurniadi emphasizes.
Next, a detailed discussion about the business itself ensues, focusing on key milestones, challenges, and trends. Unit economics, monetization, and the use of funds are also integral parts of the conversation.
Ultimately, the goal is to assess the progress made, the value created, and how partnering with Alpha JWC can further the company’s mission.
When asked what founders should prepare, the VCs offer different perspectives.
“Founders should be ready to discuss the team profile, competitive landscape, product roadmap, current traction, future projections, and funding needs,” suggests Leung.
Meanwhile, Banerjee advises founders to conduct thorough research on the VCs they are pitching to, as it helps in asking appropriate questions and creating a positive impression.
Kurniadi highlights the importance of authenticity in building a strong foundation for a lasting partnership, emphasizing a blend of passion, industry knowledge, business strategy, and problem-solving desire.
The Crucial Questions
VCs typically focus on three key questions during a pitch:
- The problem being addressed, the unique solution, and the approach taken
- Product-market fit, marketing strategies, and monetization plans
- Cap table and founders’ ownership stakes
According to Leung, these questions help VCs understand the market opportunity, competitive landscape, product strategies, and potential risks.
The importance of supporting the pitch with documents and data is emphasized by the investors.
“Founders should prepare a clear cap table and be ready to provide detailed information. Asking VCs to sign NDAs should be avoided as it can hinder the pitching process,” Banerjee notes.
Kurniadi underlines the significance of presenting a concise mission, solution, and strong storytelling to capture the audience’s attention effectively.
Common Mistakes to Avoid
Learning from mistakes is vital in the pitching process. Common errors to steer clear of include:
Also Read: How should founders dress when pitching your startup to a VC?
Leung points out issues such as lack of conviction, poor differentiation, and unclear milestones and funding requirements.
Banerjee warns against diluting ownership early on before raising VC funding.
Kurniadi stresses the importance of thorough preparation, highlighting the need for founders to defend their positions, possess knowledge about competitors and customers, and showcase a sound understanding of the business.
By avoiding these pitfalls and heeding the advice from VCs, founders can enhance their pitching skills and increase their chances of success.
Echelon Asia Summit 2023 brings together APAC’s top startups, corporates, policymakers, industry leaders, and investors in Singapore this June 14-15. Learn more and get tickets here.
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Image Credit: 123RF
This article was first published on December 14, 2021.
The post Pitching prep: Anticipating key questions VCs pose in pitch sessions appeared first on e27.