How to Structure the Business Plan of your Startup?

A business plan should essentially cover three aspects – what are you going to do, how are you going to do it and how will you make money. Watch as Prajakt Raut highlights the key components of a good business plan.

“How do I convince investors to invest in my start up?”

This was my response to a question on Quora by an entrepreneur who was planning to pitch his idea to investors.


Investors will invest in your startup if they are convinced that their investment in your venture will multiply over a 3-5 year period. Therefore, to convince someone to invest in your venture, you need to excite them about the business case underlying your concept or idea.

Of course, the ideas has to be good, it has to address a large market opportunity, the value proposition has to be strong and the product/concept/service has to be (or has to be thought out well enough) to be well delivered. But while these are necessary conditions, they are not sufficient conditions for someone to invest in your venture.

Hence, while presenting, ensure that your pitch focuses on what you intend to do, how you plan to implement it, AND how you will make money from it, what your scale of aspiration is and why you and your team is the one they should bet on.

Most entrepreneurs make the mistake of diluting the pitch with a lot of detail of the operations, which of course will be of interest to investors… but only after and only if they have an interest in participating in your journey.

Investors are interested in the business case… not just details of the concept or the product. A concept and product is different than the business case for the same. (Most first-time entrepreneurs make the mistake of elaborating on the concept as the business). E.g. for someone presenting for a e-tailing venture, the investor would be interested in knowing your competencies or plans on supply chain, warehousing, procurement, customer acquisition, etc. Not just about how cool your web platform is.

Focus on key aspects rather than fluff around your business case. In most cases you will get a 20-30 minute window to present. You will have 10 – 15 minutes to make your case with 10 – 15 minutes for Q&A. In fact, in most cases, you would have either got their attention or lost them in the first few sentences. Rehearse your opening lines… once you get through this, the rest is the easier part. If you don’t get their attention and interest in the first few sentences, the rest really won’t matter that much.

“According to Gartner the market is 8 bn USD globally” type of line has no meaning for investors. At startup stage, investors are interested in knowing what you are going to do in the next few quarters. Of course, they would be keen to know whether the market is large and how large. But in most cases, industry reports on the size of the industry is no indicator of the size of the opportunity you are addressing. You should focus on presenting your plans and what you intend to get to in the next few years.

Happy pitching. 

Pitching your idea in ONE minute

Often entrepreneurs attend conferences and industry meetings where they have an opportunity to network with and meet investors. But, often these opportunities are not well utilized and entrepreneurs fail to get the complete attention of the investors.









Here’s why:

Through the day, investors are flooded with proposals, calls, mails and face-to-face interactions, where entrepreneurs request for meetings.

It is impractical for investors to accept all requests, and therefore, they end up using some criteria to filter and select, who they would like to meet. And, in the absence of any other criteria during one-on-one interactions in business conferences, the criteria used is the entrepreneur’s ability to clearly articulate the concept and the degree of passion driving that concept. For example, during the brief interactions at conferences, investors tend to seek more information, either through a longer conversation (rather than just giving a card and saying “Send me a mail and we will see” ) or calling for a follow-up meeting, from those who leave them with the feeling “Ah, this seems like a good concept, a good business case and this person seems to be sensible and smart enough to build a business”.

Here’s a list of things you may want to consider, when attending networking meetings where you may meet investors. The key message here is that you need to PREPARE a brief pitch, practice it and deliver it as if it is extempore.

