Note: The views & opinions expressed in these essays are strictly my own, and not those of any entity I may be associated with as an employee, consultant, promoter, investor, etc.

ARCHIVES

Pune

› Technology Venture Investors in Pune

Technology Entrepreneurship in India - Teams

› Entrepreneurial traits

› Picking cofounders

Technology Entrepreneurship in India - Generating Revenue

› Is your business model well-defined?

› Your industry's value chain

› What is your value proposition?

› Which distribution channels will you use?

› Who will drive business development?

Technology Entrepreneurship in India - Raising Capital

› Venture capital & venture capitalists (VCs)

› Corporate venture capital

› Angels & angel networks in India

› Government support for Indian startups

› Proof-of-concept funding

› Do you need a business plan?

› How much money should you raise?

› Startup valuation

› Pitching to investors

› Figure out the term sheet

› Negotiating with investors

› Due diligence - A necessary evil

› Time to sign the investment agreements

Equities, ETFs, F&O

› Oct 2011: Equity Risk Premium for India

› Jun 2011: Investing in Indian equities

Technology Enterprises in India

› Nov 2010: Technology investment in India - WATER

› Aug 2010: Technology enterprises in India - 3 avatars

Risk Capital for MSMEs

› Mar 2010: Risk mitigation for investors in MSMEs

› Mar 2010: Why don't (Indian) MSMEs get risk capital?

› Feb 2010: Angel investing - Will it work for Indian MSMEs?

› Feb 2010: What's so special about innovative MSMEs?

› Feb 2010: Where do Indian/NRI (V)HNIs invest?

› Feb 2010: Funding options for innovative MSMEs in India

› Jan 2010: Innovative MSMEs in India

Angels are high net-worth individuals (HNIs) who invest risk capital in (technology) startups. Angel networks are associations of angels that - as a group - solicit deal flow, evaluate companies, and invest in them.

In India, angels have been around for ages in the form of wealthy professionals or businessmen. However, most of them think of their investment as (unsecured) debt with limited downside. This conflicts with the equity model of venture funding, where the entire investment may be lost. Moreover, such investors lack the domain expertise and networks that their investee companies need.

Since 2006, we have seen creation of US-style formal angel networks, e.g.: Indian Angel Network, Mumbai Angels, Hyderabad Angels, Chennai Angels, Bangalore Angels, Kutchi Angel Network, Pune Angels, YourNest Angel Fund, etc. Together, these networks fund 50 - 100 startups each year in India. More importantly, they bring industry/technology expertise, high-level networks, follow-on funding, etc.

Recently, several match-making websites for angels & entrepreneurs have been launched, e.g. : Venture Giant, Investment Network, India Venture Board, etc.

Unlike the US/UK, where the government incentivizes angels via tax credits, the GoI has (recently) burdened angel investing. Angels are required to explain the source of their funds, while startups are required to treat angel investment as income. While this is likely to be amended in view of protests from the angel networks, the government's attempts to curb black money will drag down angel investing.

Perspectives

• The Startup Tax - Budget 2012 provisions on angel investing in India

• Scaling up angel investing, Silicon Valley style - and some concerns.

• Angel investing revealed: Ron Conway & Mike Maples