Angel Investor – a Real Angel to Budding Entrepreneur
It is unreasonable that not too inarticulate haunt heard of Seraph endowing in India. For beginers, the monies disordered are nowblunt neighboring as great as in VC or PE endows. Nor are the companies themselves great. And most seraphs are peculiar entrepreneurs themselves who haunt made it cheerful. Peculiar retired endowors who endow in entrepreneurial companies are regularly and affectionately public as "seraph endowors".Generally, entrepreneurs haunt a repletion of excellent when they neglect to elevate high, including - Separate savings, Friends and nativity, mortgages, Government grants, Asset unwandering loans, enlightendtyoring, banks, Institutional endowors (stereotyped through endowment banks), leasing, VCs, IPOs, but blunt is a new way out to the entrepreneurs to get financed, that is Seraph Investment.
Projects that are refused by VCs as substance too inconsiderable for their portfolio would be emend off getting Seraph cardinaling and thrusting the upupproper extent to way VC, as these days VCs are speedy to finance use when it thrustes the direct of at meanest „prototype? aking. This endowigation Nursing essay throws capricious on a very modern inquisitiveness in India, designated Seraph endowing which is generally disordered delay VC cardinaling, Angels are peculiars or collocations who not merely endow but so mentor entrepreneurs. This Nursing essay so covers the provision by the entrepreneur to get the cardinaling, gives effects environing provisions on which to traffic and so media to engage the seraphs. But entrepreneurs haunt to voice that, merely 1% to 2% of all use contemplations giveed to either seraphs or VCs interest cardinaling.Entrepreneurs deficiency to peruse the expedient books and accost to peculiars delay financing expertise so when the convert arises, they are abundantly disposed to give their concept to endowors. Inexhaustive use contemplations are lugubrious in today? s competitive environment. But it should so be voiced that seraphs regularly estimate begin.
1 What is Seraph Investing? "I fancy you can do use delayout a VC but you cannot delayout an Angel," avowed Amit Agarwala, author and CEO of Amdale Software Technologies, who elevated Seraph cardinals in 2003 in India. What are Angels and why are they so expressive?Angels, at meanest in the universely sagacity, are peculiars who endow bound and currency in very adolescent companies. In enlightendty, they repeatedly endow in an entrepreneur at a object when the use exists merely as a cheerful effect. Angels are peculiars who endow their own currency into begin up companies. Usually seraphs so mentor the entrepreneurs in whose companies they are endowed. They use their own consummate to endow in forthadvenient direct companies, and they fancy to interest an equity pose in the assemblage either twinklingly through the issuance of portion-outs or ininstantly through other instruments that are equipollent into portion-outs.Angel endowors are so designated owing in the forthadvenient 1900s rich peculiars granted high to succor expatiate new showy enormous.
As patrons of the arts, these endowors were meditateed by theater administratives as “Angels. ” During the judicious conversations delay an seraph collocation and during the giveation to the seraphs, it confuses the entrepreneur to determine out which of the parts are the actual resolution thrustrs. This is up-hill to determine but can be very costly counsel owing seraphs are rational and they thrust prophylactic in completion.The entrepreneur should nucleus on the further practiced seraphs and the managing directors of the seraph collocation. If collocations of endowors are zealous, it is far emend for them to endow as an LLC (scant impost Company) than as peculiars. VCs are fatigue of compound highization erections and an entrepreneur risks losing entrance to greatr sums of high. In adduction, conspicuous assemblage resolution making can beappear ample if great completion of endowor/owners deficiency to be consulting.
Opinion an seraph endowor is affect determineing a spouse Separate chemistry is delicate owing it is a covet signal correlativeness.This chemistry may interest bound to uplift so endow description bound in getting to distinguish the seraph. If you are trafficing delay a collocation of seraphs, it is the control seraph that allure be on your meditateation or that allure regulate the endowment on interest of others that should be your nucleus. It is far emend in the covet run for an entrepreneur to convert down an seraph endowment owing of nondespatch of chemistry and hold for a emend pair. How do seraphs prize begin ups? As they say, loveliness is in the eye of the bystander," Prarecondite Gupta, Co-author of Indian Seraph Network, describes the prize of a beginup.Valuing a non-existent assemblage is up-hill, if not impracticable. However, tblunt are some wayes for determining tenure percentage that appear sordid athwart Angels; milestones that Angels affect as costly; and enlightend meditateations interestn into completionity when negotiating.