  • Keep a 1-line descriptor about your company ready. When someone asks you what you do, rather than going into a long story, you should be ready with a one-line answer. (e.g. the descriptor of The Hub is – we help startups build sharper business plans).
  • Convert this statement into an introduction. e.g. “Hi, I am Prajakt, co-founder of The Hub for Startups. We help startups build sharper business plans. We conduct a 3-Day Boot Camp and a 1-Month Business Plan Builder Program”. Pause. Wait for the other person to respond. Add on more information, only if, there is build-up of interest and the conversation continues. Else, it becomes a monologue with just meaningless and disinterested nods. Not all investors attend conferences to seek entrepreneurs and hence, even if your concept is interesting, they may not be receptive at that forum. In such cases, it is best to leave your business card and move on with an email as a follow up.
  • At the back of your business card, put a 2-3 line descriptor of what you do. Because investors meet with a number of entrepreneurs, it is difficult for them to remember who you were, especially if the name of your company does not explain your business. e.g. if the name of your company was Travel Guru, you may not need a one line descriptor. But if it were 5 Clove, you will need to put a descriptor, so that the investor later remembers you as that ‘interesting’ person whom they would like to have a follow-up meeting with.
  • If there is interest in continuing the conversation, then provide additional information. E.g. “Our programs are quite popular with aspiring and recent entrepreneurs and we have had several success stories. We are now in our expansion phase, and that’s why I am at this conference… to present our business case to potential investors”. From here onwards, see how the conversation goes. But be prepared with the list of things YOU want to discuss and want to highlight.
  • Make a list of the key messages and highlight what you want to mention during your conversation e.g.
    • Entrepreneurs background (if it is relevant to what you do e.g. If you have worked at e-bay before and are now starting an e-commerce company, it makes sense to state that. However, if you were working with a healthcare company, and now starting an e-commerce venture, that may not be the most important point to state at the first meeting).
    • What have you done so far –  This could be about the background research you have done, the prototype you have built, the concept validation you may have done, the traction you may have got, the initial feedback or orders from a few initial customers. Essentially, it means, you may want to be prepared in your mind with a list of things that you have done in your entrepreneurial journey. (And remember, the journey begins not from the moment you start your company, but from the moment you decide to be an entrepreneur).
    • What are your aspirations and goals – Investors like startups with large aspirations. But when stating your aspirations and goals, be as specific as possible. E.g. Saying “We want to be the leading e-commerce company in the school supplies segment” is not a good enough statement for anyone. You may want to say “In the next 3 years, we aim to be among the top 3 school supplies businesses online. And our plan is to get to about USD 10 million in 3 years, and in the next 10 years or so we aspire to be anywhere upwards of USD 250mn in revenues. We believe the market potential in India itself to be about USD 1 billion”. Sounds better, doesn’t it ?
    • How much funding are you looking for and what will the monies be used for – the key to this answer is specificity. Different investors invest in different stages of a venture and hence it is important for them to assess whether your stage is right for them, and if the amount of investment you seek, is within the range that they want to invest in. (Often entrepreneurs end up asking for angel/seed-stage funding sums, which are often much lower, from VCs who typically invest higher sums of money. If you need USD 50,000 to get going, there is no point in seeking that from an investor who typically invests upwards of USD 1 – 2 million. Therefore, do research on different investors so that you are well aware of whom to target.).

Be specific about how much money you need e.g. “We are currently past our concept stage. The model is proven and we are now ready to go beyond the pilot stage. We are now looking for USD 250,000. This will be used for building our team for expanding our reach to 5 more cities and marketing. This money will last us for 18 months, after which we plan to raise another round for growth.”

Most importantly, after attending business conferences and industry events, be disciplined about writing to those you interacted with. Keep the mail message short and personal. DO NOT CUT-AND-PASTE A STANDARD MESSAGE ABOUT YOUR ORGANIZATION. No one reads through that. The intention of the follow-up e-mail is NOT to spread information about your company. It is to gain their attention and establish a relationship, or at least get an opportunity for a follow-up meeting.

Happy networking.






What should be the answer to “What if Google builds the same product as yours tomorrow”?

The right answer for you is the one that YOU have identified for yourself. If there indeed is a possibility of Google doing what you intend doing, then as a part of your own risk evaluation you need to identify what your response could be.

In a few cases, the answer was “Well, if Google really wants to get into this business, they would be the first one that they should try to buy.”. And that would work well with investors !!!

5 mistakes to avoid when pitching to investors

With most VCs, you will get just one chance to present your business case. VCs are usually a skeptical lot because they see a lot of bad presentations.

Here are some mistakes to avoid when pitching to investors

  • Poor assessment of the risks in your venture: All businesses have competition. VCs are not looking for businesses without risks… in the businesses they are in tested in, they are looking for teams who understand the risks and have a plan to manage the risks.
  • Poor assessment of the competition or assuming that there is no competition: If there is no one else doing what you are doing, how are the consumers currently solving the problem? E.g. in a online food ordering business, just because there is no other brand dos not mean that there is no competition. ‘Calling up the restaurants using menu cards available at home’ is your competition.
  • Exaggerating management strengths: Remember, most VCs will do due-diligence… and most are experienced enough to know what is practical and what is fluff. E.g. for a professional with 2-years experience to claim “In my role as Client Services Manager I was responsible for formulating strategy and operations planning for fortune 500 clients” is usually not going to be an accurate representation of your role. However, “was involved with” instead of “was responsible for” is perhaps closer to reality.

Also, giving the right picture of your current skill sets and capabilities helps investors understand what assistance they may need to bring to the table, in case they decide to invest.

Investors are not looking for ‘we know all and we have been there done that’ teams… those are rare to find. Investors are interested in honest teams who are passionate about the domain and are smart enough to learn the things that they currently don’t know.

  • Impractical and unrealistic growth projections: While aspiring for scale is important, planning ‘how’ you are going to achieve it is critical. Without a plan, aspirations of scale are merely a statement of intent. Investors invest in a team with pans… not just on statements of intent.
  • Don’t include names of ‘advisors’ if they are not genuinely involved. Plain show & tell names just because you know a few people don’t impress investors.