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(Source: Dilbert)

[Also published on Yourstory.in]

Earlier this week, I was invited to mentor the GSF Accelerator’s startups on Pitching & Investors Decks.  I thought I’d summarize what I said there.

I certainly don’t claim any special knowledge on what makes for a good first investor presentation.  There have been many books and blogs written about this.  However, I’ve seen hundreds of investors pitches over the past several years of coaching CEOs on IPO roadshows, raising capital as a founder and listening to pitches as an investor.  Heck, I’ve even been involved with investing in the leading presentation sharing company - Slideshare - which has helped accelerate a trend toward storytelling in presentations.

The first meeting is not about getting investors to agree to invest (although perhaps it is when you are looking at angel/micro-VC funding). The key is to start to develop the relationship and get them excited enough and intrigued enough to want to dive in deeper in a subsequent meeting.

You can greatly improve the odds of having a productive first meeting by telling a compelling story in a concise and hard-hitting manner.  Make it personal. Hit the main high points first to generate and assess interest. Then provide backup to your claims to cement the story.

Click here to see the 4 key slides (on Slideshare) that you need to nail.

After these four slides, stop and assess your audience by asking them what they think, their key concerns etc.  You should then be adept enough to address these concerns as you continue with the familiar series of slides on traction, product overview/roadmap/differentation, market sizing, business model, go-to-market, financial projections and funding requirement & milestones.  Finish by showing the Investment Highlights slide again and summarizing the key points.  Leave this slide up while you go through any final Q&A with the investors.

Some other guidelines and pet peeves:

  • The point of the slide should be the title of the slide e.g. don’t say “Team” as the title of the slide. Instead, say “Extensive Team Experience in Adtech” if you are doing an Adtech startup.
  • The meeting is not about reading out the presentation, it’s about your conversation and engagement with the investors, with the presentation as support material.
  • No more than 2 minutes per slide. I’ve seen 30 minutes spent just on the first slide where the whole pitch is given with that one slide.
  • You should be able to run through the presentation by yourself in less than 30 minutes.
  • Place yourself between the investors and the projected or laptop-based deck. Otherwise you’ll have the tennis match effect of spectators swiveling back and forth between the presentation deck and you.
  • Don’t leave the meeting without asking investors: “What do you think?”, “What are your main concerns?”, “What did you like specifically?”
  • Know what your investors have invested in or said about your space before you meet them. The Web is your friend.
  • Please don’t take the slide deck I’ve embedded above as an example of the colors, fonts or layout that you should use.

[Published in Yourstory.in]

There are two levels to this question:

a) Is there value in vernacular content?

b) Is there value in online vernacular content?

(My thoughts below the image)

(Source: Newshunt)

a) The first one is a clear YES, which wasn’t the case a few years back. In 2007, English publication readers constituted 10% of total print media readership, but garnered 60% of the total print ad-pie. Today, English still constitutes 10% of readers, but its share of the ad-pie has come down to 40%. In the same period Hindi grew from 20% to 30% of the ad-pie. To put things in perspective, the print-ad pie is ~$1B today, so Hindi print alone is at $300M of ad-revenue and growing at 17-18% annually. More data in a recent article in FE.

According to media buyers’ estimates, during 2007-09, the ad rate commanded by English newspapers was roughly 10x that of non-English dailies. This rate has contracted to about 8x and is further expected to come down to 5x or 4x in the next three years.

The above is also the driver for investments and growth in Hindi print. E.g. Blackstone’s investment in Jagran and Nalanda’s investment in DB Corp.

b) Value in online vernacular content is not showing in terms of monetization yet. Online advertising is gaining traction but it is mostly English today. However, it is encouraging that vernacular is building up readership – Dainik Bhaskar recently announced 200M monthly pageviews. Advertising spend on any media tends to inflect after reach (readership) crosses a threshold, and the signs for online vernacular are in the right direction.

Thus the answer to the question in the title of this post is “Yes, it seems so”, but it won’t be clear for some more time. Of course, when the answer is obvious to everyone, the opportunity no longer exists.

Takeaways for entrepreneurs:

- There is an opportunity in vernacular: Online vernacular readership is increasing and will increase faster as internet and mobile-data access continue to penetrate deeper beyond the English-speaking population.

- Monetization will take longer: Be prepared to keep a lid on the costs while the market shapes up. Good news is that the online ad-ecosystem is in place for English and given will bring $$$ to vernacular if there is an arbitrage opportunity in pricing.

- Local plays an important role in vernacular: 60%+ of ad-revenues  in vernacular-print come from regional sources (regional fmcg brands, education institutes, local government, etc). The content too has a very local taste – print publications customize their content every 25 kms to fit into local dialects and preferences. So keep localization in mind in terms of content and as well as monetization.

- Think mobile: With cost of devices and access continuously falling, mobile might be the primary channel for accessing vernacular content in India, unlike English.

- Define your space: Large offline publications will always be faster and cost efficient in building content. You need to define your space but still be meaningful to a large enough population.

- Think out of the box, especially if you are looking to raise venture funds. Content production is a linear businesses. Can there be a platform play where the effort/cost of building content is not directly proportional to content monetization?

- Finally, keep an eye on vernacular even if you run an online transaction business (like ecommerce). If vernacular audience is valuable to an advertiser (online or offline), it is likely valuable to you as well, so don’t close your doors on them by having an English-only website. The “access” value proposition of ecommerce is also more suited to the non-metros of India, which constitute ~50% of the orders today.

Please add your thoughts in the comments section.

[Published on Yourstory.in]

So, how long will it take to get a term sheet?

This is a question that most entrepreneurs appropriately want to know.  While there is no one size fits all answer to this question, the focus of this post is to ask what I think is an equally important question for all entrepreneurs – what does a term sheet really mean?

The reason this is important is because all term sheets are not equal.  Some firms issue term sheets early in their investment and diligence process (Firm A), while others issue them at the end of their process (Firm B).  While Firm A will be able to issue a term sheet more quickly than Firm B, there is likely to be a higher risk that the deal does not close as most of the detailed diligence is yet to be done.  Conversely, while Firm B might take longer to issue the term sheet, if/when when they do so, they will likely have a very high likelihood of completing the investment, thus providing the entrepreneur with a higher certainty of close.

Since most term sheets contain exclusivity clauses that restrict the entrepreneur’s ability to speak to other firms and evaluate other financing options, wouldn’t you rather accept a term sheet that has a higher probability of close, even if this takes a little longer? So next time you ask an investor how long it takes to get a term sheet, be sure to also ask what level of commitment their term sheet represents.

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