Band of Angels, now rechristened Indian Angel Network(IAN) held it’s 1st meeting in Mumbai today afternoon, where 6 businesses presented for raising early stage capital. IAN has now assigned a member to work with each of the businesses to help develop their plan and undertake diligence. Upon completion of these steps, which usually takes a month or two, IAN will either invest, decline, or request the business to revisit later.
With the Mumbai chapter now formally in place, there will be a monthly meeting where businesses can present plans and thereafter work with the team in Mumbai. This is excellent both for businesses in Mumbai/Western India, and for angel investors in this part of India. IAN hopes this will be a significant boost to entrepreneurship in Mumbai/Western India.
What struck me during some of the presentations, is that, founders were spending too much time on presenting product features and not enough on the other aspects necessary for a potential investor to evaluate the opportunity:
1. Team: what are the credentials of the founder and his/her core team? We want to know what kind of a track record of success the team has in the professional and academic level.
2. The addressable market: what is the addressable market for your product? I found that this was not tightly defined by many of the presenting founders. So (for example) if it was gourmet chocolate business for India, the founders were giving stats of the whole world’s chocolate consumption, when instead they should present data on the Indian gourmet chocolate market.
3. The competition: what is the existing and potential competition in your addressable market? This has to be presented with brutal reality.
4. Competitive advantage: what advantage do you have over your competition? Or, why should someone use you and not your competition.
5. Intellectual property: what is the intellectual property that the business will develop, such as brand, technology, processes, exclusive contracts, licenses, etc? A business without Intellectual property may not be able to sustain profitably for very long. On the flip side, especially on technology product you will need to show that you are not violating existing IPs with what you have created.
6. Marketing innovation: what marketing innovations are you undertaking to significantly cut cost of customer acquisition? Often marketing is far more expensive that building a product, and what use is a great product if you can get lots of customers/clients for it. With these in mind, you need to come up with marketing innovations which will significantly cut your marketing cost and carry your limited startup capital further. A few famous marketing innovations: Richard Branson who mastered the photo opp; Sabeer Bhatia who put the “Get your free hotmail” footer on every email; Larry & Sergey with Gmail’s 1GB storage; Kabir Mulchandani with buying out downtime on hoardings (when a hording had no ad on it) to splash AKAI, and paying taxi drivers across India to carry big empty AKAI tv boxes on their carrier to make it appear to people that lots of AKAI tvs were being sold.
7. SWOT: what are the strengths, weaknesses, opportunities and threats of the business? This gives an investor a realistic view of what s/he is getting into.
8. Proof of Concept: what is the proof that the business’ product will be accepted by the market? Are you getting good sales/adoption? Do you have positive testimonials from clients in you addressable market?
If you are presenting to IAN or any investor, please do keep the above in focus and you are sure to get a good response.