Get All Access for $5/mo

Pitching to China-based Investors? Never Ever do This China-based investors believe that building a personal relationship with founders is important to gain their trust and work with them

By Shreya Ganguly

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

The Indian start-up ecosystem has been raising a lot of capital from foreign markets, especially China, the US and Japan. Pitching to investors, whether domestic or foreign, continues to remain an unnerving act for entrepreneurs. However, it is important for founders and investors to be on the same page and work together to build a successful business.

The Chinese start-up ecosystem has grown exponentially over the years and investors have been pumping in huge amounts of capital in India. According to reports, China-based venture capitalists (VCs) invested over $5 billion in 2018 in India, much more compared with the US and Japan.

Most recently, it was reported that China's Tencent Holdings acquired a 10 per cent stake in Indian insurance aggregator Policybazaar for $150 million. Last month, Tencent also invested $110 million in Times Internet-backed MX Player, a video player-cum-streaming platform. Apart from this, 2019 also saw Alibaba Group invest in Bigbasket, Fosun in Delhivery and Shunwei Capital in foodtech giant Zomato.

Let's take a look at some do's and don'ts while pitching to China-based investors:

Failing To Reach Out

According to Damien Zhang, vice-president at China-based CDH Capital, founders need not hesitate and should reach out to investors and build personal bonds.

Speaking at TiE Global Summit 2019, Zhang explained that investors and founders share a personal relationship in China and raising funds is not a big deal. He added that this is a "relationship-driven business" and thus founders should reach out to them for informal meetings and dinners to build a personal relationship with the investors. This helps both the parties understand each other well.

Don't Be Passive, Be Proactive

Zhang along with Jeffrey Yam, executive director at Integrated Capital, believe founders need to be proactive and interact with investors even if they do not fit investors' mandates. While speaking at the event, Zhang said once they build a strong connection with them, founders can receive advice from such investors which will help them develop their businesses.


Don’t Exaggerate Numbers

Investors speaking at the summit clarified that founders should not exaggerate numbers while pitching to investors. They explained that the China-based investors perform a thorough investigation about the start-up pitching to them. Thus, the true statistics will eventually reach them.

The notion was concurred by other domestic and foreign stakeholders as well. While speaking at an online event redBus co-founder Phanindra Sama had also advised against exaggerating numbers. Investors will always do their research before taking any decision and investors may choose to pass on the company once they realise that the pitch was not true.

Don’t Understate your competition

Continuing their previous point, investors also added that founders should also not understate the numbers of their competitors while pitching to investors. "Every Chinese investor does a very thorough cross-checking and if you understate your competition or there is something amiss with your numbers, investors will go past you," said Zhang.

Yam concurred to the point and added building trust is important to convince an investor to join the start-up and work with full dedication.

Shreya Ganguly

Former Features Writer

Growing a Business

3 Branding Strategies That Will Make Any Brand Stand Out

Here's how to differentiate your brand in three essential steps — understanding your unique selling proposition, leveraging storytelling, and valuing feedback.


Academic Excellence Is Not Necessary for Success in Life: Hear from the Founder of this Exciting New Digital Education Platform.

Many educational platforms are emerging these days to help people qualify for various types of entrance examinations. But what about the students who don't want to take the traditional path, the ones who don't rank among the top 10 in the classroom yet still aim high in life?

Science & Technology

No More ChatGPT? Here's Why Small Language Models Are Stealing the AI Spotlight

Entrepreneurs can leverage this growing tech to create innovative, efficient and targeted AI solutions.

Growing a Business

The Top 5 AI Tools That Can Revolutionize Your Workflow and Boost Productivity

Discover the top 5 AI tools for marketing and content creation that every marketer needs to know.

Health & Wellness

4 Habits I Cultivated to Become a Healthier, More Effective Entrepreneur

By the time I hit mid-life, some of my bad habits were becoming a risk to my long-term business goals — and my health. Here's how I was able to change them.