Start-up Pitch – Essentials

After having looked at around 200+ start-up ideas over the last couple of years, I have compiled a laundry list of areas that a start-up pitch should cover. The answers to these questions should not be a perfunctory one, but an honest one, which should ideally be answered internally before taking up an idea. A “fill-in-the-blank” approach to the pointers below is a sure-shot way to draw a blank. Instead, all these points should be deliberated to clear the clutter, get more clarity and improve conviction to pursue an idea.

As the founder of Spotify famously said – “Ideas are 5%…execution is 95%.”. It’s the execution that matters, nothing else.

So, here we go….. the critical aspects that a start-up should cover while presenting.

The problem that is being attempted to be solved-

1. Why is it a problem
2. Scope of the problem
3. What is the unmet demand that the startup is attempting to cater to
4. Why no alternatives/substitutes can solve the current problem
5. What is the Founder-Product-Market fit

The solution to the problem/value proportion –

1. How the proposed solution solves the problem
2. Why the alternatives/substitutes are not strong enough
3. Why should the customer choose your product and how would it delight him
4. Is it sustainable/repeatable, does it have an enduring solution or how we are looking to solve problems around the current issue at hand
5. Does the solution improve productivity or help improve revenues for the customer?

Market scoping – size & opportunity –

1. Use the funnel approach to show the market universe, how filtering of customers happens, and what the target market is. All these should be backed by numbers.
2. Funnel the opportunity through the following for clarity:
   • TAM – Total Addressable Market
   • SAM – Serviceable Addressable Market
   • SOM – Serviceable Obtainable Market
   • The natural rate of growth.
3. Users – are the consuming users different from paying users? If different demarcate these accordingly while doing the scoping.

Business Model/How it works –

1. The high-level process, that shows the transaction flows summarising the business model.
2. Specify customer segmentation, if any
3. How will we grow given our current business model & the efficiencies that we bring in?

What makes our solution unique? Highlight our USP in terms of –

1. Product, Pricing
2. Retention, why would the customer come back to us (any programs referral, retention or any other mode- tie-up etc)
3. Network/Habit creation that is being built. Will it act as an entry barrier for competitors?
4. IP, Patents if any.

Competition matrix – possible ways to present

1. A simple matrix with competitors in columns and services in rows to illuminate advantages that we have over others or
2. Quadrant approach  – quadrant we fall in and how are we superior to other players or
3. Competitive advantages over others in terms of technology, product, network, experience or any other softer aspect.

Monetisation plans –

1. Are there subscription-based products or commission-based ones? In the case of a two-sided network, specify revenue streams covering users on both sides.
2. Any cross-sell potential and how are we going to convert it.
3. Ad revenues/any other forms of revenues that are being explored

Unit economics –

1. What is the profit/contribution per unit of measurement? Revenues minus variable costs excluding marketing costs. Breakeven point. If unit economics is negative, how long would it continue & how would the costs be recovered in the long run.
2. Highlight various metrics like customer acquisition cost, lifetime value, how the marginal cost of acquiring new customers etc
3. Modes of delivery of product/solution & the technology behind it – App based/web-based or through other apps

Go To Market/Customer acquisition strategy –

1. Modes of acquiring customers, cost of acquiring under various channels – online/offline
2. Tie-ups explored & how would these be operational + incentives structure.
3. Customer retention and reward strategy. How do you lock in the customer?

Traction, if any –

1. Whether any pilot is done and lessons learnt from the pilot, before expanding
2. Users – classify them as registered users, free users, paying users, time spent on the website
3. Locations covered so far & the rationale behind it. Tie-ups so far
4. Metrics on Revenues/Cost/No of customers/Orders executed etc

Growth Strategy –

1. What are the various growth engines & how would we fire them
2. Product & marketing strategy to achieve growth. Are we taking away market share or trying to create a market.
3. The key milestone that is to be tracked

Cap table –

1. The current contribution of various founders & percentage they hold
2. ESOP plans, if any
3. Funds bootstrapped so far – both debt & equity
4. Commitments received if any

Funding requirements –

1. What are the funding requirements
2. How would the amount so raised deployed, break up of likely spends
3. The time period over which the funds so raised will last
4. Exit plans offered, if any

Team –

1. Roles of co-founders, brief background relevant to the current venture, link to the Linkedin profile, skill sets that the co-founders bring in, whether these are complimentary in nature?
2. Same as point 1 above for Key Managerial Personnel
3. In the case of a single founder, how the key man risk is mitigated,
4. If co-founders have disproportionate shares, reasons for the same.

Few broader points to be kept in mind:-

The Narrative in the presentation should be supported by numbers/data & underlying business plan. Mention the source of data, if it is an estimate, highlight that as well.

The PPT should ideally be a teaser – while it should give away key pointers, it should also create interest in the audience

The information should be concise, to the point & reinforce the moot point

Motherhood statements are to be avoided. The focus should be micro, while the vision should be macro.

The number of slides should not exceed 25, no agenda slides etc and the flow should preferably in the sequence mentioned below.

PS:- Don’t go by the pitches made by contestants in “Shark Tank”, these are good for theatrics and for entertainment 🙂