SlideShare ist ein Scribd-Unternehmen logo
1 von 53
© Copyright LetsVenture.com | All rights reserved
Shanti Mohan
Founder & CEO
shanti@letsventure.com
Twitter Handle
@letsventurein
© Copyright LetsVenture.com | All rights reserved
Agenda  State of the Angel Investment in India
 Angel Investments 101
 What is Angel Investment? Why should you do it?
 How do you make a return?
 How do you evaluate a startup?
 Deal Dynamics
 Valuation
 Process
 Primer on Term Sheets / SHA
 How do you get started?
 Syndicates on LV
 Pitches with analysis
© Copyright LetsVenture.com | All rights reserved
State of seed/Angel
Investments
 2012 Deals and Roughly between 120-150 deals
 Networks (IAN, Mumbai Angels, Hyderabad Angels,
Bangalore Angels) etc contributing to guess estimate of
30-35% of the deals
 Median investment value for Seed/Angel investment: 1.5
CR
 Roughly 50 deals between Dec-Mar 13
 Rise of the institutional first cheque (Blume, Kae,
firstcheque, Harvard, 500startups etc)
 Start of incubators
© Copyright LetsVenture.com | All rights reserved
State of seed/Angel
Investments
 2013
• Slight slow down (Impact of Section 56 ?)
• New players (including incubators) starting to deploy
funds
• RISE of the incubation model (today approx 50+
incubators)
• Accelerators working on batches 2 & 3
• HOT sectors (not including consolidation): Healthcare,
Education
• LetsVenture Founded in Sept 2013
© Copyright LetsVenture.com | All rights reserved
State of seed/Angel
Investments
 2014
• India story becomes strong
• 31 global funds enter the India market
• VC’s actively playing in early stage (IDG, Sequoia, Accel,
SAIF)
• LetsVenture completes 23 deal in end of first year, with
6.5m being committed online
© Copyright LetsVenture.com | All rights reserved
SEED-STAGE FUNDING IN INDIA
FY10 – FY15
• Enter key takeaway of
this slide
© Copyright LetsVenture.com | All rights reserved
What we learnt in the last
1.5 years (2014/15)
• New persona of angel investors have emerged
• Entrepreneur turned investors
• Second generation family business owners
• Global Indian
• Corporate MNC
• Online investing is on the rise (LV is India’s largest platform
for startup funding)
• Early Stage investing will include Tier 2 cities, angel groups,
micro funds and early stage VC’s
© Copyright LetsVenture.com | All rights reserved
Do you want to be part of the
new investing wave?
© Copyright LetsVenture.com | All rights reserved
Why Angel Invest?
 Support Entrepreneurship
 Leverage your knowledge and connections
 Develop an alternate asset class
 Make Money
© Copyright LetsVenture.com | All rights reserved
Who is an Angel Investor?
 Strong Passion for entrepreneurship
 It is nearly a pseudo entrepreneurship
 Bring value to the startups
 Anyone with Surplus capital which can be invested
© Copyright LetsVenture.com | All rights reserved
What returns can you expect?
 2/3 of startups fail world wide
 75% of the angel investments do not make returns
 Very high risk / High Return Game
India, still a young eco-system. Not many data points…
 Some reports show a return of 3x – 22x
© Copyright LetsVenture.com | All rights reserved
How do you exit?
 Since you own equity in the venture, only when you sell
equity to someone else, you make money
 You do not make money on dividends / profit share
© Copyright LetsVenture.com | All rights reserved
How do you exit?
 Subsequent Rounds of Funding
 M&A
 Promoter Buyback
 IPO
© Copyright LetsVenture.com | All rights reserved
Typical Curve
0 2 4 6 8 10
Valuation
Year
Seed
Round
Angel
Round
Series
A
Series B
Series
C
Bridge
Round*
© Copyright LetsVenture.com | All rights reserved
Typical Curve
0 2 4 6 8 10
Valuation
Year
Seed
Round
Angel
Round
Series
A
Series B
Series
C
Bridge
Round*
Return*
© Copyright LetsVenture.com | All rights reserved
When ?
 Idea in a slide
 Prototype Ready
 Customer
Traction
 Paying Customers
 Product-Market
Fit
 Multiple customer
segment
 Business Model Fit
© Copyright LetsVenture.com | All rights reserved
Fund Raise Stages
© Copyright LetsVenture.com | All rights reserved
Startup Life Cycle
Ideation
POC / Beta Launched
(MVP Stage)
Early Revenues / Early Traction –
Steady Revenues
(Product Market Fit)
What:
- Validate a real customer need
- Identify a real pain point to be
solved
- Articulate the value proposition
How:
- Talk to Potential customers
- Ask for Feedback
- Network, network and network
- Eventually follow your vision /
gut
What:
- Fast Market testing of a
product or feature to get
qualitative or quantitate
feedback
- Find your early adopters /
customers
How:
- Be Lean
- Focus on providing value to
your customer
- Use validated Learnings /
Pivots and iterations to move
towards PM fit
- Borrow or Steal
What:
- Product/market fit means
being in a good market with a
product that can satisfy that
market.
How:
- Customer are
buying/subscribing
- There is referral traffic
Finding Problem / Solution Fit Finding Product / Market Fit
© Copyright LetsVenture.com | All rights reserved
Milestones & Raise
Milestones/Stage Age Revenue
Raise
Amount
From Whom
1 Venture Launched 0 – 0.5 0 5 – 25 L Self, Friends, Family
2 Beta Product Launched
B2C : Product used by real customers,
customers
B2B : Good Customer Pipeline, 1-2
trial
0.5 – 1 yr Small 25L-75L Self, Friends, Family,
Accelerators
3 Stable version
Regular Customer growth
1 – 1.5 10 – 15 L per
year
50 L – 1.5 Cr Self, Accelerators, Seed
Individual Angels
4 Product- Market fit found
Strong & Consistent Customer Growth
Clear Product & Revenue for next 2-3
1 – 2 yrs 20 – 50 L per
year
1CR – 4 Cr Individual Angels, Seed
Venture firms
5 Business Model Fit found
Clear growth Path for next 3-5 yrs
Consistent growth in paying customers
Potentially breakeven
1.5 – 3 2Cr – 5Cr per
year
3 Cr – 20 Cr Venture Funds
Note: The values in the above table are indicative only
© Copyright LetsVenture.com | All rights reserved
Fund Raise Stages
Ideation
POC / Beta
Revenues /
Scale / Growth
Finding Problem / Solution Fit
Finding Product
(Service) / Market Fit
Finding Business
Model Fit
Bootstrapped/ Friend
and Family
Angel, Seed Funds ->
VC Rounds (A,B,..)
Revenue /
Traction
Time
© Copyright LetsVenture.com | All rights reserved
Typical Raise
0 1 2 3 4 5 6 7 8 9
Seed
Round
Angel
Round
Series A
Series B
Series C
Product Market
Fit
Business Model
Fit
Bridge
Round*
3CR – 20CR
5-25L
25-75L
50L-1.5CR
1CR – 4CR
50L-1.5CR
© Copyright LetsVenture.com | All rights reserved
Evaluating Startups
© Copyright LetsVenture.com | All rights reserved
1. Passion, Purpose and Integrity
2. People don’t buy what you do but Why you do it!
3. Chemistry (with Investors and among the founders)
4. Ability to execute
5. Coachability
6. Complementary skills
7. Skin in the game
8. Think BIG!
Team
© Copyright LetsVenture.com | All rights reserved
1. What problem are you trying to solve?
2. Is the product / idea disruptive or innovative?
3. Is there differentiation that is unique and difficult to replicate?
4. Product Traction
5. Is the market large enough and growing?
6. Is the business scalable?
Product and Market
© Copyright LetsVenture.com | All rights reserved
1. Does it match my investment thesis? Can I add value?
2. Who else is investing?
3. What are my exit options?
Lead or Follow?
© Copyright LetsVenture.com | All rights reserved
- Startups with well rounded team to execute innovative ideas, gain quick customer traction, build defensible market
position, and ability to scale.
- Product companies with differentiation and ability to go global
- World class technology centric internet products
- Early Stage companies with proven traction and new business models
Investment Mantra: Heard from Angel Investors!
© Copyright LetsVenture.com | All rights reserved
As an Angel Investor – what
do you really care for?
© Copyright LetsVenture.com | All rights reserved
Exit!
© Copyright LetsVenture.com | All rights reserved
What is needed for an exit?
© Copyright LetsVenture.com | All rights reserved
Scale!
© Copyright LetsVenture.com | All rights reserved
Key is to develop one or two
specific points why will this
startup succeed
(Investment Thesis)
© Copyright LetsVenture.com | All rights reserved
When not to Invest
 Exit Discomfort
 Founder Discomfort
 Business Discomfort
 Structure Discomfort
VALUATIONS &
TERM SHEETS
© Copyright LetsVenture.com | All rights reserved
Valuation
Your business is worth what somebody is willing to pay for it..
Valuation at Early
Stage more of an
Art than Science
© Copyright LetsVenture.com | All rights reserved
 Pre-Money = the value of your company now

