By the time Goyal left Accel, he was hooked to the venture world, though in a different avatar of an angel investor. In 2011, a year after he quit Accel and turned entrepreneur by starting an online fashion and beauty venture UrbanTouch, Goyal made his first angel investment in Delhivery, a logistics startup. The trigger to invest was simple: The nascent startup had ticked both the boxes that mattered to Goyal: Pedigree of the founders and the blue ocean (new market) into which they had plunged.
Goyal liked Sahil Barua, one of the co-founders. “Sahil had a good gravity in his character,” he recalls. The startup, he lets on, was working in the ecommerce logistics space, and Goyal—already running a vertical ecommerce startup—sensed Delhivery might be the next big thing. “That made me invest,” he says, declining to share the amount invested.
By the end of 2020, Goyal ended up investing in 28 startups as an angel. Since 2011, he has invested in over 100, with the ticket sizes between ₹5 lakh and ₹20 lakh. The journey has been financially and emotionally rewarding. “Angel investing comes with a satisfaction of helping smart founders in their early days,” he says.
For Sharma, the trigger to invest is simple: Help startups raise the precious early dollar. His involvement, though, doesn’t end with a fat cheque. “I contribute through brainstorming, and connect them with my network,” he says. The intention of the entrepreneur is clear: To get a bang for his buck. “If angels do not make money, they will not be able to invest further,” he says.
“Founders-turned-investors understand the pain areas of startups,” says Vikram Gupta, founder and managing partner of IvyCap Ventures, a homegrown VC firm making early bets in startups. The founders, Gupta explains, have gone through similar challenges while starting up their own businesses. Entrepreneurs with prior knowledge and expertise about the nuances of business operations not only provide the financial support but also the necessary knowledge, contacts and entrepreneurial promptness to undertake decisions intuitively. “This adds credibility to the ventures,” he says, adding that an entrepreneur-angel is likely to bring more experience on board. There is another positive. Such angels come up with new ideas and accelerate innovation in the startup ecosystem.
A decade back, the trend largely emerged out of the need to invest in the startups of fellow alumni or within one’s network. An IITian would end up investing in a startup started by an alumnus. The same was the case with IIM alumni. It was a mom-and-pop industry, where an angel was more of a Santa. Cheques were cut, and no return was expected. Gradually, angel investing got structured, and institutional bodies jumped into the fray. “When IvyCap Ventures started this trend years ago, there was hardly any other investment company doing the same,” claims Gupta, who started the fund in 2011. Looking at the success of this model, he adds, other investors jumped on the bandwagon.
For Sharma of Livspace, there is only one criterion to invest: Connect with the founders. When Sharma met the founders of PharmEasy to understand the scalability of their ecommerce model, he ended up investing twice in the venture. Later he wrote the first cheque for Toothsi, a dental tech startup, and a company started by the wife of one of the PharmEasy founders. Sharma then again invested in HobSpace, an edtech startup, of the wife of another founder of PharmEasy. There are more connections-based investments. One of Edureka’s founders was Sharma’s flatmate years ago. After they met again at a party in 2015, Sharma ended up investing in his business. A founder of Zolostays was Sharma’s classmate from ISB. “I ended up investing here, and again in a Series C round,” he says.
Turning angel might be easy, but staying one may be another ball game.
First Published: Jan 20, 2021, 11:29
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