4 Tips By redBus Co-founder Phanindra Sama On Pitching To VCs
Speaking at the online event Startup Funding Summit organised by MyDreamStore.in, Sama said entrepreneurs need to be themselves while pitching
Building a start-up from the scratch is not an easy task. It requires entrepreneurs to put in more than 100 per cent of their efforts to materialise their ideas. While an entrepreneur’s hard work may give birth to a start-up, funding and an investor’s guidance are important for scaling up. However, pitching a start-up idea to an investor is always an unnerving act for entrepreneurs.
While speaking at the online event Startup Funding Summit organised by MyDreamStore.in, redBus co-founder Phanindra Sama said entrepreneurs need to be themselves while pitching to investors. He also explained that while not all the investors might like the approach but it will help them find the right entrepreneur for themselves who will be able to relate with the idea.
For the uninitiated, Startup Funding Summit was launched after a survey of over 9,000 start-ups and entrepreneurs revealed the need for such an event.
Sama along with Ashish Kashyap founded bus ticketing platform redBus in 2007. After nurturing the start-up into one of the prominent brand in India, Sama exited the company in 2014 after it got acquired by Ibibo Group.
Recalling his own experience, he too was unsure about how should they pitch their idea. “I read blogs online and found two different blogs saying completely opposite things. Then I decided that I will just be myself and went to pitch to Bharati Jacob, founder-partner of Seedfund. I shared our journey story and eventually they decided to go further with the deal,” Sama said. He explained that when investors invest, the personal connect and honesty becomes most important over anything else.
“They (investors) do not want to invest in those who are putting up a show. It becomes difficult for investors to take a call when they realise that the entrepreneurs putting up a mask and not revealing their true self. For me, if I have to do it again, I will do it the same way I did before,” Sama added. (blockquote)
So here are some of the tips shared by Phanindra Sama while pitching a start-up idea to investors:
Be Upfront and Speak Your Mind
Sama believes that entrepreneurs should be themselves and describe their journey honestly. “Even if we manage to impress the investor by putting larger than actual figures, the reality will strike soon. Once they join your board, entrepreneurs will not be able to put up the front every time. You can be yourself but not somebody else every time,” he explained.
Know That Not All Investors Will Like It
Sama also explained that entrepreneurs should know that not all investors will like their upfront approach. However, this will help them meet the investor who will be right for the company. Even if several investors reject the idea, founders will eventually find right investors who will like the idea and will believe in similar values.
5-10 Year Projections Do Not Matter In Early Stage
Sama advises early-stage start-ups against spending time on working on showing projection figures as it is difficult to predict. “If you have a plan ready for your start-up in an excel sheet then fine else, speak out your dream for the upcoming years,” Sama added. According to him, these projection data will become more accurate after the start-up reaches Series B or Series C stage as more data gets accumulated with time and thus the projections are ought to be more accurate.
Research Your Market and Maintain Transparency
Sama believes that it is important for entrepreneurs to research about their market and maintain transparency, especially about the competing businesses. “Often I have heard people say that we do not have any competition. Actually, they know who the competitors are but do not want to reveal it to investors,” said Sama. “The investors will anyway do their research and find you but if you are upfront about it then you both will be on the same page and discover things together. So do your research and present it in a transparent way.”
Be Ready For Rejections
Sama advises that entrepreneurs should be ready for rejections from investors and adds that they should not change their idea or strategy with the feedback. “It is a fine balance. Sometimes you need to take your investors feedback and if it makes sense incorporate but not change it every time because then it loses consistency and your core beliefs,” Sama said.