Don't have unrealistic expectations about valuations while pitching to a VC: Kalaari Capital's Vani Kola

Pitching to a venture capital fund is an important step in the fundraising cycle of a company. The "pitch" done by an entrepreneur is one of the factors that will decide if the VC will put in money in the startup or not. With the investment ecosystem getting competitive and availability of funds becoming scarce, it is important for startups to know what goes on in the minds of VCs and what they expect from a pitch.

We spoke to Vani Kola, MD, Kalaari Capital, on what startups should or should not do while pitching to Kalaari Capital—things that may make or break startups' chances of getting investments from the VC fund.

Kalaari Capital (formerly known as Indo-US Venture Partners) is a technology focused VC firm. It was formed last year when Indo-US Venture Partners raised fresh funds of about $160 million and rebranded. Its portfolio includes UrbanLadder, Snapdeal, Myntra, Hushbabies, Ovenfresh and Power2sme.

Here are edited excepts:

1. CEOs should take their role seriously: We are not looking for sophisticated presentations or business plans; instead, we want the team to have a deep understanding of what the presentation is all about. Often the CEO (or the leader of the team) does not take full ownership of the presentation. We want to see passion from the CEO, because at the end of the day we are investing in the entrepreneur.

Also, entrepreneurs should always pitch themselves, instead of getting the presentation done by someone else. That definitely raises a question mark.

2. Be realistic, don"t blabber: We get very unrealistic expectations about the business if the entrepreneur plans to deliver on the same without a sensible, convincing, structured way. We want to invest in plans that are executable and not something that looks good only as a presentation. We want to know and see the entrepreneurs' ability to execute. Along with this, entrepreneurs should understand opportunities as well as risks involved in the business. Having that clarity is very important.

3. Be ready for cross-questioning: Don't come unprepared and when the VC asks something, the entrepreneur should be thorough with their answers. We don't want to hear unconvincing responses and presenters should have full clarity on the various aspects of their business plan.

4. Entrepreneurs should not have unrealistic expectations regarding valuations.

(Edited by Joby Puthuparampil Johnson)