Angel Investor – a Real Angel to Budding Entrepreneur
It is inlikely that not too sundry sustain heard of Seraph endowing in India. For initiateers, the monies complicated are nowhither adjacent as great as in VC or PE endows. Nor are the companies themselves great. And most seraphs are severicular entrepreneurs themselves who sustain made it amiable. Particular secret endowors who endow in entrepreneurial companies are habitually and affectionately unconcealed as "seraph endowors".Generally, entrepreneurs sustain a repletion of high when they absence to breed chief, including - Separate savings, Friends and extraction, mortgages, Government grants, Asset organizeed loans, questionable clearityoring, banks, Institutional endowors (finished through endowment banks), leasing, VCs, IPOs, but hither is a new way out to the entrepreneurs to get financed, that is Seraph Investment.
Projects that are refused by VCs as life too imbecile for their portfolio would be improve off getting Seraph enduementing and straining the fit bigness to adband-arms VC, as these days VCs are unconstrained to finance vocation when it straines the step of at last „prototype? aking. This lore Nursing essay throws scanty on a very modern interrogativeness in India, designated Seraph endowing which is generally disconcerted exceeding a while VC enduementing, Angels are severiculars or knots who not singly endow but so adviser entrepreneurs. This Nursing essay so covers the provision by the entrepreneur to get the enduementing, gives notions environing stipulations on which to transact and so media to converge the seraphs. But entrepreneurs sustain to voice that, singly 1% to 2% of all vocation guiles teached to either seraphs or VCs hold enduementing.Entrepreneurs scarcity to interpret the expedient books and address to severiculars exceeding a while financing expertise so when the decline arises, they are liberally speedy to teach their concept to endowors. Inentire vocation guiles are disagreeable in today? s competitive environment. But it should so be voiced that seraphs constantly esteem initiate.
1 What is Seraph Investing? "I contemplate you can do vocation exceeding a whileout a VC but you cannot exceeding a whileout an Angel," manifest Amit Agarwala, instituter and CEO of Amdale Software Technologies, who breedd Seraph enduements in 2003 in India. What are Angels and why are they so expressive?Angels, at last in the profane import, are severiculars who endow era and specie in very present companies. In questionable clearity, they frequently endow in an entrepreneur at a purpose when the vocation exists singly as a amiable notion. Angels are severiculars who endow their own specie into initiate up companies. Usually seraphs so adviser the entrepreneurs in whose companies they are endowed. They use their own currency to endow in present step companies, and they fancy to capture an equity position in the assembly either straightway through the issuance of divides or instraightway through other instruments that are commensurate into divides.Angel endowors are so designated owing in the present 1900s monied severiculars supposing chief to aid embark new gesticulatory enormous.
As patrons of the arts, these endowors were thinked by theater functionals as “Angels. ” During the primal conversations exceeding a while an seraph knot and during the teachation to the seraphs, it confuses the entrepreneur to trial out which of the parts are the questionable clear secureness effectrs. This is unmanageable to furnish-out but can be very estimable notice owing seraphs are anthropological and they strain security in gum.The entrepreneur should continuesharp-end on the further conversant seraphs and the managing directors of the seraph knot. If knots of endowors are animated, it is far improve for them to endow as an LLC (scant impost Company) than as severiculars. VCs are harass of multifarious chiefization gains and an entrepreneur risks losing appropinquation to greatr equalitys of chief. In union, elder assembly secureness making can behove heavy if great gum of endowor/owners scarcity to be consulting.
Judgment an seraph endowor is love trialing a divider Separate chemistry is discriminating owing it is a crave promise alliance.This chemistry may capture era to institute so endow description era in getting to apprehend the seraph. If you are transacting exceeding a while a knot of seraphs, it is the wield seraph that surpass be on your consultation or that surpass wield the endowment on aid of others that should be your continuepoint. It is far improve in the crave run for an entrepreneur to decline down an seraph endowment owing of exceeding a whiledrawal of chemistry and continue for a improve tally. How do seraphs appreciate initiate ups? As they say, appearliness is in the eye of the appearer-on," Prapenetrating Gupta, Co-instituter of Indian Seraph Network, describes the appreciate of a initiateup.Valuing a non-existent assembly is unmanageable, if not unusable. However, thither are some admissiones for determining ownership percentage that appear dishonorable resisting Angels; milestones that Angels esteem as estimable; and unmistakable thinkations capturen into statement when negotiating.
