How to find the right Angel Investor in India
Start-ups require funding at various stages of their growth. They may need initial funding at the seed stage for go-to-market and later for development of new products, hiring resources, marketing and sales expansion.
The most common funding for these stages is through angel investments.
Before we look at how start-ups can find the right angel investors, let’s take a quick look at some of the other funding options available.
Bootstrapping/Self-funded – Start-up Founders use their own financial resources or receive financial assistance from their families and friends.
Crowdfunding – Founders raise relatively small amounts from a large number of individuals or institutions. It is typically done online.
Venture Capitalists – Individual or Institutional investors who invest in start-ups at various stages of growth.
Angel Investors – High net worth individuals or institutions who invest their own money into start-ups. They typically invest in early-stage start-ups which is inherently risky.
How to find the right angel investors in India
Angel investors can either be individuals or Angel Groups. They could invest once or in a series of rounds. In return, they get ownership equity or convertible notes.
These tips will help you find the right angel investor for your start-up in India:
Do your research
There is a vast pool of information online on start-up investments. Conducting research is a great way to learn about which angel investors to approach for funding. Make a list of all the angel investors in India who are relevant to your industry.
You need to have a business plan ready for them in the form of a pitch deck. You can email this to a set of relevant individual angel investors or angel groups in India.
Consider your start-up’s niche
Studying who has invested in your start-up’s domain over the years will be helpful.
There may be angel investors in larger angel groups that are unrelated to your start-up’s domain but may be willing to invest in the same.
However, most individual angel investors in India tend to invest only in industries that they have vast knowledge and experience in.
Individual Angel Investors who know how a specific industry works will be less averse to investing in the sector as they not only know how to help expand and grow the business but they also know the risks involved.
Get involved in your local business community. Find out who can refer you to an angel investor. Many business owners can either help you find angel investors or are angel investors themselves.
You can join trade, social or business organizations. Ensure you participate in their events and meetings. You can also join business mentorship groups that have direct access to investors. Stay active in these groups and expand your network as much as you can. Don’t forget to create a profile on online angel investment networks, forums and lists.
Build a great portfolio; highlight your successes
Highlighting the success of your past ventures will help build trust among angel investors. Angel investors prefer to invest in Founders who have a proven track record.
Your past performances will help them believe you are capable of doing the right thing with the capital invested.
Be pitch ready
Investors who find your pitch interesting will set up a longer meeting for you to explain your business plan to them in depth.
Having a great pitch goes a long way in creating a positive impact. Founders who pitch to angel investors should be knowledgeable about the business, financial and legal aspects related to their start-up.
Angel investors typically want to know the composition of the Founders, criticality of the problem being solved, how unique is the planned solution, whether the solution is scalable, leveraging technology, go-to-market strategy, unit economics, sales traction achieved, financial projections, extent of dilution, pre-money valuation, the fund ask etc.
A Founder who can spontaneously answer such questions, with confidence, is more likely to secure funding. It is extremely important to be thorough and honest when pitching to angel investors.
Be consistent & confident
It is rare for a start-up Founder to acquire funding on the very first try. It is important to be persistent and stay confident. If you are turned down by an Angel Investor, try receiving feedback from them. Find out what you are doing wrong and if you need to reposition your strategy. Try to learn from your mistakes.
If your start-up is headed in the right direction, with potential to scale up in the future, you will eventually find the right Angel Investor for your start-up.
The Chennai Angels (TCA) is one of India’s leading Angel Network Groups. TCA’s group of Investors come from varied industrial background and do not limit their investments to any specific sector(s). TCA has alliances with other Angel Networks to co-invest jointly whenever the funding requirement is large.
To apply for angel funding in India with The Chennai Angels, you can visit the TCA Platform and submit your pitch deck.