Funding is essential when you start a new small business, and sometimes, it can feel like you need a miracle to help your business survive. That’s where angel investors come in. Named after the mythical creatures who often watch over and protect people, angel investors put money into startups in exchange for a small stake in the company. Hence, start-ups put in a lot of effort to attract angel investors to fund their business ideas. Although, start-ups must see if angel investors are the right option for them to raise funds as in some cases their experience might not be not in line with the business idea.
To support the growing number of startups in the country, there are a number of angel investors and platforms that are a part of Angel Investors India Network.
The Indian Angel Network
The Indian Angel Network (IAN) is a group of individual angel investors. Monthly, they review applications from about 300 to 400 startups and choose to fund about 7% to 10% of them. Ultimately, the organization wants to fund another 500 startups over the next decade, and it plans to invest about INR 5,000 crore in those companies. The network offers up to INR 6 crores per business, and the capital comes from a pool of funds donated by its members.
Typically, the organization reviews startups in two ways. Individual members can meet with entrepreneurs or even help aspiring entrepreneurs get their businesses off the ground. Then, at the network’s monthly forum, these members present their recommendation to the group, and as a whole, they decide if they want to invest. If you aren’t sponsored by a member, you can approach the group directly during an elevator pitch session. That gives you a chance to explain your business concept to the whole network at once.
As the second largest group of angel investors India network after IAN, Mumbai Angels primarily focuses on startups in the southern part of the country, and as of June 2018, the organization has funded about 100 companies. One of the network’s first significant investments was in InMobi. Then, as the idea gained steam, the organization developed a platform to connect even more entrepreneurs and investors. Generally, the Mumbai Angels focuses on startups or early-stage companies. If your business is already well-established, you may need to explore other funding opportunities.
To apply, you simply submit your plan through the company’s website. Then, if you get through the pre-screening process, you get the chance to make a formal presentation that includes both oral and written components. The oral presentation takes about 20 minutes, followed by 15 minutes where the investors ask you questions. The best part is that you don’t have to wait long; the group responds to applicants within seven to 10 days.
Founded in 2013, the Let’s Venture platform helps connect startups and investors. It has a presence in India as well as Singapore, and it boasts a membership of over 2,500 angel investors and venture capitalists. To get started, you need to sign up, fill out your profile, and apply to be connected to an investor. If your profile piques the interest of Let’s Venture’s internal team, you may get highlighted on the curated portion of the site, which makes your pitch visible to even more investors. On this platform, investors act as individuals rather than as a network. As a result, you may be able to establish relationships with multiple angels.
If you need capital, angel investors are a great place to start your search. Unlike bank loans, you don’t have to pay these investors back. Instead, they own a small stake in your company. You also get a lot of flexibility. You can apply through a network or reach out to an individual angel investor on your own. But to make the most effective pitch, you need financial reports and projections, and that’s where cloud-based accounting software such as QuickBooks can help.