 Post-Money = the value of your company after the investor put the money in
Definitions
1Mn 2Mn 3Mn
=+
Investment
Pre-Money
Post-Money
© Copyright LetsVenture.com | All rights reserved
Valuing an Early Stage Startup
1. Supply and Demand
2. Your Industry / Sector
3. Other Factors specific to Your Business!
4. Finally, Understand ‘Equity Planning’
4FACTORS
© Copyright LetsVenture.com | All rights reserved
 Supply and Demand
 Patented technology
 Exclusive market partners
 Improved Traction
 How many more Angels / VC’s willing to invest?
 Before you start Fund raise, make sure your business is perceived as ‘new’, ‘unique’, ‘exciting’
 Are you a ‘Me-to’, ‘commodity business’ ?
Supply and Demand
© Copyright LetsVenture.com | All rights reserved
 Each Industry / Sector has unique Valuation Dynamics
 Study valuations of similar startups in your space
 Study exits that happened in this space (acquihires, M&A)
 Study EBITDA (earnings before interest, tax, depreciation, and amortization)
 Understand growth metrics in your industry
 Understand growth metrics
Industry / Sector Dynamics
© Copyright LetsVenture.com | All rights reserved
 Stage of the startup
 Will you survive the next 5 years?
 Cost to grow the business (Customer Acquisition cost, Technology costs)
 Scalability of the business (global versus local play)
 Founding Team Profile
 Advisory Board / Mentors Involved
Other factors Specific to Your Business!
© Copyright LetsVenture.com | All rights reserved
 Try and get term sheets from multiple investors
 How many investors are willing to invest?
 How desperate is the Entrepreneur?
 Think a valuation that gives your Investors 10x!
 Founder Vesting
 Understand the details of a Term Sheet (some parameters could impact the value of your startup!)
 Liquidation Preference (could tilt outcomes on exit)
 Dilution (and anti dilution)
 Option Pool (on pre-money or post money?)
Finally …
 Letter of Intent which investors sign before
Share Holder agreeement
 LetsVenture has a standard term sheet
 After term sheet signed, Share Holder
Agreement (SHA) is the legal document
signed
 Shared issued to you, post money in bank
and SHA signing
What is a termsheet?
1. Liquidation Preference (could tilt outcomes on exit)
Participating or Non Participating:
 Non Participating (as per LV) – Investor gets to take
participate pro-rata.
 Participating: Takes his money out and then
2. Anti dilution:
Taken money at x valuation. If there is a down round,
given to investors (full rachet) – broad based weighted
compensation.
3. Option Pool (on pre-money or post money?)
4. Board Composition
Look for 1 director,
1 observer (not recognized by Indian law) but a backup if
not be available
Understand the
details of a Term
Sheet
(some parameters could
impact the value of your
startup!)
© Copyright LetsVenture.com | All rights reserved
The Funding Process
Listen
to
Pitches
Verbal
Commitme
nt to Invest
Term
Sheet
SHA Closure
Legal DD
Fix
Issues
Financial
DD
Drop
Issues
too
serious?
YN
All Ok?
Y
N
© Copyright LetsVenture.com | All rights reserved
Others
 Legal & Accounting Fees
 Mostly all investors put the burden of the legal fees on the
entrepreneur
 No Shop
 This prevents entrepreneurs from shopping around with
other investors while the dialogue is on. Time period can
range from a few weeks to a few months.
 Due Diligence
© Copyright LetsVenture.com | All rights reserved
How do you start?
© Copyright LetsVenture.com | All rights reserved
Getting Started
 Set aside a “forgettable” corpus
 Make a portfolio of ~10 investments over 2-3 years and possibly
~20+ over 4-5 years
 Lean on experienced angels to get started with
 Invest in your area of expertise
 Help the startup without being over bearing
 Meet the founders, spend time with them
© Copyright LetsVenture.com | All rights reserved
Gradually work towards
having your own Investment
Thesis
© Copyright LetsVenture.com | All rights reserved
Investment Thesis
 Your theory of investment
 Examples
 Product Companies with differentiation and potential to go global
 Both niche & mass products / services startups with potential for emerging and
developed markets
 Invest in ventures which work towards bringing a change in the social sector
© Copyright LetsVenture.com | All rights reserved
Lead Investor
 Typically an investor leads the team in a syndicate. A lead investor has the following
major tasks
 Setting up the terms of the deal
 Help Build a syndicate
 Possibly take a board seat and help run the company
 Facilitate next round of funding
© Copyright LetsVenture.com | All rights reserved
Post Deal Management
 Good to build a rhythm of a monthly review / quarterly report
 Provide them help without being over bearing
 Exercise patience when startup founders are not taking your suggestions
 Open Doors
© Copyright LetsVenture.com | All rights reserved
Quick Tips
 Get started by participating in syndicates
 Network with experienced investors
 Invest in the area of your expertise
 Develop relationships with the entrepreneurs
 Allocate corpus
 When in doubt, do not invest!
 In the end, go with your gut!
Thank You!
www.LetsVenture.com
@letsventurei
n
shanti@letsventure.com
Twitter Handle