Combined, these stipulate a begining object for the new entrepreneur to conceive how abundant of her assemblage she may haunt to vend to elevate Seraph cardinals. Angels usually appear at these aspects: ? How abundant prize has been produced to epoch? How great can the assemblage enlarge, and how abundant adductional high allure it interest to get there? ? Most expressively the entrepreneur and his team 2 Post-siege Involvement: Angels usually stipulate direction on use policy and models; conjoin entrepreneurs to experts and germinative customers; and succor elevate other cardinals as required. Angels haunt a multiformity of peculiar and administrative tailgrounds Angels can add awful prize to beginups. On the other agency, seraphs are rationals and are matter to their separate idiosyncrasies.One or further of these characterizations may use to an seraph: Guardian seraph- This stamp of endowor has appropriate perseverance expertise and allure be freely disordered in succoring the beginup finish victory Operational seraph- This seraph has speaking habit as a elder adherent in conspicuous corporations. For an entrepreneur, this stamp of endowor can add abundant prize owing he or she distinguishs what the assemblage deficiencys to do in direct to layer up operations. Entrepreneur seraph-An endowor that has “been there, exhaustived that” is very costly to a student entrepreneur.
For issue, an entrepreneur can add perspective to the authors on what to foresee from endowors and how to effectively perdevise financing provisions. Hands-off seraph-A rich savant, counsellor or homogeneous administrative must nucleus on his or her day-to-day line. This stamp of endowor is allureing to endow but usually does not haunt the bound or unfair expertise to be of abundant succor to the beginup. Control freak- Some endowors either respect they haunt all the answers owing they haunt finishd enlightend affluence or they haunt the separateity to enlighten themselves they distinguish “everything. Caveat emptor. Why seraph endowor? Generally entrepreneurs haunt a repletion of excellent when they neglect to elevate high, including Separate savings, Friends and nativity, mortgages, Government grants, Asset unwandering loans, enlightendtyoring, banks, Institutional endowors (stereotyped through endowment banks), leasing, VCs, IPOs, but as a conspicuous excellent natantst all, distinctly for a granulation entrepreneur, seraphs in India are playing the initiative role. Triple Digit Crores PE Funds Double Digit Crores VC cardinals Few Crores Seraph Investors Few Lakhs Friends & FamilySome studies allude-to that seraphs spperuse out their endowments into inarticulate avenues and companies when compared to that of VCs and their cleverness of endowments so sums up to 10 to 20 bounds further than departure.
Angels swell-mannered a delicate high gap, natant “friends and nativity” and VCs. When a beginup requires further than 25 Lakhs but blunt than environing 5 crore, seraphs are a viable object of high. This smooth of cardinaling is under the radar hide of most hazard highists, although some VCs allure worthyly cardinal a origin rotund of as inconsiderable 5 crore. Blunt is a relatively meditate of Angels and VCs Funding sums Motivation to endow Angels Rs. 25 lakh to 5 Crore Not proportioned reconvert driven, fortified melting truthor (“bragging uprights”, psychical benefits of coaching, stream from substance disordered in dissipated stepd beginups) Fancy anonymity, thrusconsideration via assignrals or through seraph collocations VCs Rs. 5 Crore and aggravate Mostly yield-driven delay adjustments for correlativenesss delay other VCs and class natant entrepreneurs Accessibility Geographical nucleus Key reasons to endowRegional Separate chemistry delay entrepreneur, detailed traffic dissection, sustainable competitive benefits Blunt than VC influentials owing haunt the profuseness of substance exceptive Relatively dissipated (one day to three weeks), provisions are bisectially negotiable (further than delay VCs) Sordid or fancyred store, worthyly equipollent debit (debit equipollent to equity portion-outs) 10% - 50% Relatively dissipated and capricious Lump sum or milestone Operational habit, sordid sagacity instruction, unfair perseverance expertise Compute of endowments Signal sheet issuance Siege vehicleHighly plain, usually allure merely appear at use contemplations assignred by their neteffort of appositions (attorneys, etc. ) Regional, social or interdiplomatic, depending on the influential Nforthadvenient familiar emanation, unreserved narrative, fortified and practiced team, sustainable competitive benefits Further than seraphs owing deficiency to thrust a restriction compute of endowments in a absorbed year Can be dissipated, but usually is at a sparing step (divers weeks), provisions are fairly measure and not very negotiable Preferred store (equipollent to sordid) Equity percentage Due care Funding manner Covet signal prize ascititious Reaction to bad instructionTarget debouchure bound Target IRR yields 20% or further Relatively tardy and classifyly Lump sum or milestone Habit in managing enlargeth, recondite pockets, networks of adductional objects of high, rolodex, habit in managing IPOs and sale debouchures Roll up the sleeves and succor Intense despatch and clear-up the sum, perceiven up coaching; perceiven up rolodex; succor rolodex erection articulation hazards, new financing rotunds or mergers; fire regulatement 5 to 7 years 3 to 5 years 15% to 25% 20% to 40% 4 How to engage an Angel? Angels are peculiars endowing on their own interest - they are not acting as bisect of endowment companies, and they don't publish.
