Some months ago, I had the privilege to attend a talk by Mr. Ajeet Khurana, a well known angel investor and venture capitalist.
The session was held at Venture Catalysts, a co-working space where startups can have access to a huge network of investors and fellow startups.
So back to the session, it was an interactive session in which sir Ajeet Khurana mentioned the 3 filters that a startup has to pass through before the investor decides to provide some funding. According to him, these are the three pivots on which an investor judges a startup. So, without wasting your valuable time, let’s get straight to the point.
The first of the three checkpoints is
Whether a market that you plan to tap into, exists or not!
First thing you need to prove that a market that you wish to enter actually exists! Because assumptions simply don’t work!
If you are planning to launch a youth app, you can’t say that out of 7 billion people in the world, 50% own a cellphone and out of those 65% are in the age group that we are targetting.
It doesn’t work that way. You should have a precise market and a proper target age group of people.
Whether a startup can tap into it or not!
This is the second filter. Now, the question here is whether or not a startup tap into the market! Keep in mind, it’s not about whether you can tap or not. It’s about whether any startup can tap into it!
Not every crisis that exists can have a solution which a startup can solve and make money out of it at the same time.
There are certain issues which privatised companies cannot tap into.
Now, the final filter,
Whether you are that startup or not!
The most important question of all.
After you prove that the market exists and it can be tapped into, you need to prove that you have a team that has the ability to extract the most out of the opportunity. This is the final filter you need to get through.
Are you the ones who have the potential to make the most of it? Are you fully committed to the cause? What is it that connects you with the idea?
These are the three filters every startup must keep in mind when presenting at a Business plan competition or pitching an idea to an investor.
So, to summarise it in short,
If you find a lake,
Whether there are fishes in the lake?
Are the fishes catchable?
Can you be the fisherman?