Weitere ähnliche Inhalte

Was ist angesagt?

Minimum Viable Product and Pivot
Minimum Viable Product and PivotMinimum Viable Product and Pivot
Minimum Viable Product and PivotBlaz Kos
 
Investment analysis of startups
Investment analysis of startups Investment analysis of startups
Investment analysis of startups Anton Fedorov
 
Women entrepreneurship in india
Women entrepreneurship in indiaWomen entrepreneurship in india
Women entrepreneurship in indiaASIF KHAN
 
5-minute primer on VC Term Sheets
5-minute primer on VC Term Sheets5-minute primer on VC Term Sheets
5-minute primer on VC Term SheetsLeo Dirac
 
Summer Internship Project Report for KARVY
Summer Internship Project Report  for KARVYSummer Internship Project Report  for KARVY
Summer Internship Project Report for KARVYAman-rai
 
A Study on Investors Perception Towards Sharemarket in Sharekhan Ltd
A Study on Investors Perception Towards Sharemarket in Sharekhan LtdA Study on Investors Perception Towards Sharemarket in Sharekhan Ltd
A Study on Investors Perception Towards Sharemarket in Sharekhan Ltdijtsrd
 
Kotak securities
Kotak securitiesKotak securities
Kotak securitiesvs1513
 
Summer Internship Report
Summer Internship ReportSummer Internship Report
Summer Internship ReportHardik Shah
 
Comparative analysis-of-equity-and-derivative-market
Comparative analysis-of-equity-and-derivative-marketComparative analysis-of-equity-and-derivative-market
Comparative analysis-of-equity-and-derivative-marketAdil Shaikh
 
A project report on e i-c analysis of capital goods sector at kotak mahindra
A project report on e i-c analysis of capital goods sector at kotak mahindraA project report on e i-c analysis of capital goods sector at kotak mahindra
A project report on e i-c analysis of capital goods sector at kotak mahindraBabasab Patil
 
Equity trading in india
Equity trading in indiaEquity trading in india
Equity trading in indiasmriti31dubei
 
Valuation for Start-ups
Valuation for Start-ups Valuation for Start-ups
Valuation for Start-ups Kesava Reddy
 
KARVY Internship report
KARVY Internship reportKARVY Internship report
KARVY Internship reportyash pal
 
30838403 comparative-analysis-of-mutual-funds
30838403 comparative-analysis-of-mutual-funds30838403 comparative-analysis-of-mutual-funds
30838403 comparative-analysis-of-mutual-fundsNagesh Halgonde
 
A Study on Investment Pattern of Investors on Different Products
A Study on Investment Pattern of Investors on Different ProductsA Study on Investment Pattern of Investors on Different Products
A Study on Investment Pattern of Investors on Different ProductsProjects Kart
 
A study of consumer behaviour towards equities and derivatives market in udai...
A study of consumer behaviour towards equities and derivatives market in udai...A study of consumer behaviour towards equities and derivatives market in udai...
A study of consumer behaviour towards equities and derivatives market in udai...Projects Kart
 
Corporate VC - Qualcomm Ventures
Corporate VC - Qualcomm VenturesCorporate VC - Qualcomm Ventures
Corporate VC - Qualcomm VenturesStartupAlliance
 

Was ist angesagt? (20)

Angel Investors
Angel InvestorsAngel Investors
Angel Investors
 
Minimum Viable Product and Pivot
Minimum Viable Product and PivotMinimum Viable Product and Pivot
Minimum Viable Product and Pivot
 
Investment analysis of startups
Investment analysis of startups Investment analysis of startups
Investment analysis of startups
 
Women entrepreneurship in india
Women entrepreneurship in indiaWomen entrepreneurship in india
Women entrepreneurship in india
 
5-minute primer on VC Term Sheets
5-minute primer on VC Term Sheets5-minute primer on VC Term Sheets
5-minute primer on VC Term Sheets
 
Summer Internship Project Report for KARVY
Summer Internship Project Report  for KARVYSummer Internship Project Report  for KARVY
Summer Internship Project Report for KARVY
 
A Study on Investors Perception Towards Sharemarket in Sharekhan Ltd
A Study on Investors Perception Towards Sharemarket in Sharekhan LtdA Study on Investors Perception Towards Sharemarket in Sharekhan Ltd
A Study on Investors Perception Towards Sharemarket in Sharekhan Ltd
 
The 64 Wealth Vectors
The 64 Wealth VectorsThe 64 Wealth Vectors
The 64 Wealth Vectors
 
SIP FINAL PROJECT
SIP FINAL PROJECTSIP FINAL PROJECT
SIP FINAL PROJECT
 
Kotak securities
Kotak securitiesKotak securities
Kotak securities
 
Summer Internship Report
Summer Internship ReportSummer Internship Report
Summer Internship Report
 