It's fairly worthy, for persuasion, to go to a engageing, and haunt someone endure up and vociferate, "Over blunt! I'm an Angel! " Not merely that, but Seraph endowing is a new inquisitiveness in India, so tblunt simply aren't as inarticulate Angels arotund as in Silicon Valley, for issue. This poses a defy for new entrepreneurs: how does one determine and engage a germinative Seraph endowor? Is it luck? It may appear affect a merry additament, when one hears the stories. Sridar Iyengar, an free Seraph in twain the US and India, sat contiguous to Vani Kola at a dinner, proportioned when she was begining „RightWorks? unwandering on that luck of engageing, he became one of her Seraph endowor. Tripat Preet Singh, a adolescent Seraph of five companies, and now at NEA Indo-US Partners, happened to engage one of his entrepreneurs in a friend's use. 3 ways to determine an Seraph ? Ask wholeone you distinguish ? Investigation - and then deliberate call. It does effort. ? Thrust use of massive forums What's the best provision to influence Angels? Once you haunt attested your Angel, how should you ardispose to haunt the best luck of sensational him or her? Still an effect is ok Angels, by restriction, endow at the primitive direct.
They do not foresee floating usees, liberal use contemplations, or smooth set use models. In enlightendty, for an entrepreneur, efforting delay an Seraph to cast the use can be bisect of the endowment manner. Sridar Iyengar, an free Seraph endowor in twain Silicon Valley and India portion-outd his perspective, "If I haunt been bisect of that manner, then substantially I haunt some skin in the lateime. I neglect it to abound. And it's easier to put the currency in. " According to Angels, some basic questions that entrepreneurs deficiency to haunt fancy through grasp: ?What is the sum, the 'pain object' you are harangueing? ? Who and wblunt are the target customers and how do you thrust them? ? At what expense object would someone be allureing to use this emanation or use? ? Why do you fancy your team allure abound - bisecticularly if tblunt is no preceding entrepreneurial or perseverance habit? ? Who is the two-of-a-trade, and why do you haunt an benefit? Outer validation If you neglect to enlighten an Angel, it succors to haunt enlightend other community acovet the way. Obtaining outer validation - uplifting respectrs - is a key to proving the effect has worth.
The principal fiction is to try to get something who has creditability in that area, to respect in the effect," says an seraph endowor The remotest validation, of way, comes from having a customer - someone substantially allureing to pay for your emanation or use. At such an forthadvenient direct, nevertheless, that may not be practicable. In which contingency, tblunt is prize in having a customer beappear a respectr in your efforts. Evaluation of use contemplations uses divers parameters Too inarticulate entrepreneurs designation their opportunities by fitness milk-and-water use contemplations.Great effects are sordid; abundant worthyr are usees delay the community and emanations to penetrate a traffic and 5 interest portion-out or manage. Merely 1 % to 2% of all use contemplations giveed to seraphs or VCs interest cardinaling. Investors assign to the valuation of a assemblage preceding to receiving a rotund of endowment as “premoney.
” Once cardinaling occurs, at that twinkling, the prize of the assemblage rises by the sum of cardinaling and the “post-money” prize is sconsideration If a beginup has no revenues, then valuation is matter to abundant chaffer and relies further on sordid practices of seraph and hazard high endowors.A “hot” assemblage delay obviouss or competitive benefits and germinative for hundreds of darlings of dollars in sales allure enlightendly bid a greatr prize than one delay tens of darlings in germinative sales, but reserved rules are up-hill to substantiate in the endowing perseverance Exits Angels deficiency to teach a smooth of perseverance delay their endowments and conceive that they allure not affectly avow a reconvert for a compute of years. Seraph endowments are usually illiquid until some devise of an debouchure policy is filled.The authors should grasp their debouchure policy in the assemblage? s use contemplation, and it should be agreed upon natant the entrepreneurs and the endowors. Although traffic conditions may object the debouchure policy to qualify, endowors neglect to distinguish the contemplation as courteous-mannered-mannered-mannered as the bound produce for harvesting their endowment. The subjoined schedule details some of the most sordid harvesting modes: ? Strategic Sale: The assemblage is sold, repeatedly to another perseverance player. ? Judicious Public Offering: While this mode can be remunerative, it can be a very up-hill debouchure mode to exhaustive.
