August 14, 2020

An Entrepreneur’s Guide To Get Angel Investment Networks In India

Any startup needs funding to get started before it becomes a full-blown business with huge turnovers and customers. The necessity of initial fund injection by an investor, and their ability to validate the business model, develop a pilot, establish a connection with the first customer is extremely crucial for any entrepreneur. An Angel Investor or Angel Investment Network moves beyond cash offering and creates a mark in the entrepreneur’s career by giving the startup a firm ground and the ability to start.

As per the latest report of 2018, Indian startups raised around $173 million in Pre-Series A and angel rounds. The hands-on experience, the access to a vast network and the extensive resources make the Angel Investors invaluable to startups.

Who are Angel Investors or Angel Investment Networks?
Angel investors are individuals or organizations who invest and provide capital to new or small business ventures, along with strategical insights for start-up growth and expansion. Angel investors are typically wealthy individuals who have a high source of cash available and seek a higher rate of return than they would be given by more traditional investments. They are mentors, guide and more than conventional investors and bring other relevant effective assets to the partnership while staying away from the day-to-day management of the business.

Why are they called Angels?
Angel investors are known as “Angels” as they often invest in risky, unproven business ventures for which other sources of funds, such as bank loans and formal venture capital are not easily available.

What do Angel Investors or Angel Investment Networks seek in a small business or startup?
It is quite daunting for first-time entrepreneurs to raise capital for their business. Several Angel Investors or Angel Investment Networks have certain checkboxes that need to be filled before they take interest in your project, inject money or even give guidance and time to your startup.

Here are a few questions that you might face -

How huge is the market that your company is looking to cater to?
This ‘huge’ involves the current as well as the future scope of expansion. Be prepared to answer why your offering is unique or different from the other market players, what are growth drivers, how to plan to grow or expand in the upcoming years. If you have a new offering in a promising industry, it is easier for you to catch the interest of the Angel Investors.

How well is your team positioned to create a mark in the market and execute the business idea and become a market leader?
It is necessary to pitch the strengths of your entire team while sharing domain expertise of the core team, complementary skill sets, the chemistry between the team members and why you feel you can be considered an authoritative figure in the market. While the business idea might be pivotal over the time being, the responsibility quotient of the team contributes to the failure or the success of a startup. And an Angel investor knows it very well.

What is the traction metrics?
Revenue, channel partners, number of clients and users are extremely important for the business as well as to attract the Angel Investor.

These metrics highlight that your offering has already started creating ripples in the market and you have an upper hand over other competitors. Real data with a good progress report put a seal to your claims and positively pushes an Angel Investor’s interest.

Is your offering investor-fit?
It is one of the most crucial parameters that an entrepreneur needs to keep in mind while approaching an angel investor. It is indeed like a puzzle, and you need to crack it. While considering the industry target, company stage, you should also look into the investor’s experience in the relevant field. Angel Investors are more likely to come on board when there’s a mutual connection between the Angel investor you are approaching and the field of your business.

What is your company’s X-factor?
This is a tricky area as this can be anything and everything. This click moment between the investor and the entrepreneur highly affects the investment decision.

These factors are not the only ones, and there are other factors as well that have a part to play in getting Angel Investors on board. There are times when you can get the cheque instantly or sometimes second meetings are also not enough.

Where to find Angel Investors or Angel Investment Networks in India?

An Angel Investor entrusts others with his/her fortune and provides required support and mentorship to ger early-stage challenges.

Here are some active Angel Investment Networks in India that cater to startup funding -

Indian Angel Network
Established by Alok Mittal in 2006, The Indian Angel Network gives access to mentors, networks, and insights on strategy and progression along with giving the funds. The organization has over 450 investors, spread across 10 countries. The deal size ranges from $400K to $1 million. Some startups funded by the organization are FabAlley, Pretty Secrets, Box8, Druva Software, adStringO, and LogiNext.

Hyderabad Angels (HA)
Established in the year 2012, with the motive to nurture aspiring entrepreneurs, HA, today, invests in promising startups globally to create tangible as well as intangible value. They have more than 120 investors and a striking presence in India, across Asia, Europe and North America. Along with a partnership with 25+ companies, this organization provides value beyond capital and has made 35+ business investments and 5+ successful exits. Their portfolio companies include Metamorphosis, Toch, Health Sutra, Fracktal Works, Indian Money, Identis etc.

Chennai Angels
They have 94 strong investors and have invested in 37 startups to date. It includes CloudCherry, Ketto, and BetaOut.

Apart from these, there are other Angel Networks in India like Venture Catalysts, Mumbai Angels, Chandigarh Angels and others. While these are Angels Networks, some Angel Investors who are actively investing in India are Ratan Tata, Srini Koppolu, Rimpal Chawla, Kishor Ganji, Pradeep Mittal, Sanjay Mehta, Kunal Bahl and others.

Earlier getting an Angel Investor in India or approaching the Angel Investors Networks of India was difficult. Nowadays, Angel Investors and Networks in India are not only approachable but also beneficial for startups. Angel Investors and Angel Investment Networks take a personal interest in you and help you with several other things than only financial aspects!