Comparative analysis-of-equity-and-derivative-market
Comparative analysis-of-equity-and-derivative-marketComparative analysis-of-equity-and-derivative-market
Comparative analysis-of-equity-and-derivative-market
 
A project report on e i-c analysis of capital goods sector at kotak mahindra
A project report on e i-c analysis of capital goods sector at kotak mahindraA project report on e i-c analysis of capital goods sector at kotak mahindra
A project report on e i-c analysis of capital goods sector at kotak mahindra
 
Equity trading in india
Equity trading in indiaEquity trading in india
Equity trading in india
 
Valuation for Start-ups
Valuation for Start-ups Valuation for Start-ups
Valuation for Start-ups
 
KARVY Internship report
KARVY Internship reportKARVY Internship report
KARVY Internship report
 
30838403 comparative-analysis-of-mutual-funds
30838403 comparative-analysis-of-mutual-funds30838403 comparative-analysis-of-mutual-funds
30838403 comparative-analysis-of-mutual-funds
 
A Study on Investment Pattern of Investors on Different Products
A Study on Investment Pattern of Investors on Different ProductsA Study on Investment Pattern of Investors on Different Products
A Study on Investment Pattern of Investors on Different Products
 
A study of consumer behaviour towards equities and derivatives market in udai...
A study of consumer behaviour towards equities and derivatives market in udai...A study of consumer behaviour towards equities and derivatives market in udai...
A study of consumer behaviour towards equities and derivatives market in udai...
 
Corporate VC - Qualcomm Ventures
Corporate VC - Qualcomm VenturesCorporate VC - Qualcomm Ventures
Corporate VC - Qualcomm Ventures
 

Ähnlich wie Angel Investing Made Easy, Shanti Mohan

Angel Investing Made Easy, Shanti Mohan, Bangalore
Angel Investing Made Easy, Shanti Mohan, BangaloreAngel Investing Made Easy, Shanti Mohan, Bangalore
Angel Investing Made Easy, Shanti Mohan, BangaloreSanjay Jha
 
Angel Funding Made Easy - Shanti Mohan, Founder @LetsVenture
Angel Funding Made Easy - Shanti Mohan, Founder @LetsVentureAngel Funding Made Easy - Shanti Mohan, Founder @LetsVenture
Angel Funding Made Easy - Shanti Mohan, Founder @LetsVentureSanjay Jha
 
Angel Investments Made Easy
Angel Investments Made EasyAngel Investments Made Easy
Angel Investments Made EasyManish Singhal
 
Startup Funding Made Easy by Shanti Mohan, Founder @LetsVenture
Startup Funding Made Easy by Shanti Mohan, Founder @LetsVentureStartup Funding Made Easy by Shanti Mohan, Founder @LetsVenture
Startup Funding Made Easy by Shanti Mohan, Founder @LetsVentureSanjay Jha
 
Angel investing bootcamp
Angel investing bootcampAngel investing bootcamp
Angel investing bootcampRavi Trivedi
 
Angel and Venture fundraising - A 360 perspective
Angel and Venture fundraising - A 360 perspectiveAngel and Venture fundraising - A 360 perspective
Angel and Venture fundraising - A 360 perspectiveRavi Trivedi
 
Venture Clinic 29 30 Apr2008 Roydean
Venture Clinic 29 30 Apr2008  RoydeanVenture Clinic 29 30 Apr2008  Roydean
Venture Clinic 29 30 Apr2008 RoydeanRoydean Osman
 
Primer on angel investing 1000 angels
Primer on angel investing 1000 angelsPrimer on angel investing 1000 angels
Primer on angel investing 1000 angelsDiego Jose Ramos
 
Presentation - Mr. Tomas Martunas
Presentation - Mr. Tomas MartunasPresentation - Mr. Tomas Martunas
Presentation - Mr. Tomas MartunasMobileNepal
 
Entrepreneurship Workshop Yerevan -Building Value and Startup Funding
Entrepreneurship Workshop Yerevan -Building Value and Startup FundingEntrepreneurship Workshop Yerevan -Building Value and Startup Funding
Entrepreneurship Workshop Yerevan -Building Value and Startup FundingGrow VC Group
 
Vc Intro Seedfund Iimc
Vc Intro Seedfund IimcVc Intro Seedfund Iimc
Vc Intro Seedfund Iimcguestab57a1
 
Starting Up:Introduction to venture Capital: by Anand Lunia
Starting Up:Introduction to venture Capital: by Anand LuniaStarting Up:Introduction to venture Capital: by Anand Lunia
Starting Up:Introduction to venture Capital: by Anand LuniaGetEvangelized
 
FiBAN - Pitching to business angels - By Bill Payne
FiBAN - Pitching to business angels - By Bill PayneFiBAN - Pitching to business angels - By Bill Payne
FiBAN - Pitching to business angels - By Bill PayneFiBAN
 
Investor presentations hf_12november2012
Investor presentations hf_12november2012Investor presentations hf_12november2012
Investor presentations hf_12november2012Alena Kalibaba
 
Getting angel or VC funding for your venture
Getting angel or VC funding for your ventureGetting angel or VC funding for your venture
Getting angel or VC funding for your venturePrajakt Raut
 
Gettingangelvcfundingforyourventure 150323235034-conversion-gate01
Gettingangelvcfundingforyourventure 150323235034-conversion-gate01Gettingangelvcfundingforyourventure 150323235034-conversion-gate01
Gettingangelvcfundingforyourventure 150323235034-conversion-gate01Michael Kleven
 
Lee marvin pitching-hacks
Lee marvin pitching-hacksLee marvin pitching-hacks
Lee marvin pitching-hacksAgate Studio
 
Writing a business plan
Writing  a business planWriting  a business plan
Writing a business planAmit Verma
 

Ähnlich wie Angel Investing Made Easy, Shanti Mohan (20)

Angel Investing Made Easy, Shanti Mohan, Bangalore
Angel Investing Made Easy, Shanti Mohan, BangaloreAngel Investing Made Easy, Shanti Mohan, Bangalore
Angel Investing Made Easy, Shanti Mohan, Bangalore
 
Angel Funding Made Easy - Shanti Mohan, Founder @LetsVenture
Angel Funding Made Easy - Shanti Mohan, Founder @LetsVentureAngel Funding Made Easy - Shanti Mohan, Founder @LetsVenture
Angel Funding Made Easy - Shanti Mohan, Founder @LetsVenture
 