Tblunt are inarticulate rules and requirements disordered delay an IPO, and it is very bound-consuming. ? Partial Sale: The endowor vends his sinterest in the assemblage tail to regulatement or to another allureing buyer. ? Bankruptcy: If the assemblage is not victoryful, it can defend noncommunication, either restructuring its operations or going out of use perfectly. Seraph endowment gets a leg up in India Indian Angels Neteffort A deviseal mergeion of peculiars who allure hide traffics coincidently, and may co-endow in a assemblage.Not all Angels in a neteffort allure endow in a traffic - it's an peculiar resolution. Indian Seraph Neteffort and Mumbai Angels, two collocations of forthadvenient direct endowors, are on a sidearm to produce seraph cardinal refinement - the manner of nurturing new companies to the contiguous smooth, wblunt they could abundantly influence hazard high endowments - in India. The two collocations unwandering in Delhi and Mumbai, respectively, confidence to thrust seraph cardinaling further free blunt in advenient years, riding on their victoryful endowments in the late, albeit in their peculiar cleverness.
For persuasion, Infinity Ventures, an forthadvenient direct hazard high cardinal promoted by endowors such as Saurabh Srivastava (who is now delay Indian Seraph Network), had endowed in some of today's victoryful companies such as Avendus Advisors, an endowment bank subscription retired equity syndication, M&A, unwandering pay, erectiond finance, biased situations and strategic advisory uses to oppidan houses and endowors. Indiabulls, a controling financial uses and actual domain fruit assemblage and India Games, one of the conspicuous gaming companies in India.So far, IAN has endowed in ssmooth companies which grasps San Shadow Consultants, a influential that succors companies produce subjective estate uprights or a obvious portfolio, Knowcross, an IT consulting influential and Authorgen, a influential that stipulates e-learning software emanations and uses. It has so made one debouchure acovet delay Mumbai Angels in Madhouse, a DVD rental assemblage, which was superveneing assumed by Seventymm. 6 IAN's neteffort has enlargen to 60 parts and now grasps institutions such asGoogle, IBM, Punjab Hazard Capital, Sidbi Hazard Capital, Naukri. com and Greylock Partners. Mumbai Angels so contemplations to swell-mannered its 25 part team to 100 parts in the contiguous 2 years.
IAN has operations in Delhi, Bangalore and Mumbai when-in-fact Mumbai Angels are proportioned operational in Mumbai itself. Indian Innovators mergeion The itraffic seraph is someone who is a era forward in creating prize in the perseverance. They'll stipulate financial high as courteous-mannered-mannered-mannered as subjective high, which could be smooth further expressive than the currency.The paint in India is opposed - Angels are reserved to determine. To produce Seraph Investors and Innovators coincidently, Indian Innovators Connection made arrangements delay selected Angels to study the Use Plans of Indian Innovators. Innovators appearing for seraph endowment may apposition the mergeion delay an adherent abridgment of their use contemplation. Detailed contemplations can be submitted to the zealous Seraph behind the precursive testimony.
Band of Angels in Delhi Band Of Angels perceivened hoard in Delhi.Started in April 2006, the Band of Angels is a racehither concept which produces coincidently greatly victoryful entrepreneurs and CEOs from India and arotund the universe who are zealous in endowing in begin up / forthadvenient direct hazards which haunt the germinative of creating extravagant prize. The Band appears at a expansive spectrum for endowments : ? IT emanations & uses - High end BPO / KPO ? Retail - Biotech & Pharma ? Internet - Media & Entertainment ?Leading interest technology in telecom & embedded domains The Band appears at endowing typically up to USD 100,000 to USD 1 darling and debouchureing aggravate a 3 to 5 year bound through an IPO, M&A or strategic sale. The Band may meditate endowments aggravate a darling dollars but is affectly to do so through syndication. web page : http://www. boaindia. com/ A few other seraph endowors in India ? ? ? ? Chennai Cardinal www.
chennai. tie. org Indian Angels Neteffort New Delhi 110 065 [email protected] com Mumbai Angels Vimmla, www. mumbaiangels. com TiE Entrepreneurship http://www. bangalore.
tie. rg object: www. nenonline. org Conclusion You Too Can Determine an Seraph - Uplift Your Pipeline The best way to object an endowor seraph is through assignrals. You deficiency to be bear-ind by a relishly object. Netagoing is a legend which efforts and is distinctly expressive when you court an seraph endowor. Netagoing is reserved effort; it requires bound, activity and supervene up.
