Here is a short presentation that outlines the information that we, at Canaan, like to see in business plans. It is also a useful tool to think about what questions one should try and answer, besides just ensuring that a certain format is used. Personally, I don’t fancy paper copies much, especially when all of the audience is in one location, but other than that, this is a good starting point for discussions.
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Great presentation (presentations are way nicer than long posts explaining the same thing). I think the big one is on slide 2 “Sell Don’t Explain” and that’s where most seem to go wrong. Alok, going by that, maybe you should re-christen Intro to The Grab… ?
This is intrinsically a fine presentation but sadly, as far as the Indian VC scenario is concerned, highly theoretical.
(a) “State the problem, describe the pain” : In India its more like – what are others doing, can you also do the same, maybe slightly better? Since others are doing it, it should be the right way. The “herd mentality” in short. Take the over-funded Social networking / Casual Gaming scene and you will see what I mean. So basically you are expected to simply mumble the right words (online ads, eyeballs, largest mobile user base, clickthroughs etc).
(b)”How will you make money?”. Forget answering that question. Its more like “how much money have you made”. Angel funding in India has more or less dried up and VCs are looking at companies in a growth stage with a product and ALREADY making revenue. FACT: Indian VCs dont take risks anymore like in the US.
(c) And more fundamentally, with VCs being inundated with millions of plans they dont read your exec summary. These meetings outlined in the presentation above never happen. In India you ONLY get funded if you have reliable backdoors into the VC’s backyard. Or else even if you are called you meet a low level filter who will more often than not have no clue as to what you are saying. If you can directly hit the top then maybe you will have a chance.
And to do that you do not need to read this presentation 🙂
Santosh – the investment focus hasnt really changed, except that you dont want to fly into the headwind, and perhaps more capital efficient models are preferable. The criteria again remain the same, but scrutiny levels have gone up from where they were a year back – the emphasis on being able to make the dollar run longer is higher.
One who has the gold, makes the golden rules 😀
With every VC having a different pitch format, what can poor entrepreneurs like me do 😕
jokes apart, thanks for the post. appreciated.
Hey Alok,
Thank you for this. How has Canaan’s investment focus or criteria changed with the recent economic events?
– Santosh