Angel Investments Made Easy
Angel Investments Made EasyAngel Investments Made Easy
Angel Investments Made Easy
 
Startup Funding Made Easy by Shanti Mohan, Founder @LetsVenture
Startup Funding Made Easy by Shanti Mohan, Founder @LetsVentureStartup Funding Made Easy by Shanti Mohan, Founder @LetsVenture
Startup Funding Made Easy by Shanti Mohan, Founder @LetsVenture
 
Angel investing bootcamp
Angel investing bootcampAngel investing bootcamp
Angel investing bootcamp
 
Angel and Venture fundraising - A 360 perspective
Angel and Venture fundraising - A 360 perspectiveAngel and Venture fundraising - A 360 perspective
Angel and Venture fundraising - A 360 perspective
 
Venture Clinic 29 30 Apr2008 Roydean
Venture Clinic 29 30 Apr2008  RoydeanVenture Clinic 29 30 Apr2008  Roydean
Venture Clinic 29 30 Apr2008 Roydean
 
Primer on angel investing 1000 angels
Primer on angel investing 1000 angelsPrimer on angel investing 1000 angels
Primer on angel investing 1000 angels
 
Presentation - Mr. Tomas Martunas
Presentation - Mr. Tomas MartunasPresentation - Mr. Tomas Martunas
Presentation - Mr. Tomas Martunas
 
Are You Investor-Ready?
Are You Investor-Ready?Are You Investor-Ready?
Are You Investor-Ready?
 
Angel Fundraising
Angel FundraisingAngel Fundraising
Angel Fundraising
 
Entrepreneurship Workshop Yerevan -Building Value and Startup Funding
Entrepreneurship Workshop Yerevan -Building Value and Startup FundingEntrepreneurship Workshop Yerevan -Building Value and Startup Funding
Entrepreneurship Workshop Yerevan -Building Value and Startup Funding
 
Vc Intro Seedfund Iimc
Vc Intro Seedfund IimcVc Intro Seedfund Iimc
Vc Intro Seedfund Iimc
 
Starting Up:Introduction to venture Capital: by Anand Lunia
Starting Up:Introduction to venture Capital: by Anand LuniaStarting Up:Introduction to venture Capital: by Anand Lunia
Starting Up:Introduction to venture Capital: by Anand Lunia
 
FiBAN - Pitching to business angels - By Bill Payne
FiBAN - Pitching to business angels - By Bill PayneFiBAN - Pitching to business angels - By Bill Payne
FiBAN - Pitching to business angels - By Bill Payne
 
Investor presentations hf_12november2012
Investor presentations hf_12november2012Investor presentations hf_12november2012
Investor presentations hf_12november2012
 
Getting angel or VC funding for your venture
Getting angel or VC funding for your ventureGetting angel or VC funding for your venture
Getting angel or VC funding for your venture
 
Gettingangelvcfundingforyourventure 150323235034-conversion-gate01
Gettingangelvcfundingforyourventure 150323235034-conversion-gate01Gettingangelvcfundingforyourventure 150323235034-conversion-gate01
Gettingangelvcfundingforyourventure 150323235034-conversion-gate01
 
Lee marvin pitching-hacks
Lee marvin pitching-hacksLee marvin pitching-hacks
Lee marvin pitching-hacks
 
Writing a business plan
Writing  a business planWriting  a business plan
Writing a business plan
 

Kürzlich hochgeladen

Paradip CALL GIRL❤7091819311❤CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
Paradip CALL GIRL❤7091819311❤CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDINGParadip CALL GIRL❤7091819311❤CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
Paradip CALL GIRL❤7091819311❤CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDINGpr788182
 
Jual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan Cytotec
Jual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan CytotecJual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan Cytotec
Jual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan CytotecZurliaSoop
 
How to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League CityHow to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League CityEric T. Tung
 
Falcon Invoice Discounting: Aviate Your Cash Flow Challenges
Falcon Invoice Discounting: Aviate Your Cash Flow ChallengesFalcon Invoice Discounting: Aviate Your Cash Flow Challenges
Falcon Invoice Discounting: Aviate Your Cash Flow Challengeshemanthkumar470700
 
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)Adnet Communications
 
Power point presentation on enterprise performance management
Power point presentation on enterprise performance managementPower point presentation on enterprise performance management
Power point presentation on enterprise performance managementVaishnaviGunji
 
Falcon Invoice Discounting: Tailored Financial Wings
Falcon Invoice Discounting: Tailored Financial WingsFalcon Invoice Discounting: Tailored Financial Wings
Falcon Invoice Discounting: Tailored Financial WingsFalcon Invoice Discounting
 
Rice Manufacturers in India | Shree Krishna Exports
Rice Manufacturers in India | Shree Krishna ExportsRice Manufacturers in India | Shree Krishna Exports
Rice Manufacturers in India | Shree Krishna ExportsShree Krishna Exports
 
New 2024 Cannabis Edibles Investor Pitch Deck Template
New 2024 Cannabis Edibles Investor Pitch Deck TemplateNew 2024 Cannabis Edibles Investor Pitch Deck Template
New 2024 Cannabis Edibles Investor Pitch Deck TemplateCannaBusinessPlans
 
Uneak White's Personal Brand Exploration Presentation
Uneak White's Personal Brand Exploration PresentationUneak White's Personal Brand Exploration Presentation
Uneak White's Personal Brand Exploration Presentationuneakwhite
 
joint cost.pptx COST ACCOUNTING Sixteenth Edition ...
joint cost.pptx  COST ACCOUNTING  Sixteenth Edition                          ...joint cost.pptx  COST ACCOUNTING  Sixteenth Edition                          ...
joint cost.pptx COST ACCOUNTING Sixteenth Edition ...NadhimTaha
 
Famous Olympic Siblings from the 21st Century
Famous Olympic Siblings from the 21st CenturyFamous Olympic Siblings from the 21st Century
Famous Olympic Siblings from the 21st Centuryrwgiffor
 
Putting the SPARK into Virtual Training.pptx
Putting the SPARK into Virtual Training.pptxPutting the SPARK into Virtual Training.pptx
Putting the SPARK into Virtual Training.pptxCynthia Clay
 