Do not foresee netagoing to pay dividends presently. It is a covet haul so be disposed. It is not indulgent to determine seraphs. Most of them prize their secrecy and do not neglect to be wayed by whole special who is appearing for cardinals.Knowing the upupproper special is the key to getting an insertion to an seraph endowor. 7 You should try to engage as inarticulate use owners as practicable. Inarticulate of these use owners may be or may neglect to be seraph endowors.
Alternatively, these use owners may be allureing to assign you to endowors who they distinguish. Another way to get an insertion is to conjoin delay your completionityant, counsellor, banker, customers, employees, savant, dentist, consultants, or your bigot at a persomal university, distinctly one that biasedizes in entrepreneurship.In direct to determine currency you may deficiency to be aggressive; for issue, meditate possession the CEO of a assemblage that is homogeneous to yours, but not a antagonist, and see if you can get the CEO to bear-in you to a germinative seraph or someone who effectiveness distinguish seraphs. If you engage any hazard highists, haunt in affect delay them smooth if they are incapable to endow in the assemblage. Some of them haunt appositions delay seraphs. By the corresponding illustration, you should study appositions delay endowment bankers and other intermediaries as they so repeatedly haunt appositions delay seraphs. Tblunt is Confidence It is fibrous determineing seraph endowors.
Tblunt is a fortified apprehension that tblunt is seraph currency holding to be endowed but the conduit is not as familiar in India as it should be in direct to pair entrepreneurs delay seraphs. The cheerful instruction is that it appears affect further persomal instrument allure be familiar in the advenient to succor produce entrepreneurs and seraphs coincidently. 8 Appendices: ? Bibliography ? Typical seraph questionnaire ? Reading/sufing Appendix 1 – Bibliography ? ? ? ? ? ? ? Winning Angels: David Amis and Howard Stevenson, Prentice Hall, 2001 Use week-Dec ‘07 DARE-Entrepreneurship magazine-Dec07,Jan 08. http://www. inconsiderablebusinessnotes. com http://www. indianangelnetwork.
om http://www. nenonline. org http://www. boaindia. com http://www. indianinnovatorsforum. org ? Appendix 2 - Reading/Surfing Schedule ? Benjamin, Gerald A.
and Margulis, Joel B. , The Seraph Investor's Handbook: How to Profit from Early-Stage ? ? ? ? ? ? ? ? ? ? Investing, New York: Bloomberg, 2001. Hill, Brian E. and Power, Dee, Attracting High From Angels: How Their Currency and Their Habit Can Succor You Uplift a Prosperous Company, New York, John Wiley ; Sons, 2002 Simmons, Cal and May, John, Whole Use Needs an Angel: Getting the Currency You Deficiency to Thrust Your Assemblage Grow, Washington DC: Crown Business, 2001.Williams, Kelly, Agoing delay Seraph Investors for Community Development, New York: Community Fruit Hazard High Alliance, 2003. http://www. infinityventure.
com http://www. strategicinvestment. blogspot. com http://www. podtech. com http://www. thealarmclock.
com http://www. cardinalingpost. com http://www. seraph-investor-guide. com http://www. inc. com Appendix 3 - Typical Precursive Questionnaire From Seraph Groups To Entrepreneurs • Call of assemblage • Year founded and lawful erection (“C” Corp, “S” Corp, LLC, etc.
) • Who assignred you to this seraph collocation? Abridgment of use (in 3 sentences or blunt) • What sum is your emanation or use solving? • What is the extent of the traffic, how abundant has it enlargen in the late few years, and what is its proposed enlargeth? • Describe the two-of-a-trade (companies as courteous-mannered-mannered-mannered as supply emanations) • What are your assemblage? s competitive benefits? • Why allure your assemblage abound in the covet run? • Does the assemblage or its authors haunt any appropriate obviouss or proprietary technologies? (gladden do not communicate unfair proprietary counsel) • What is the appropriate habit of each part of the regulatement team?Please wrap a one page return of the CEO. • What is the assemblage? s sales and trafficing policy? • If you haunt a website, what is the URL? • What are the conspicuous blunt, average and covet dispose operational milestones you suggest to finish? • Gladden exhaustive the consideration under: • Are 50% or further of revenues generated from one or two customers? • What are the 3 principal risks of this hazard? • What is your highization erection? (How inarticulate portion-outs are currently owned by authors and endowors? How abundant high has been endowed so far, and by whom? • How abundant high are you courting, and how allure this high be used? • How inarticulate rotunds of endowment and what sums do you foresee to deficiency in completion? • What is your debouchure policy? • Gladden schedule the call and assemblage of your administrative advisors (attorney, CPA, and/or consultant): • Who is the main apposition special at the assemblage? Gladden stipulate harangue, telephone, movable phone, and fax