Combined, these procure a initiateing purpose for the new entrepreneur to apprehend how thinkable of her assembly she may sustain to vend to breed Seraph enduements. Angels usually appear at these aspects: ? How thinkable appreciate has been generated to determination? How great can the assembly extend, and how thinkable unional chief surpass it capture to get there? ? Most expressively the entrepreneur and his team 2 Post-siege Involvement: Angels usually procure direction on vocation diplomacy and models; add entrepreneurs to experts and slight customers; and aid breed other enduements as required. Angels sustain a difference of severicular and functional tailgrounds Angels can add dreadful appreciate to initiateups. On the other emanationionman, seraphs are anthropologicals and are matter to their separate idiosyncrasies.One or further of these characterizations may engage to an seraph: Guardian seraph- This archearchepattern of endowor has pertinent assiduity expertise and surpass be erraticly complicated in aiding the initiateup expressioninate luck Operational seraph- This seraph has allude-toive trial as a elder adherent in elder corporations. For an entrepreneur, this archearchepattern of endowor can add thinkable appreciate owing he or she apprehends what the assembly scarcitys to do in enjoin to layer up operations. Entrepreneur seraph-An endowor that has “been there, performed that” is very estimable to a scholar entrepreneur.
For model, an entrepreneur can add perspective to the instituters on what to behold-for from endowors and how to effectively transact financing stipulations. Hands-off seraph-A monied doctor, counsel or homogeneous functional must continuesharp-end on his or her day-to-day classify. This archearchepattern of endowor is surpassing to endow but usually does not sustain the era or severicular expertise to be of thinkable aid to the initiateup. Control freak- Some endowors either respect they sustain all the answers owing they sustain expressioninated unmistakable opulence or they sustain the separateity to enlighten themselves they apprehend “everything. Caveat emptor. Why seraph endowor? Generally entrepreneurs sustain a repletion of high when they absence to breed chief, including Separate savings, Friends and extraction, mortgages, Government grants, Asset organizeed loans, questionable clearityoring, banks, Institutional endowors (finished through endowment banks), leasing, VCs, IPOs, but as a excellent high incompletest all, distinctly for a outburst entrepreneur, seraphs in India are frank the pre-eminence role. Triple Digit Crores PE Funds Double Digit Crores VC enduements Few Crores Seraph Investors Few Lakhs Friends & FamilySome studies allude-to that seraphs spinterpret out their endowments into sundry avenues and companies when compared to that of VCs and their book of endowments so sums up to 10 to 20 eras further than death.
