LV Insights

Myths of Angel Investing

June 2012: I met an entrepreneur friend, with a brilliant idea, validation already done and a frenzy passion to make it big. I loved her idea and the belief – Anyone who met her would know the idea was different and would easily attract angel money. She raised her angel round…

June 2012: I met an entrepreneur friend, with a brilliant idea, validation already done and a frenzy passion to make it big. I loved her idea and the belief – Anyone who met her would know the idea was different and would easily attract angel money. She raised her angel round – in the process spent 5 months traveling, meeting different investors, took introductions and followed through the maze of angel networks, pitched individually to 61 investors and closed her round in 6 months.All of this was done offline. Being early stage and building the business and raising angel money, 6 months was a 24/7 work cycle for the entrepreneur – with everything else in life on hold. For an entrepreneur who has raised angel money this will sound familiar. Fast forward Oct 2013: I met an entrepreneur – brilliant, passionate and determined to build a successful company. The customer traction and validation was in progress and you could see the doggedly approach of the entrepreneur in closing new deals. There was fierce conviction that this was a nascent market that would yield high returns. LetsVenture was in private beta and we were given the opportunity to work with the entrepreneur. The startup had an existing investor willing to commit – a non tech, non ecosystem investor who believed there was huge value he could bring along with the money. At LetsVenture, this was an opportunity to validate some of our platform assumptions. Syndicate opened on the platform on 31st Oct. 8 investors, 5 phone calls, and 3 face meetings. Entrepreneur was on the phone without the lead investor, always. All investors are tech-savvy, will bring in smart money and geographically distributed – from Singapore, US and India. Funding closed in 2 months and 10 days! My key takeaway: Startup Funding Made Easy!

Based on what I have seen in the last 1 year from our learning at LetsVenture, I have tried to capture what worked, what assumptions were validated and myths that were busted. One can argue this could an outlier but I firmly believe that trends are defined by such use cases. There are lot of open questions – we will continue to find answers as we go along. For now lets take a moment to reflect on some key insights:

What worked well and our Key Takeaways:

1. The founder spent time creating a powerful, compelling video – which we believe really made the difference in convincing remote investors! Imagine being able to talk to hundreds of investors in the comfort of your desk and convey your conviction on why they should be part of the journey. 2. Take time to create a Compelling Investor deck that explains everything clearly. Investors are intelligent and smart – they understand when they see a well thought through deck. Don’t make assumptions and don’t be vague. Review, listen to feedback and improvise – again, again and again. There is never a perfect deck, so continue to update the deck online. Stay current. 3. Acknowledge an investor who shows interest. You can never be too busy for an interested investor – so be responsive and keep the engagement active. Feedback online is quick, so it helps gauge genuineness. 4. Believe, Believe and Believe – there are companies which have been bootstrapped and made successful without angel money. If not investors, you might find experts willing to support and angel willing to work with you before he finally bets the green currency.

Myths we busted:

Myth 1: Credible founders and good startups wont come online to fund raise. Reality: Bluegape is a well known startup and Sahil a passionate entrepreneur with a solid tech background. Myth 2: Indian Entrepreneurs are worried their idea will be stolen if they create their profile online. Reality:  We have 285 startups till date on our platform, with at least 10 joining at an average every week. Startup founders have complete control on privacy for sensitive information. Myth 3: Investors need to talk to the lead investor before deciding. Reality: Sahil closed all the discussions by himself, with his startup profile updated on the platform. Myth 4: Investors take time to decide and want to meet f2f before deciding to commit. Reality: One of our investors discovered, connected and decided to commit within 12 hours. Myth 5: Investors don’t spend time looking at startups online. Reality: We see investors actively engaging with startups, and scheduling meting requests. Data analytics does show a high engagement beginning to happen online with some leading to commitments.

Questions that remain to be answered:

  1. Is the HNI community the new disruptor of the Indian startup ecosystem?
  2. Can angel investing create a bigger disruption?
  3. Can we democratize startup funding, making it accessible to a larger community, and create a connected map?

At LetsVenture we don’t have all the answers, only a belief that we want to create change and impact the ecosystem positively. We will find the answers as we go along, listen to the market, learn and continue to improvise. In the meanwhile let’s celebrate for BlueGape and wish them the best to build the company of their dreams! It’s a new year, with new trends to be created!


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