BeMetals Investor Presentation_May 3, 2024.pdf
BeMetals Investor Presentation_May 3, 2024.pdfBeMetals Investor Presentation_May 3, 2024.pdf
BeMetals Investor Presentation_May 3, 2024.pdfDerekIwanaka1
 
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdfDr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdfAdmir Softic
 
Call 7737669865 Vadodara Call Girls Service at your Door Step Available All Time
Call 7737669865 Vadodara Call Girls Service at your Door Step Available All TimeCall 7737669865 Vadodara Call Girls Service at your Door Step Available All Time
Call 7737669865 Vadodara Call Girls Service at your Door Step Available All Timegargpaaro
 
Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...
Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...
Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...ssuserf63bd7
 
Pre Engineered Building Manufacturers Hyderabad.pptx
Pre Engineered  Building Manufacturers Hyderabad.pptxPre Engineered  Building Manufacturers Hyderabad.pptx
Pre Engineered Building Manufacturers Hyderabad.pptxRoofing Contractor
 

Kürzlich hochgeladen (20)

Paradip CALL GIRL❤7091819311❤CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
Paradip CALL GIRL❤7091819311❤CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDINGParadip CALL GIRL❤7091819311❤CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
Paradip CALL GIRL❤7091819311❤CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
 
Jual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan Cytotec
Jual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan CytotecJual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan Cytotec
Jual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan Cytotec
 
How to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League CityHow to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League City
 
Falcon Invoice Discounting: Aviate Your Cash Flow Challenges
Falcon Invoice Discounting: Aviate Your Cash Flow ChallengesFalcon Invoice Discounting: Aviate Your Cash Flow Challenges
Falcon Invoice Discounting: Aviate Your Cash Flow Challenges
 
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
 
Power point presentation on enterprise performance management
Power point presentation on enterprise performance managementPower point presentation on enterprise performance management
Power point presentation on enterprise performance management
 
Falcon Invoice Discounting: Tailored Financial Wings
Falcon Invoice Discounting: Tailored Financial WingsFalcon Invoice Discounting: Tailored Financial Wings
Falcon Invoice Discounting: Tailored Financial Wings
 
Rice Manufacturers in India | Shree Krishna Exports
Rice Manufacturers in India | Shree Krishna ExportsRice Manufacturers in India | Shree Krishna Exports
Rice Manufacturers in India | Shree Krishna Exports
 
New 2024 Cannabis Edibles Investor Pitch Deck Template
New 2024 Cannabis Edibles Investor Pitch Deck TemplateNew 2024 Cannabis Edibles Investor Pitch Deck Template
New 2024 Cannabis Edibles Investor Pitch Deck Template
 
Uneak White's Personal Brand Exploration Presentation
Uneak White's Personal Brand Exploration PresentationUneak White's Personal Brand Exploration Presentation
Uneak White's Personal Brand Exploration Presentation
 
joint cost.pptx COST ACCOUNTING Sixteenth Edition ...
joint cost.pptx  COST ACCOUNTING  Sixteenth Edition                          ...joint cost.pptx  COST ACCOUNTING  Sixteenth Edition                          ...
joint cost.pptx COST ACCOUNTING Sixteenth Edition ...
 
!~+971581248768>> SAFE AND ORIGINAL ABORTION PILLS FOR SALE IN DUBAI AND ABUD...
!~+971581248768>> SAFE AND ORIGINAL ABORTION PILLS FOR SALE IN DUBAI AND ABUD...!~+971581248768>> SAFE AND ORIGINAL ABORTION PILLS FOR SALE IN DUBAI AND ABUD...
!~+971581248768>> SAFE AND ORIGINAL ABORTION PILLS FOR SALE IN DUBAI AND ABUD...
 
Famous Olympic Siblings from the 21st Century
Famous Olympic Siblings from the 21st CenturyFamous Olympic Siblings from the 21st Century
Famous Olympic Siblings from the 21st Century
 
Putting the SPARK into Virtual Training.pptx
Putting the SPARK into Virtual Training.pptxPutting the SPARK into Virtual Training.pptx
Putting the SPARK into Virtual Training.pptx
 
BeMetals Investor Presentation_May 3, 2024.pdf
BeMetals Investor Presentation_May 3, 2024.pdfBeMetals Investor Presentation_May 3, 2024.pdf
BeMetals Investor Presentation_May 3, 2024.pdf
 
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdfDr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
 
Call 7737669865 Vadodara Call Girls Service at your Door Step Available All Time
Call 7737669865 Vadodara Call Girls Service at your Door Step Available All TimeCall 7737669865 Vadodara Call Girls Service at your Door Step Available All Time
Call 7737669865 Vadodara Call Girls Service at your Door Step Available All Time
 
Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...
Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...
Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...
 
unwanted pregnancy Kit [+918133066128] Abortion Pills IN Dubai UAE Abudhabi
unwanted pregnancy Kit [+918133066128] Abortion Pills IN Dubai UAE Abudhabiunwanted pregnancy Kit [+918133066128] Abortion Pills IN Dubai UAE Abudhabi
unwanted pregnancy Kit [+918133066128] Abortion Pills IN Dubai UAE Abudhabi
 
Pre Engineered Building Manufacturers Hyderabad.pptx
Pre Engineered  Building Manufacturers Hyderabad.pptxPre Engineered  Building Manufacturers Hyderabad.pptx
Pre Engineered Building Manufacturers Hyderabad.pptx
 