Angels apobject a discriminating chief gap, betwixt “friends and extraction” and VCs. When a initiateup requires further than 25 Lakhs but hither than environing 5 crore, seraphs are a viable creator of chief. This smooth of enduementing is adown the radar palliate of most experiment chiefists, although some VCs surpass casually enduement a creator entire of as petty 5 crore. Hither is a proportionately con-balance of Angels and VCs Funding equalitys Motivation to endow Angels Rs. 25 lakh to 5 Crore Not exact redecline driven, impetuous affecting content (“bragging fits”, questionive benefits of coaching, classify from life complicated in unswerving strided initiateups) Fancy anonymity, strainable via attributerals or through seraph knots VCs Rs. 5 Crore and balance Mostly retaliate-driven exceeding a while adjustments for alliances exceeding a while other VCs and genius inentire entrepreneurs Accessibility Geographical continuesharp-end Key reasons to endowRegional Separate chemistry exceeding a while entrepreneur, minute trade resolution, sustainable competitive customs Hither than VC secures owing sustain the effeminacy of life extensive Relatively unswerving (one day to three weeks), stipulations are subordinately negotiable (further than exceeding a while VCs) Dishonorable or fancyred hoard, casually commensurate debit (debit commensurate to equity divides) 10% - 50% Relatively unswerving and scanty Lump sum or milestone Operational trial, dishonorable import direction, severicular assiduity expertise Enumerate of endowments Promise quibble issuance Siege vehicleHighly clear, usually surpass singly appear at vocation guiles attributered by their netproduction of contiguitys (attorneys, etc. ) Regional, notorious or interpolitical, depending on the secure Npresent questionable clear issue, unhindered occurrence, impetuous and conversant team, sustainable competitive customs Further than seraphs owing scarcity to effect a restriction enumerate of endowments in a attached year Can be unswerving, but usually is at a dispassionate stride (separate weeks), stipulations are fairly exemplar and not very negotiable Preferred hoard (commensurate to dishonorable) Equity percentage Due assiduity Funding rule Crave promise appreciate borrowed Reaction to bad intelligenceTarget egress era Target IRR retaliates 20% or further Relatively lazy and systematical Lump sum or milestone Trial in managing extendth, penetrating pockets, networks of unional creators of chief, rolodex, trial in managing IPOs and sale egresss Roll up the sleeves and aid Intense despatch and unfold the in, notorious up coaching; notorious up rolodex; aid rolodex gain articulation experiments, new financing entires or mergers; courage wieldment 5 to 7 years 3 to 5 years 15% to 25% 20% to 40% 4 How to converge an Angel? Angels are severiculars endowing on their own aid - they are not acting as sever of endowment companies, and they don't publish.
It's fairly high, for precedence, to go to a convergeing, and sustain someone continue up and cry-out, "Over hither! I'm an Angel! " Not singly that, but Seraph endowing is a new interrogativeness in India, so thither simply aren't as sundry Angels aentire as in Silicon Valley, for model. This poses a question for new entrepreneurs: how does one trial and converge a slight Seraph endowor? Is it luck? It may appear love a blissful surroundings, when one hears the stories. Sridar Iyengar, an erratic Seraph in twain the US and India, sat minute to Vani Kola at a dinner, exact when she was initiateing „RightWorks? organizeed on that haphazard of convergeing, he became one of her Seraph endowor. Tripat Preet Singh, a present Seraph of five companies, and now at NEA Indo-US Partners, happened to converge one of his entrepreneurs in a friend's employment. 3 ways to trial an Seraph ? Ask entireone you apprehend ? Lore - and then unimpassioned allure. It does emanationion. ? Effect use of existing forums What's the best provision to tempt Angels? Once you sustain authorized your Angel, how should you impartial to sustain the best haphazard of interesting him or her? Still an notion is ok Angels, by restriction, endow at the original step.
They do not behold-for popular vocationes, liberal vocation guiles, or smooth set vocation models. In questionable clearity, for an entrepreneur, emanationioning exceeding a while an Seraph to constitute the vocation can be sever of the endowment rule. Sridar Iyengar, an erratic Seraph endowor in twain Silicon Valley and India divided his perspective, "If I sustain been sever of that rule, then in-fact I sustain some bark in the play. I absence it to surpass. And it's easier to put the specie in. " According to Angels, some basic questions that entrepreneurs scarcity to sustain intention through grasp: ?What is the in, the 'pain purpose' you are addressing? ? Who and whither are the target customers and how do you strain them? ? At what expense purpose would someone be surpassing to use this issue or employment? ? Why do you contemplate your team surpass surpass - severicularly if thither is no constituteer entrepreneurial or assiduity trial? ? Who is the two-of-a-trade, and why do you sustain an custom? Palpable validation If you absence to enlighten an Angel, it aids to sustain enlightend other mass acrave the way. Obtaining palpable validation - instituteing respectrs - is a key to proving the notion has desert.
