 Hi everyone, this is Sonali. Thank you all for coming out some time for attending today's webinar on the episode 22 of the Business X Learning series, Invest, Scale, Value and Exit. To all the attendees out there, please type in any questions you might have in the Q&A section and we'll try to answer as many as possible at the end of the session. I would now like to welcome our speaker, Mr. Gaurav Mara, Chairman and Founder of the Franchise India Group. A very warm welcome to you sir. Thank you Sonali and thank you for hosting another edition with Business X. This is the edition we started to talk about four things, how to invest, how to value, how to scale and how to exit your business. These are the four aspects which keep coming at different stages in your life journey. Today I'm going to talk about a very basic topic. We started having these feedbacks coming from a lot of young investors, people who are now looking to really go out and make a pitch and this is a good timing. Why? Because why this whole COVID, I think should be passed by next two to three months, at least with the vaccine out and I think there would be a little bit of comfort for people to really start becoming forthcoming in terms of going out and reaching out to people. So this would be also a good time for a lot of startups to now really actively seek investments and I think India would be in a good situation to attract a lot of capital, a lot of Indian startups would get capital and don't limit yourself by mindset that you are only going to be doing to investors around you, you can reach to any investor anywhere in the world but you need to have a very strong compelling business idea and you will do that. So I'm going to be next 20-25 minutes going to talk about how do you really make a pitch? How do you go and represent yourself? What are the rules for that representation? What are you messaging? What do you want to do? Because fundamentally is that people don't invest on anything they have, which means that if they have a thousand pitch coming to them, they might end up investing into 50 of them, maybe less than that. So that's how the ratio would work. So how do you really is one person who is out of that thousand which get recognized? And please try to understand that whenever people have made this pitch, you get a very small window, very, very small window for people to buy into you first, buy into your business plan and buy into that this would make money for you. Actually, if you really start every investor sits with the first fundamental that is going to make money for me, that's the fundamental but before even he goes to that fundamental and say this is why I want to invest, only the reason the investor would look at investing is because he wants to make money on this. But he needs to first buy into these two things independently, which is you and the business partner. And I feel that people a lot of time focus on business model, what they want to present in their product, how they want to go into the market and they don't present on too much focus on themselves. And I feel that that has more meaning to me because in order they would first have to buy into you and then into business and then really go on and say, oh, it makes sense that it can make money. So you need to be very, very particular. So I will give you about 13 different points which are very important when you're thinking what pitch. It's a very important aspect even if you're not pitching because in French in the ecosystem and business exit system, we also get a lot of people who are now looking to invest into existing businesses. They are going and making deals with franchise businesses. They are going, making deals with license businesses and so forth. So wherever you're going, even representing yourself and really want to do that. And I can tell you my first business which I really got was a four star hotel and I was very young and they all had a big nightclub and which they wanted to really give it to somebody. And they put a lot of investments and I think in my 24 or 24 and this club, they would have invested at that time maybe a million dollars even way back in Chandigarh and it was a four star hotel which had this club and I saw an advertisement and saw this advertisement says we want to have an operator with somebody who can come and take that club and run that club and I wanted to obviously every young 24 year old wants to run a nightclub and I had no experience. I had nobody with me. I had no clue what I'm going to do and I went to meet this owner of this hotel and he was a little bit rough guy and he obviously is the owner of this hotel and he gave me exactly 10 minutes and this 10 minutes was very important for me to really go and represent and say why I would be the best operator for this club and how can I turn around and make sure that everybody who's who of this city really comes here and do this and that. And I actually practiced it and I practiced it so well the next day when he gave me a chance and I know a lot of other big restaurant operators were eyeing on this and because it had everything, it had licenses, it had liquor license, it has beautiful set up, it has thermal parking, everything was right for this place to really be very very successful. So a lot of seasoned guy went with a little bit of arrogance and because they had they were also very strong, they were very popular and I went with the plan I had for that place. I never wanted to really talk about what I did because I had nothing to show because I had nothing which was available and I went and what I am going to do this. And I think the owner really saw the purpose, he saw the clear purpose that this guy is not about really what he's done in the past and he's not married, he has all that what he has is this and he's putting every bit into this and he will put his best to make sure that he's running. Other people have plan B, plan C, he has only plan A and he wants to make this work. So sometimes another big starting point is that if you go to somebody and represent that