Microsoft for Startups’ Lathika Pai says entrepreneurs pitching for investments need to have this one question – Business Insider India

• Startups that continue to find opportunities during the pandemic are seeing increased interest from investors, even if it comes at a lower valuation.
• Microsoft for Startups’ Country Head Lathika Pai says startups pitching to investors right now should have the ability to forecast the next three years.
• Pai said that the investment depends on what the entrepreneur is forecasting he/she will achieve.

When the coronavirus pandemic began in February, investors turned cautious and held on to their purse strings to watch how the pandemic unfolds.

According to Tracxn’s India-Tech Semi-Annual Fact Sheet, the Indian startup ecosystem has seen the worst first half (H1) funding in three years. In the first six months of 2020, startup funding has fallen by 29% – from $5.9 billion in 2019 to $4.2 billion this year.

However, there have been major exceptions. We have seen the biggest of investors pouring money into Reliance Jio, edtech heating up with Byju’s turning into a decacorn and Unacademy at the door of the unicorn club, and several other startups continuing to raise investor money. Startups that continue to find opportunities during the pandemic are seeing increased interest from investors, even if it comes at a lower valuation.

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Microsoft for Startups’ Country Head Lathika Pai, who is also the co-chair of the India Internet Day event organised by TiE Delhi NCR, agrees that while startups might have got a better valuation six months ago; the quality of money is also greater now, as the likes of Google, Facebook and of course, Microsoft set their eyes on the burgeoning Indian startup ecosystem.

The key to success for entrepreneurs now

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But here’s what Pai believes should be an essential element and part of the pitch deck of entrepreneurs now – the ability to forecast the next three years. She said that nobody yet understands exactly the ripple effect that COVID will have or will be able to predict the next 12-24 months.

“You shouldn’t go worrying about everything because it all may just be smoke and mirrors. In my discussions with VCs I know that investors are asking startups the question – do you absolutely need the money right now,” she said during a live chat with Business Insider.

Pai added that the cheque depends on what you are forecasting that you will achieve. “If you aren’t able to answer these questions, come back later for the investment – when you have the better ability to forecast the next three years,” she said.

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For startups to predict the next three years, they need more information of what is going to happen. “You don’t want to create a spreadsheet with numbers without quite understanding the impact that COVID has had,” said Pai.

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