Mentor Talk by Ishita Agrawal, Mentor and Associate Director - The Hatch for startups on 27th September 2012 at The Hatch Incubator, Chandigarh

1. What do investors look for in startups?
Ishita Agrawal
Mentor and Associate Director - The Hatch for startups
27th September 2012

2. Different stages of the venture carry different risks
Scale
Stage

3. Risks at early stage
• Concept risk
• Execution risk
• Scale-up risk
• Technology risk
• Market risk

4. Risks at growth stage
• Execution risk
Risks at early stage
• Scale-up risk
• Concept risk
• Execution risk
• Scale-up risk
• Technology risk
• Market risk

5. Risks at growth stage
• Execution risk
Risks at early stage
• Scale-up risk
• Concept risk
• Execution risk
• Scale-up risk
• Technology risk Risks at mature stage
• Market risk • Scale-up risk

6. Scale
Stage

7. Angel Investors

8. VCs

9. PEs

10. Investor Incubators and
Angel Investors VCs PEs
types Accelerators
Concept Stage Proof of Concept Growth Stage Late Stage
Stage of Stage
investment
• Rs. 0 – Rs. 25 lakhs • Rs.25 lacs to Rs. 2 • Rs.2 cr - Rs.50 cr • Rs.50 cr +
Typical
cr
investment
size • Typically between • Typically between
Rs.25 lacs – Rs.50 Rs.2cr – Rs.10 cr
lacs

11. So, what do investors actually invest in?
1. Business case
2. Team – competence and commitment
3. Quality of the plan
4. Is the opportunity large enough

12. What do investors not invest in?
1. Ideas without a plan on ‘how to’
2. Teams with low aspirations
3. Concepts addressing small, niche markets
4. ‘Good UI’ – investors don’t invest in just the ‘what’s
visible’ – they invest in ‘what’s inside’
• E.g. E-commerce

13. What phrases do investors hate?
1. “We have no competition”
2. "We are cheaper, hence we have a stronger value
proposition”
3. "According to Gartner, the market is USD 80 billion by
2015”

14. What do investors want to see in your
presentations?
1. Well-thought out plan on ‘how’
2. Practical assumptions
3. Clarity of thought
4. Ability to articulate and ‘tell a story’
5. Honesty – including things that you identify as your
weaknesses

15. What should you include in a business plan?
• Concept overview + Pain point or opportunity addressed
• Team
• What is the size of the opportunity
• What is the value proposition/positioning
• Business model
• Competitive landscape
• Operations plan overview
• Risk factors
• Funding needs and use of funds
• Exit potential

16. Investors invest in any sector
where market opportunities
exist

17. Live Traffic Online platform for
information for buying school related
road commuters requirements
Sales force Online Music
automation platform
Group buying for Date protection
houses software
Online grocery
Physical stores for store
cell phones

18. Rural BPO Analytics
Robotics solutions
Medical Devices for retail
Online assessments Electronic
components
Sports leagues
Education Programs management

19. Questions