you need to show that this is your only plan and this is what you are putting your best and everything on it. When people see that your commitment and see that where you're coming from, they value that. That's where it really starts. So let's get started on the 13 points which are very important. First is pitch are normally very short and it should be like that because it's a pitch and that's what it's called. So you don't have to really ask for more time, you need to really understand that this is about 10 minutes which you would get with the investor, absolutely peaceful hearing and after that he's not even attentive to what you've done today and a lot of people want to drag it, they want to request for more time, they want more elaboration but truth is you have the 10 minutes and 10 minutes is good enough. Rather I would say if you start a pitch and say I have this next 10 minutes which I'm going to present and you actually finish it in 9 minutes and you watch full and you pray in yourself and you practice yourself and do that. Another thing which you need to do is if a lot of times you say this is what I'm going to present last that means it's last, you don't drag it. So I feel that a lot of people get offended by you not respecting their time or not really trying to do that or dragging this or putting a too much of focus on emphasis on few things which doesn't make sense maybe making a lot of sense for you and you really want to do this piece. I would suggest strongly that don't even bother and don't make your assumptions. Sometimes we try to put overdose of this because we feel that somebody is not giving you that kind of attention you felt. Stay there, stay calm with your own piece and do whatever best can be done and put your best in that 10 minutes and try to early wrap up. The second is turn your pitch into a story. I feel that people love stories they don't like somebody becoming and telling very dry. If your slides don't bind as a story with each other and they flow and you start with giving a larger reason why you're there what is the purpose of this what you want to create and what is the problem it is going to solve and then how you want to solve the problem and finally how this would create a value and bring it. So this all should be queued up why you thought about this why it came to you not to anybody else what was the reason and why you strongly believe in this. Second how you are planned to solve the problem which means that what is your go-to-market capabilities and how you want to really do that and what it can shift and who would be a potential tomorrow buyer which would come through. Eventually investor only wants to see this he doesn't want to see the first two right but it should flow it should look like that I am passing through a very very structured road and I can see the end of the tunnel very clearly you can see them there. I know a lot of people take them through but they don't take actually finally show them where it is headed to and there's a little bit of a confusion it's not very clear and especially the biggest point I have realized is that a lot of times it's a flow is right but you don't show go-to-market and go-to-market is missing and that doesn't come into the story. So you need to be a great storyteller how you want to really tell your story and be in that thing. Third point is be very very laser focused don't go all over don't spend time on things which makes no sense to anybody things which you would have done or things which you would have thought and things of that nature which is not currently part of the business anymore anything which is not relevant is out of the discussion. You have to be extremely focused and stay tight on the discussion itself. Explain what is your product and service which you are offering and how this product or service would be really one what is the proprietary level of that product or service how strong you are on the developer side of that product or service which you are trying to do that and what strongly the proposition this product would create in the market or the problem it would solve that's very very clearly should come out and how definite you are in that product and I can remember that sometimes we have seen some phenomenal funding like look at the case of housing and housing is a great example of a lot of good investors backing that company because the product was strong execution was extremely poor very very poor execution and the company went into drain and there was a lot of erosion of capital which happened but the product was so compelling that was very very compelling so a lot of people really chase good products they really chase good product in the service that's something has to come in and also you need to really be very sure about what is the uniqueness of the product and how you want to really do that people do a lot of competitors when they think through and whenever you present and why you would be so unique versus anybody in the world and these days there is a very little window left you know and and left even if you have something which is now having parallely been done in other some part of the market it's not far that it'll reach here so innovation is not giving you too much a window now so you really have to think through that how you would show your that your brand and your product is extremely compelling now again the next point is the sixth point is that how you would go and what is your target audience is what exactly is your target audience who is is your audience who's your customers how you would be able to demonstrate if you have a some kind of a sample size on that then it is even better but you need to really be sharp enough in terms of your target audience I don't like people giving a very wider piece it confuses because can you try to address and make everybody happy that doesn't work anymore I will say keep it as niche as possible keep it as sharp as possible so that you are able to do that now seventh point is where I would really put my max enforcements and I was I did in 2017 