Angel Investing Made Easy, Shanti Mohan

  • 1. © Copyright LetsVenture.com | All rights reserved Shanti Mohan Founder & CEO shanti@letsventure.com Twitter Handle @letsventurein
  • 2. © Copyright LetsVenture.com | All rights reserved Agenda  State of the Angel Investment in India  Angel Investments 101  What is Angel Investment? Why should you do it?  How do you make a return?  How do you evaluate a startup?  Deal Dynamics  Valuation  Process  Primer on Term Sheets / SHA  How do you get started?  Syndicates on LV  Pitches with analysis
  • 3. © Copyright LetsVenture.com | All rights reserved State of seed/Angel Investments  2012 Deals and Roughly between 120-150 deals  Networks (IAN, Mumbai Angels, Hyderabad Angels, Bangalore Angels) etc contributing to guess estimate of 30-35% of the deals  Median investment value for Seed/Angel investment: 1.5 CR  Roughly 50 deals between Dec-Mar 13  Rise of the institutional first cheque (Blume, Kae, firstcheque, Harvard, 500startups etc)  Start of incubators
  • 4. © Copyright LetsVenture.com | All rights reserved State of seed/Angel Investments  2013 • Slight slow down (Impact of Section 56 ?) • New players (including incubators) starting to deploy funds • RISE of the incubation model (today approx 50+ incubators) • Accelerators working on batches 2 & 3 • HOT sectors (not including consolidation): Healthcare, Education • LetsVenture Founded in Sept 2013
  • 5. © Copyright LetsVenture.com | All rights reserved State of seed/Angel Investments  2014 • India story becomes strong • 31 global funds enter the India market • VC’s actively playing in early stage (IDG, Sequoia, Accel, SAIF) • LetsVenture completes 23 deal in end of first year, with 6.5m being committed online
  • 6. © Copyright LetsVenture.com | All rights reserved SEED-STAGE FUNDING IN INDIA FY10 – FY15 • Enter key takeaway of this slide
  • 7. © Copyright LetsVenture.com | All rights reserved What we learnt in the last 1.5 years (2014/15) • New persona of angel investors have emerged • Entrepreneur turned investors • Second generation family business owners • Global Indian • Corporate MNC • Online investing is on the rise (LV is India’s largest platform for startup funding) • Early Stage investing will include Tier 2 cities, angel groups, micro funds and early stage VC’s
  • 8. © Copyright LetsVenture.com | All rights reserved Do you want to be part of the new investing wave?
  • 9. © Copyright LetsVenture.com | All rights reserved Why Angel Invest?  Support Entrepreneurship  Leverage your knowledge and connections  Develop an alternate asset class  Make Money
  • 10. © Copyright LetsVenture.com | All rights reserved Who is an Angel Investor?  Strong Passion for entrepreneurship  It is nearly a pseudo entrepreneurship  Bring value to the startups  Anyone with Surplus capital which can be invested
  • 11. © Copyright LetsVenture.com | All rights reserved What returns can you expect?  2/3 of startups fail world wide  75% of the angel investments do not make returns  Very high risk / High Return Game India, still a young eco-system. Not many data points…  Some reports show a return of 3x – 22x
  • 12. © Copyright LetsVenture.com | All rights reserved How do you exit?  Since you own equity in the venture, only when you sell equity to someone else, you make money  You do not make money on dividends / profit share
  • 13. © Copyright LetsVenture.com | All rights reserved How do you exit?  Subsequent Rounds of Funding  M&A  Promoter Buyback  IPO
  • 14. © Copyright LetsVenture.com | All rights reserved Typical Curve 0 2 4 6 8 10 Valuation Year Seed Round Angel Round Series A Series B Series C Bridge Round*
  • 15. © Copyright LetsVenture.com | All rights reserved Typical Curve 0 2 4 6 8 10 Valuation Year Seed Round Angel Round Series A Series B Series C Bridge Round* Return*
  • 16. © Copyright LetsVenture.com | All rights reserved When ?  Idea in a slide  Prototype Ready  Customer Traction  Paying Customers  Product-Market Fit  Multiple customer segment  Business Model Fit
  • 17. © Copyright LetsVenture.com | All rights reserved Fund Raise Stages
  • 18. © Copyright LetsVenture.com | All rights reserved Startup Life Cycle Ideation POC / Beta Launched (MVP Stage) Early Revenues / Early Traction – Steady Revenues (Product Market Fit) What: - Validate a real customer need - Identify a real pain point to be solved - Articulate the value proposition How: - Talk to Potential customers - Ask for Feedback - Network, network and network - Eventually follow your vision / gut What: - Fast Market testing of a product or feature to get qualitative or quantitate feedback - Find your early adopters / customers How: - Be Lean - Focus on providing value to your customer - Use validated Learnings / Pivots and iterations to move towards PM fit - Borrow or Steal What: - Product/market fit means being in a good market with a product that can satisfy that market. How: - Customer are buying/subscribing - There is referral traffic Finding Problem / Solution Fit Finding Product / Market Fit
  • 19. © Copyright LetsVenture.com | All rights reserved Milestones & Raise Milestones/Stage Age Revenue Raise Amount From Whom 1 Venture Launched 0 – 0.5 0 5 – 25 L Self, Friends, Family 2 Beta Product Launched B2C : Product used by real customers, customers B2B : Good Customer Pipeline, 1-2 trial 0.5 – 1 yr Small 25L-75L Self, Friends, Family, Accelerators 3 Stable version Regular Customer growth 1 – 1.5 10 – 15 L per year 50 L – 1.5 Cr Self, Accelerators, Seed Individual Angels 4 Product- Market fit found Strong & Consistent Customer Growth Clear Product & Revenue for next 2-3 1 – 2 yrs 20 – 50 L per year 1CR – 4 Cr Individual Angels, Seed Venture firms 5 Business Model Fit found Clear growth Path for next 3-5 yrs Consistent growth in paying customers Potentially breakeven 1.5 – 3 2Cr – 5Cr per year 3 Cr – 20 Cr Venture Funds Note: The values in the above table are indicative only
  • 20. © Copyright LetsVenture.com | All rights reserved Fund Raise Stages Ideation POC / Beta Revenues / Scale / Growth Finding Problem / Solution Fit Finding Product (Service) / Market Fit Finding Business Model Fit Bootstrapped/ Friend and Family Angel, Seed Funds -> VC Rounds (A,B,..) Revenue / Traction Time
  • 21. © Copyright LetsVenture.com | All rights reserved Typical Raise 0 1 2 3 4 5 6 7 8 9 Seed Round Angel Round Series A Series B Series C Product Market Fit Business Model Fit Bridge Round* 3CR – 20CR 5-25L 25-75L 50L-1.5CR 1CR – 4CR 50L-1.5CR
  • 22. © Copyright LetsVenture.com | All rights reserved Evaluating Startups
  • 23. © Copyright LetsVenture.com | All rights reserved 1. Passion, Purpose and Integrity 2. People don’t buy what you do but Why you do it! 3. Chemistry (with Investors and among the founders) 4. Ability to execute 5. Coachability 6. Complementary skills 7. Skin in the game 8. Think BIG! Team
