At the Nasscom Product Conclave I attended a workshop by Shekhar Kirani, Partner Accel and Prasanna Krishnamoorthy, Partner Upekkha Catalyst, on how to build a ‘Venture Backable Startup’ – the Holy Grail of Startupland!
According to Shekhar the first thing to understand is that there are two paths to glory in Startup land. Bootstrap your way or raise VC money. If you choose the later here is what is required.
1. There has to be customers with a problem that need solving.
2. Design the solution, validate it, get initial success, raise VC funds and scale.
3. VC’s look for very large markets : in B2C it could be How many orders / day or rides / day; in SAAS it could be the TAM.
4. Good market size would be typically $2.5B to $100Bn for B2C and $500mn to $1.5B ARR for SAAS.
5. The frequency and duration of use with room to sell more to the same customer.
Prasanna’s session was about a Founder Market Fit. As a founder you will need to evolve from a specialist to a generalist and back. Then you figure what is the problem priority in the customers organisation which will lead to your value definition and pricing.
What I loved was the deliberate intent to make it accessible.
The final summary. Make this your communication template for your pitches to VC’s.