a 20-60 roadshow for startups and I was part of I used to go every city and I used to involve locally a angel fund sort of like Calcutta we do a Calcutta angels and somebody and then we did a gala in IIT Delhi a big big function where we got Akshay Kumar and other people to come down and and we we gave what the first award of a startup was getting a good reward but I had an opportunity to really go out and do about I think 750 different pitch and I can tell you I was always very impressed by the people who had a great product I still remember you know somebody came in an organic side of the building and things of that nature so every time I would get very strong product and a very poor go-to-market capability they would have no idea how this product can go to the market and that's exactly is frustrating to me because people spend a lot of time in understanding the product and design and other things and and doing the prototype but they have no clue how they would bring distribution to it and today I think if you're not having strong go-to-market capability you will not be able to get the results. Now eighth point is essentially about your revenue model you know how your revenue model would be done and this also is sometimes explained in a very vague structure it's not very clear and how you're going to be taking the company what kind of revenues we can expect where the revenue is going to come from why we feel that this channel versus that channel will perform better and all that pieces is very very important. The revenue is now particularly these days because startups especially when they getting early stage investments investors are nervous because they know that if they're not having a right firm timelines on revenues started flowing in they might be in a danger so you need to really be sure that you are able to not only define it but you are absolutely firm on your revenue model. Now we'll start on the some of the other aspects which are also equally important because as I said in the initial starting that it's actually a combination of three things which FH should do one is buying into EU, second your business model and third is how can you demonstrate me that this is going to make money. These are only three things which you would need to carry and you need to be very sharp if you've given 10 minutes three minutes three minutes and three minutes that's the game of a pitch so now if it is all about you then I would presume that how you really represent yourself how excited and how passionate you are because you cannot fake passion and this is something which really comes out and most of the times it's not said it's not presented but they would sense it how excited you are or how enthusiastic you are about your opportunity or the business you want to get in. If that comes in very very clearly then I think the investors are normally very impressed and to compliment that you need to look good you need to dress well you need to represent well and so on for every smallest thing really works and a lot of people actually counter me that this doesn't work I mean but I tell you it works because your personality is your window and anything we do in life there would be something people would freely judge out of your personality and this can be not dependent on that but our biggest example today and sometimes it's criticized also in the social media is our great Prime Minister if you look at him you know I always have seen him he's one of the best dressed man he carries himself well it's not for fronting and what he can do he can at his position he can do entire thing but he's representing a nation he needs to be very well dressed man he has to be the most presentable in that thing and there should be no shame on doing it he's doing a duty it's his duty to be really rightfully present he is not representing he's representing one of the powerful economies of the world uh India is going to be and he's headed towards the third largest powerful economy he's not going to represent poverty that's how a lot of people don't understand that so so he's doing the right thing so you need to really represent what you're representing you don't have to be somebody who shies away from doing it so if it means to buy a new suit or a jeans jacket or something of that nature you need to do that and you need to really do that and this sometimes we really see in the in now in the culture where sometimes people kids are young young people really come and they they sound like they're just out of college and they're they're working on something and I think it worries me because I sometimes feel that if he's not looking after himself well how he would look after the company and this was actually one of the companies which Anila money long time back said he was used to Anila money was really heavy and very very heavy guy and he went to one of the lead investors globally and and lightly the investor said to Anila money and said look you're not keeping yourself well and you're not fit enough and I hope that you were keeping the company fit and that's where here the marathon really started and and that's where his thinking started that if I don't keep myself fit and represented well then how what I want to keep the company right and this used to be a very important evaluation process in yum restaurants and yum restaurants on kfc pizza had Taco Bell and things that in US they used to really visit by by any excuse they would visit the potential franchisee and they would go to his home and see how he's keeping his home because it was very important for them to really see that if somebody is not even keeping his home right how would he keep our restaurants right and and this used to be a certain thing earlier they used to do that now they don't do it because it's it's getting into a people's personal life and things of that nature is not so appreciated and that's why they really started sharing that we used to do it not for the purpose of just barging into somebody's home but essentially finding out how you are inclined towards hygiene safe