The principal unnaturalness is to try to get colossus who has creditability in that area, to respect in the notion," says an seraph endowor The final validation, of classify, comes from having a customer - someone in-fact surpassing to pay for your issue or employment. At such an present step, so-far, that may not be slight. In which question, thither is appreciate in having a customer behove a respectr in your efforts. Evaluation of vocation guiles uses separate parameters Too sundry entrepreneurs proviso their opportunities by congeniality imbecile vocation guiles.Great notions are dishonorable; thinkable highr are vocationes exceeding a while the mass and issues to penetrate a trade and 5 capture divide or enjoin. Singly 1 % to 2% of all vocation guiles teached to seraphs or VCs hold enduementing. Investors attribute to the valuation of a assembly constituteer to receiving a entire of endowment as “premoney.
” Once enduementing occurs, at that minute, the appreciate of the assembly rises by the equality of enduementing and the “post-money” appreciate is attached If a initiateup has no revenues, then valuation is matter to thinkable haggling and relies further on dishonorable practices of seraph and experiment chief endowors.A “hot” assembly exceeding a while questionables or competitive customs and slight for hundreds of pets of dollars in sales surpass unmistakablely enjoin a greatr appreciate than one exceeding a while tens of pets in slight sales, but impenetrable rules are unmanageable to organize in the endowing assiduity Exits Angels scarcity to teach a smooth of resignation exceeding a while their endowments and apprehend that they surpass not lovely identify a redecline for a enumerate of years. Seraph endowments are usually illiquid until some constitute of an egress diplomacy is industrious.The instituters should grasp their egress diplomacy in the assembly? s vocation guile, and it should be agreed upon betwixt the entrepreneurs and the endowors. Although trade stipulations may creator the egress diplomacy to exchange, endowors absence to apprehend the guile as courteous-behaved-behaved as the era gain for harvesting their endowment. The subjoined schedule details some of the most dishonorable harvesting classifys: ? Strategic Sale: The assembly is sold, frequently to another assiduity player. ? Primal Public Offering: While this classify can be remunerative, it can be a very unmanageable egress classify to entire.
Thither are crowded rules and requirements complicated exceeding a while an IPO, and it is very era-consuming. ? Partial Sale: The endowor vends his scapture in the assembly tail to wieldment or to another surpassing buyer. ? Bankruptcy: If the assembly is not luckful, it can commend delaydrawal, either restructuring its operations or going out of vocation altogether. Seraph endowment gets a leg up in India Indian Angels Netproduction A constituteal familiarity of severiculars who surpass palliate transacts concertedly, and may co-endow in a assembly.Not all Angels in a netproduction surpass endow in a transact - it's an severicular secureness. Indian Seraph Netproduction and Mumbai Angels, two knots of present step endowors, are on a band-arms to convey seraph enduement humanization - the rule of nurturing new companies to the minute smooth, whither they could abundantly tempt experiment chief endowments - in India. The two knots organizeed in Delhi and Mumbai, respectively, trust to effect seraph enduementing further erratic hither in hence years, riding on their luckful endowments in the departed, albeit in their severicular accommodation.
For precedence, Infinity Ventures, an present step experiment chief enduement promoted by endowors such as Saurabh Srivastava (who is now exceeding a while Indian Seraph Network), had endowed in some of today's luckful companies such as Avendus Advisors, an endowment bank oblation secret equity syndication, M&A, urban proceeds, gaind finance, proper situations and strategic advisory employments to municipal houses and endowors. Indiabulls, a wielding financial employments and questionable clear possessions bud assembly and India Games, one of the elder gaming companies in India.So far, IAN has endowed in ssmooth companies which grasps San Shadow Consultants, a secure that aids companies generate subjective possessions fits or a questionable portfolio, Knowcross, an IT consulting secure and Authorgen, a secure that procures e-learning software issues and employments. It has so made one egress acrave exceeding a while Mumbai Angels in Madhouse, a DVD rental assembly, which was later assumed by Seventymm. 6 IAN's netproduction has extendn to 60 parts and now grasps institutions such asGoogle, IBM, Punjab Experiment Capital, Sidbi Experiment Capital, Naukri. com and Greylock Partners. Mumbai Angels so guiles to unfold its 25 part team to 100 parts in the minute 2 years.
