The Indian Angel Network (IAN) is Asia’s largest angel network with over 325 angel investors from 10 countries, and with over 100 portfolio companies spread out over seven countries. IAN is built “By Entrepreneurs, For Entrepreneurs”, facilitated by bringing together successful Indian entrepreneurs and dynamic CEOs who are keen to provide critical funding and mentoring in order to assist in the creation of valuable companies making a worthwhile footprint. KITE Invest spoke with the President of IAN, Padmaja Ruparel about IAN’s unique model and how it brings in “Money, Mentoring and Market Access”to portfolio companies.
KITE Invest: What does IAN do to encourage the transparency and development of Angel networks, incubators and crowdsourcing?
Padmaja Ruparel: As IAN was the first angel group in India transparency has always had to be a fundamental part of our work. It is due to the very fact that we were the first group, and helped other angel groups to start in India, IAN has been led the development of the angel investing industry, and. We have also been a key player in lobbying and working with the Indian government and policy makers for the entire angel community investing industry.
Secondly, having IAN helped in the founding of the Lanka Angel Network in Sri Lanka, actively helping the growth of angel groups in the region. We strongly believe that the more investors that come into play, good entrepreneurs will take the risk to go entrepreneurial and raise money.
In terms of incubators, IAN has had a seminal role to play – but what we have done is set up India’s first virtual incubator. This has brought the best and top industry leaders to mentor young startups in different sectors, looking at innovation and challenging their minds. For the startups this is invaluable high quality mentoring access.
Crowdsourcing in India is not as well established yet. There are crowdsourcing platforms, like Let’s Venture and they provide entrepreneurs ability to raise monies, but it does not provide enough mentoring support. In my mind investment is like a marriage; they are both journeys that are challenging and needs the support of deep relationships.. In India we find that entrepreneurs do need help.
KITE: In terms connecting Angels and entrepreneurs / startups what would you say are still of the biggest disconnects between the two? Any specific points specifically related to India?
PR: There are three aspects to this question. One, angel investing in this country is very young. Most angels in India have completed just one cycle of entrepreneurship, and when you have completed just one cycle you have not completely crossed over from entrepreneur to angel, and this must be kept in mind when looking at India’s angel community.
The second aspect is that entrepreneurship used to be at the bottom of the pile in terms of career choice. It has come up to be the first choice of career and that is a big step. Now as investors we see that there is a level of romanticism about doing a startup, but the challenges and disconnects we face are our expectations and the reality of the quality of the investment opportunities.
The third is a concept I learned from the Israel angel community and that is the fact that entrepreneurs should be unemotional about their ventures – providing a good objective view of their company and its strategy. A venture should be created with a good exit strategy, but in India we are much more emotional about our ventures. This emotional aspect sometimes leads to a subjectivity that does not lead to very good decisions for the company.
KITE: Can you highlight any specific regions within India you may think are poised for rapid growth?
PR: Bangalore is the IT startup hub; it is extremely active and provides a different ambience than other Indian cities. Other cities like Delhi, Bombay, and Chennai are not far behind and are coming up very quickly.
We are also seeing how entrepreneurship has spread throughout the country and are now seeing startups coming out of second-tier cities with interests around the specific needs of their region or city. These entrepreneurs are presenting ventures that are built for financial returns, but also have impact on society.
KITE: In addition to the vast network that IAN works with in India, IAN has also mentored and nurtured startups around the world including the UK, US, Canada, France, Hong Kong and Sri Lanka. In February 2014 it was announced that IAN was to make its first investment in a UK startup. Investing outside of one’s country and region is very unique for an Angel Network; can you please comment on IAN’s motives for seeking investments outside of India?
PR: This is indeed very unique to IAN. Most angel groups around the world are local and city-based in focus. Whereas, what IAN has been able to do is semi-corporatize the angel model, by creating an equal opportunity platform, which allows investors from all ten countries to invest at the same level, rights and terms. It is because of this transparency and strictgovernance model that has allowed us to scale across cities, as well as countries. And more importantly, it has been able to leverage the global network for the portfolio companies and in turn returns for investors.
Regarding investments abroad, IAN’s global model of funding and helping young companies is well endorsed by its investment in a London based company, Lowdownapp Ltd. Along with funding, IAN is helping the founding team to strategise a fast growing global business as well as activating IAN’s huge rolodesk to bring customers / partners on the table. Briefly, Lowdownapp Ltd, a startup mobile first software development company, founded in July 2013 by information technology consultants and mobile experts and based in London.
KITE: Have you seen that since IAN spreads out across ten countries and invests around the world that the work of IAN has attracted international investors to India?
PR: Yes. We are flooded by reach-outs from governments and fund managers from all over, including Singapore, Israel, Italy, Malaysia, Canada, the US, and many more.
KITE: Where single piece of advice would you give to a person interested in Angel investing in India?
PR: Angel investing is at the highest risk asset class in an investor’s portfolio; therefore, the risk mitigation strategy has to be well crafted and leveraged to the best possible level. In this regard, I would advise anyone interested in Angel investing that they should invest through an Angel Group, because it provides a much chance of return on their investment, and hopefully with a high rate of return
Investing with an angel group, allows the angel to:
- One, invest small amounts in a number of companies, so the money has been well diversified.
- Two, by investing in an angel investor group you are able to leverage the domain level expertise of your peer investors, and therefore, able to spread you investments across different sectors and geographies.
- Lastly, the power and strength of the group and the togetherness is invaluable for the investee companies.