cleanliness and upkeep of your environments and so it's it's one of the important areas needs to be done 11th is practice it just don't overcommit to yourself and estimate yourself practice your pitch you don't need to really go out and practice and then then go out and represent plus point is how anticipate all the questions beforehand you you cannot be somebody who doesn't answer especially the tough questions right because you always know what tough question can hit you and you always know that people can question you or pull you down on on the numbers or projections or or things of that nature or any kind of platforms you're really doing it you're not studied them back right so if I come to you and say look I'm going to be how you're going to distribute I say I will use the platforms like Amazon to really take my market to the end I think but I don't know how Amazon works and why Amazon will do it and what margin they need to shell out and things of that nature if I don't know that in depth then you can be caught you can be caught on areas which you're taking a lot of claims because most of the times you're making projections and claims and say well this happens and then this would happen and this would happen so if they are not connecting the dots and they are not connecting as we go along then it can be a serious problem and finally show them the exit this is the fundamental this is where the end point is this is cherry on the entire cake you can build the cake but you need to really see the cherry there is a cherry and that cherry is show the exit clearly tell them that this is where and this timeline this exit would happen and what is the exit meaning to you is is it going to be another investor who would come and acquire the company is an acquisition which would be done or we're going to do another round where the lear investors can find the entire thing or any other answer which you clearly is logically available for the kind of investment you're getting in and and his appetite also study the investors you're going in understand what they have seen in past their success stories their failures in investments they've done so their success stories would tell you a lot of things in their the way they would have attempted why they would have attempted and if they have really made that if I was an investor and then I've really done well in something you already know me very well I think investors are more predictable than entrepreneurs who are pitching actually it's it's other way around you are very very clearly you can predict what this guy is all about you know how he reacts these days like in courts you go the the judges are very predictable because and all the lawyers seeing a lawyer is to know if this goes to this bench this is the kind of reaction he can have because they have seen the trends in past they have really seen the the trends in past with them and that's where they would really change the strategy they know what to highlight what needs to be and having what he would normally like to hear so do your homework do your homework on a lot of things on your investors which you're going to pitch but my message now is that start pitching you know this is a time where you the markets are opening up and if you have a good startup idea and if you have a good model this is a time now to start this why we took this as a point because we feel in the last six seven eight months the overall you know excitement with entrepreneurs to go out and hit new investors has gone down and because they don't estimate that this is the time where a lot of investment would find I think I can tell you this is all opening up and it could become even more aggressive in the next two quarters so if you have a good brilliant idea and a business model start looking out for for reaching out to investors and start making your pitch to these investors. BusinessX also continuously does a lot of these business sessions where you can be part of it and you can also use and do that and if you have any other need from BusinessX in terms of valuation or help on on you know resells of a business that also BusinessX would do so over to you Sonali if you have any questions for me I will be more than happy to take a couple of minutes more questions and then we can close this session. Sure so thank you so much for another great session Gaurav sir we have quite a few questions lined up with us so I'll just take up the first one the first question is if I meet an investor in a networking event or manage to connect with them over a call is it right to seize the opportunity to pitch my startup idea to them or a very formal setting like pitch rooms organized by various firms are the right way to go to approach an investor? Good question so it depends purely depends on the investor's mindset at this moment and I would say the whole word elevator pitch came from elevator why because you take an opportunity to present in elevator also and so fundamental is that you should never have a problem in terms of when you want to really present you can present anytime but don't go into it offence people if you don't take their permission you know so that's something which I'm a strong believer while we all hear this product and I think that people have done elevator pitches and and got this and that piece but this would be one percent of the chances but 99 happened in the board rooms where you were formally presenting so a lot of people actually talk about all the things that happened in life and they become more popular but actually 99 are structured pitches and that's what I would have seen right so I would say always take time sometimes people are looking on that subject and they're always looking at it and when you throw your elevator pitch and say this is what I do and I know about you don't go like strangers you know I was in one of the big event actually my wife was speaking in and she took me along is the biggest investment even happens called a web summit and and I was not speaking and I was just visiting with her and and I saw a lot of