VC money follows customer money

Takeaways from Guest Sessions by our students Kaushalendra Yadav & Nivedita Kamath
Guest: Anurakt Jain, Investment Manager at Vertex Venture Management.

Purpose of the session

Our session for the day was to conclude our orientation problem- creating a business plan.

Spring class of 2014 had the first task to create a business plan. They were divided in groups of 4-5 and had to work with each other to conceptualize the idea, prepare the marketing plan, financial plan, market sizing, risks and challenges and unit economics. In this session they had to present the idea to a VC fund manager and get insights and his views on it.

Industry Speaker

Our guest at contact program for class of spring 2014 on 24th May 2013 in Bangalore was Anurakt Jain. He has done his graduation from IIT Delhi. He ventured in entrepreneurship during his graduation. He then worked as analyst in couple of firms, also finished course of “Chartered Financial Analyst” from CFA side by side. He finished his MBA from University of Pennsylvania – The Wharton School. He specialized in organizational effectiveness. Currently he is managing funds in Vertex Venture, a Venture Capital subsidiary of Temasek.

Feedback of the business plans

Business Plan 3 VC money follows customer money

Anurakt was interactive and asked pertinent questions related to what value the business was adding, market sizing, and feasibility.  He pointed out that presentations missed the slide where they needed to mention how much money they intend to raise from VCs to begin with.  When students asked whether he would invest in their businesses, he said that VCs in India prefer to come into picture when the business has shown some growth or captured some customers. He also said that, customer money is the best mone

y coming into a company which is a good signal for the VC. This does not hold true for very early tech deals, but VCs are able to draw inferences about the potential customer intention. He mentioned about three Ts that VC’s look for:

  1. Team: First thing VCs look is about the team, how complimentary they are with each other. If they have any past in entrepreneurship, if yes then how did they fare.
  2. Technology: What technology they are developing or using. Most importantly, the differentiation of what the company is building.
  3. Traction: Whether there is a large market and how quickly the company will be able to gain market share.

However decision making for a VC is definitely more complex than the three T’s, which is a simpler heuristic to go by.

Takeaways from the session

  • Think non-technology as well:  India requires business model innovation coupled with technology innovation. If an idea is great, any industry or business can get VC funding.
  • Presenting is storytelling: From the presentation point of view- story matters, so rather than presenting some facts, we should try to tell a story.
  • Deliver value: Entrepreneurs must ensure that whatever they do they should concentrate on what value they are adding and how they are differentiating themselves from others.

Overall, the session and interaction with industry guest were engaging, enlightening and interesting. We look forward to have more such sessions!


Kaushalendra Yadav BlogAuthor VC money follows customer money

Kaushalendra Yadav

Kaushalendra Yadav is Team Lead with Symphony Teleca. He is currently pursuing PGPM with Sunstone.

Nivedita Kamath BlogAuthor VC money follows customer money

Nivedita Kamath

Nivedita Kamath is a Senior Consultant with Capgemini. She is currently pursuing PGPM with Sunstone.

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