  • 24. © Copyright LetsVenture.com | All rights reserved 1. What problem are you trying to solve? 2. Is the product / idea disruptive or innovative? 3. Is there differentiation that is unique and difficult to replicate? 4. Product Traction 5. Is the market large enough and growing? 6. Is the business scalable? Product and Market
  • 25. © Copyright LetsVenture.com | All rights reserved 1. Does it match my investment thesis? Can I add value? 2. Who else is investing? 3. What are my exit options? Lead or Follow?
  • 26. © Copyright LetsVenture.com | All rights reserved - Startups with well rounded team to execute innovative ideas, gain quick customer traction, build defensible market position, and ability to scale. - Product companies with differentiation and ability to go global - World class technology centric internet products - Early Stage companies with proven traction and new business models Investment Mantra: Heard from Angel Investors!
  • 27. © Copyright LetsVenture.com | All rights reserved As an Angel Investor – what do you really care for?
  • 28. © Copyright LetsVenture.com | All rights reserved Exit!
  • 29. © Copyright LetsVenture.com | All rights reserved What is needed for an exit?
  • 30. © Copyright LetsVenture.com | All rights reserved Scale!
  • 31. © Copyright LetsVenture.com | All rights reserved Key is to develop one or two specific points why will this startup succeed (Investment Thesis)
  • 32. © Copyright LetsVenture.com | All rights reserved When not to Invest  Exit Discomfort  Founder Discomfort  Business Discomfort  Structure Discomfort
  • 34. © Copyright LetsVenture.com | All rights reserved Valuation Your business is worth what somebody is willing to pay for it.. Valuation at Early Stage more of an Art than Science
  • 35. © Copyright LetsVenture.com | All rights reserved  Pre-Money = the value of your company now
  Post-Money = the value of your company after the investor put the money in Definitions 1Mn 2Mn 3Mn =+ Investment Pre-Money Post-Money
  • 36. © Copyright LetsVenture.com | All rights reserved Valuing an Early Stage Startup 1. Supply and Demand 2. Your Industry / Sector 3. Other Factors specific to Your Business! 4. Finally, Understand ‘Equity Planning’ 4FACTORS
  • 37. © Copyright LetsVenture.com | All rights reserved  Supply and Demand  Patented technology  Exclusive market partners  Improved Traction  How many more Angels / VC’s willing to invest?  Before you start Fund raise, make sure your business is perceived as ‘new’, ‘unique’, ‘exciting’  Are you a ‘Me-to’, ‘commodity business’ ? Supply and Demand
  • 38. © Copyright LetsVenture.com | All rights reserved  Each Industry / Sector has unique Valuation Dynamics  Study valuations of similar startups in your space  Study exits that happened in this space (acquihires, M&A)  Study EBITDA (earnings before interest, tax, depreciation, and amortization)  Understand growth metrics in your industry  Understand growth metrics Industry / Sector Dynamics
  • 39. © Copyright LetsVenture.com | All rights reserved  Stage of the startup  Will you survive the next 5 years?  Cost to grow the business (Customer Acquisition cost, Technology costs)  Scalability of the business (global versus local play)  Founding Team Profile  Advisory Board / Mentors Involved Other factors Specific to Your Business!
  • 40. © Copyright LetsVenture.com | All rights reserved  Try and get term sheets from multiple investors  How many investors are willing to invest?  How desperate is the Entrepreneur?  Think a valuation that gives your Investors 10x!  Founder Vesting  Understand the details of a Term Sheet (some parameters could impact the value of your startup!)  Liquidation Preference (could tilt outcomes on exit)  Dilution (and anti dilution)  Option Pool (on pre-money or post money?) Finally …
  • 41.  Letter of Intent which investors sign before Share Holder agreeement  LetsVenture has a standard term sheet  After term sheet signed, Share Holder Agreement (SHA) is the legal document signed  Shared issued to you, post money in bank and SHA signing What is a termsheet?
  • 42. 1. Liquidation Preference (could tilt outcomes on exit) Participating or Non Participating:  Non Participating (as per LV) – Investor gets to take participate pro-rata.  Participating: Takes his money out and then 2. Anti dilution: Taken money at x valuation. If there is a down round, given to investors (full rachet) – broad based weighted compensation. 3. Option Pool (on pre-money or post money?) 4. Board Composition Look for 1 director, 1 observer (not recognized by Indian law) but a backup if not be available Understand the details of a Term Sheet (some parameters could impact the value of your startup!)
  • 43. © Copyright LetsVenture.com | All rights reserved The Funding Process Listen to Pitches Verbal Commitme nt to Invest Term Sheet SHA Closure Legal DD Fix Issues Financial DD Drop Issues too serious? YN All Ok? Y N
  • 44. © Copyright LetsVenture.com | All rights reserved Others  Legal & Accounting Fees  Mostly all investors put the burden of the legal fees on the entrepreneur  No Shop  This prevents entrepreneurs from shopping around with other investors while the dialogue is on. Time period can range from a few weeks to a few months.  Due Diligence
  • 45. © Copyright LetsVenture.com | All rights reserved How do you start?
  • 46. © Copyright LetsVenture.com | All rights reserved Getting Started  Set aside a “forgettable” corpus  Make a portfolio of ~10 investments over 2-3 years and possibly ~20+ over 4-5 years  Lean on experienced angels to get started with  Invest in your area of expertise  Help the startup without being over bearing  Meet the founders, spend time with them
  • 47. © Copyright LetsVenture.com | All rights reserved Gradually work towards having your own Investment Thesis
  • 48. © Copyright LetsVenture.com | All rights reserved Investment Thesis  Your theory of investment  Examples  Product Companies with differentiation and potential to go global  Both niche & mass products / services startups with potential for emerging and developed markets  Invest in ventures which work towards bringing a change in the social sector
  • 49. © Copyright LetsVenture.com | All rights reserved Lead Investor  Typically an investor leads the team in a syndicate. A lead investor has the following major tasks  Setting up the terms of the deal  Help Build a syndicate  Possibly take a board seat and help run the company  Facilitate next round of funding
  • 50. © Copyright LetsVenture.com | All rights reserved Post Deal Management  Good to build a rhythm of a monthly review / quarterly report  Provide them help without being over bearing  Exercise patience when startup founders are not taking your suggestions  Open Doors
  • 51.
  • 52. © Copyright LetsVenture.com | All rights reserved Quick Tips  Get started by participating in syndicates  Network with experienced investors  Invest in the area of your expertise  Develop relationships with the entrepreneurs  Allocate corpus  When in doubt, do not invest!  In the end, go with your gut!