young people coming and just giving me cards and giving me this piece and then I just was collecting and I would tell that why are they just wasting on me because I'm not even here before as investor capacity so but that's something which people do you don't know me and you're just trying to do this piece that doesn't work I feel that you need to do a little bit of intelligence and these days it's much easier you know you know who to go who invest in where why they would invest what are the past investment then when pitch and very short take his approval and and I see a lot of people in comes to our forums when they would get a good idea they would just I will see them sitting in the corner with understanding with this idea and want to do that and if they interested they would call you again right the next question we have is how do social impact startups get funded that is startups which are not specifically highly profitable but exist for a good cause and reason is fundraising a good idea for such startups yes there's a lot of social startups which are there because they are earmarked investments for that and and if there is a cause good there is a big startup available if you really ask me globally the biggest money is spent for good causes you know and and even in 2021 you will see what where the money would be vegetative for the most successful economies of the world it would be you know climate it would be recycling it will be you know energy saving so not these these are monies which are which are long term for human kindness which its fundamental is money follows it but you need to be very careful where you want to really go and pitch that idea but and investors also have a larger cause and they are very clearly mandated to do that some investors have a different cause and different have different cause right the next question is do investors believe unbelievably high financial projections or do they like startups to be realistic realistic absolutely and it's not that they believe or not believe or in that you need to live with what you present and mistake people do is money raising is a very small part of the cycle if you present unrealistic it's foolishness people do they present unrealistic and they still get money and that money is actually benchmark of what you presented and they lose most of the shareholdings and I've seen investors original founders reducing to 2% 3% 5% of their shareholdings because they were unrealistic they put the future projections and investors are sharp they would put and hold you for future projections you don't reach that they would change the equation of disproportionately their equity holding and disproportionately equity holding would mean that they would take a larger shareholding now in your business and this can really take your company away and a lot of these founders suddenly surprised and then they are not part of the company why because of the projections wrong projections sometimes investors are sharp their sharks rather so they they actually see between guys they know you're claiming hair but your hair this is also good but because you're claiming hair I go with this and if you don't reach there I'll change my shareholding proportionate and and that's something which you have to be realistic you need to be realistic you need to really see what you're offering and why if it doesn't happen there what are the circumstances you can get into absolutely the next question we have is how should we differentiate our offering from competitors in case our product or service is in itself unique if your product or service is unique then how you compare with competitors yeah so so fundamentally the answer is that so your competitor is like for example if I was smaller and pitching what would be my competitor my competitor was auto companies who were selling cars and people using buying cars and using or my competitor was regular taxi service both were actually my competition because I was in a mobility space I was helping people to go from one destination to another destination that's what my space so sometimes there are direct competition sometimes there are indirect competition right and and what they want to address is on one side they want people to not buy cars and use public community and much more I think and second side they want to be in discourage and so actually if you really ask me Ola made a pitch more for that my competition is people not buying cars anymore they should use me I'm more economical and much more safer and much more in comfort and somebody would drive me out and I would have maybe save more money so that was the big pitch and that's why the business became very very big otherwise they would have been another taxi company or any other mobility company which was other companies were there so because they chose a bigger competition and showed that this is better where you want to really make a big dent so you need to really see if your product is unique and the difference of what how people consume whatever they're consuming are going to shift to you and if you're able to demonstrate that shift then it is an interesting pitch right another question we have is is private investment network more useful than IITs or NITs investing in startups both are useful depending on where it needs to be done so if the question is that you need to also bring in the credibility of the investor investing in the plant I think yes absolutely people follow who has invested sometimes your business especially in the early days has no not so much a foundation and your bouquet of investors would really demonstrate I also know that some of the investors because they've done a good PR they are abusing this situation so they go and take equities for just sitting there and take very low investment cycle and then the entrepreneur would go and shout everywhere and say oh one of the co-founders of this company is my investor and because of him you will be able to attract other investors this is okay because there's some time work like a gate openers but a good genuine investor should not really do it just by your you have that your profile you should really go for and help these entrepreneurs to really require and help them to mentor to them he's bringing mentorship I can still understand but just bringing your marquee investor on board it doesn't really to me it's making a lot of sense because a lot of bad investments have happened in the last two three years particularly with the companies we are invested by these marquee investors right another question we have is how big should a team be to pitch to an investor for the initial funding round according to you sorry I just missed your point how big should the team be to pitch to an investor for the initial funding round team should be co-team I think if you can just be co-team and the co-founder and I think you need to take your own heavy lifting and founders are the main important you cannot hide behind the team you need to be in the front and you need to take responsibility and their critical areas like technology or other things you need to have some co-founders along with you who are also committed and being a part of the system for a very long period and I'll just probably take up the last question for the session it's a rather long one so the question is I have come across a couple of investors for my pitch they both have shared very different pitch formats and asked us to remake the presentation in the given formats now the format they have given states only one slide for multiple subjects like marketing strategy and capital justification we were ready with a separate presentation for that and now I'm not able to compile all of that in just one slide also they all have a common question for which we are not able to come up with the answer they are looking for the question is why should we not dislodge your position from the firm yeah sure so I think this is happens all the time where somebody would ask for what they would like to hear and what somebody else would like to hear and and this is a difficult proposition but there is also another thing what you want to tell so so while you try to accommodate what they want to hear but you need to really go out and tell your story and it has to be complete and I know a lot of times you get deviated because somebody wants to hear you something and and you stick to that part and don't tell the whole whole picture it's like somebody wants to really see one side of the painting and doesn't want to see the full painting it actually is to me wrong because he might presume that he moves the balance side of it and and wants to see only this part which is sometimes can offend somebody and say I told you only I want to see this but not this but truth is you want to be smart enough to really show the full painting so if you're not getting an opportunity to show that I can tell you without him making I think you will not get there so you need to really do that while time is fine if the argument is that he doesn't have time that he wants you to do all that one slide one slide when a person tells you is not that he cannot want to see second slide or third slide he has a limited window he wants to give you five minutes so you need to be smart enough that you want to use that five minutes creatively to show the full picture and picture is you business model and how he makes money three things if you're not giving these three things very clearly you who are you and why you are so important to this business at this moment at least and how do you get out of that and your position would be redundant as going over this is how you build enterprise that's a pretty point but at this stage you are critical and your business model and how you he's going to make money absolutely so lastly sir we have a few questions from people who are asking us about the process of business x helping such startups in creating their pitch decks or in helping them reach out to investors so anything you would like to add on to that business x is a platform designed for early stage businesses uh ideation stage businesses young entrepreneurs uh who are now looking to reach out to potential investors from helping them to create pitch decks or to create their IMS information memorandums to create their valuation uh to negotiate with the investors all that pieces are done by a business x it's a largest platform for early stage businesses business x is also a platform which encourages every three helps you to resell your businesses say you have a successful business and you want to now resell that business that also business x does uh so it's a it's a platform and if you have any particular queries or anything which you need to do I'll also put my email id and you all can reach me and obviously Sonali because she is the lead for business x and she will be also helping you to do that if I am at gm at coromaria.com thank you so much Gaurav sir for another wonderful session and and very patiently answering all our questions like always it was absolutely wonderful having you here anything you would like to say in the end only thing which I would say is that we have uh passed through the most difficult time in in our generation I think at least uh I would say uh in last about 47 48 years since I am I've not seen a situation like this uh this is past uh but uh good times are around the corner and if you really uh having a good idea in a business model this is your time to really hit out don't wait because you will miss out the opportunity what it present to you so this would be the next two quarters would be very very important and uh uh you need to not miss that opportunity so align yourself compose yourself and go out and there's a lot of investors out there who are looking to invest on your good idea absolutely thank you so much once again and thank you to all our attendees we really hope we were able to add some value to your life through this session and we'll see you next time we have this session every uh saturday at three o'clock so please tune in next saturday at three and uh thank you so much for once again