IAN has operations in Delhi, Bangalore and Mumbai seeing Mumbai Angels are exact operational in Mumbai itself. Indian Innovators familiarity The itransact seraph is someone who is a lifeoccasion afront in creating appreciate in the assiduity. They'll procure financial chief as courteous-behaved-behaved as subjective chief, which could be smooth further expressive than the specie.The draw in India is incongruous - Angels are impenetrable to trial. To convey Seraph Investors and Innovators concertedly, Indian Innovators Familiarity made arrangements exceeding a while selected Angels to study the Vocation Plans of Indian Innovators. Innovators appearing for seraph endowment may contiguity the familiarity exceeding a while an adherent analysis of their vocation guile. Minute guiles can be submitted to the animated Seraph exceeding the antecedent criterion.
Band of Angels in Delhi Band Of Angels notorioused stock in Delhi.Started in April 2006, the Band of Angels is a rare concept which conveys concertedly greatly luckful entrepreneurs and CEOs from India and aentire the cosmos-people who are animated in endowing in initiate up / present step experiments which sustain the slight of creating disproportionate appreciate. The Band appears at a extensive spectrum for endowments : ? IT issues & employments - High end BPO / KPO ? Retail - Biotech & Pharma ? Internet - Media & Entertainment ?Leading cause technology in telecom & embedded domains The Band appears at endowing typically up to USD 100,000 to USD 1 pet and egressing balance a 3 to 5 year limit through an IPO, M&A or strategic sale. The Band may think endowments balance a pet dollars but is lovely to do so through syndication. web page : http://www. boaindia. com/ A few other seraph endowors in India ? ? ? ? Chennai Bombardment www.
chennai. tie. org Indian Angels Netproduction New Delhi 110 065 [email protected] com Mumbai Angels Vimmla, www. mumbaiangels. com TiE Entrepreneurship http://www. bangalore.
tie. rg creator: www. nenonline. org Conclusion You Too Can Trial an Seraph - Institute Your Pipeline The best way to creator an endowor seraph is through attributerals. You scarcity to be begind by a approvely creator. Netlaunched is a legend which emanationions and is distinctly expressive when you strive an seraph endowor. Netlaunched is impenetrable emanationion; it requires era, disembodiment and thrive up.
Do not behold-for netlaunched to pay dividends directly. It is a crave drag so be speedy. It is not unconstrained to trial seraphs. Most of them appreciate their seclusion and do not absence to be admissioned by entire special who is appearing for enduements.Knowing the fit special is the key to getting an presentation to an seraph endowor. 7 You should try to converge as sundry vocation owners as slight. Sundry of these vocation owners may be or may absence to be seraph endowors.
Alternatively, these vocation owners may be surpassing to attribute you to endowors who they apprehend. Another way to get an presentation is to add exceeding a while your statementant, advocate, banker, customers, employees, doctor, dentist, consultants, or your confessor at a topical university, distinctly one that properizes in entrepreneurship.In enjoin to trial specie you may scarcity to be aggressive; for model, think allureing the CEO of a assembly that is homogeneous to yours, but not a adversary, and see if you can get the CEO to begin you to a slight seraph or someone who strength apprehend seraphs. If you converge any experiment chiefists, sustain in handle exceeding a while them smooth if they are incompetent to endow in the assembly. Some of them sustain contiguitys exceeding a while seraphs. By the similar indication, you should fertilize contiguitys exceeding a while endowment bankers and other intermediaries as they so frequently sustain contiguitys exceeding a while seraphs. Thither is Trust It is refractory trialing seraph endowors.
Thither is a impetuous understanding that thither is seraph specie continueing to be endowed but the conduit is not as questionable clear in India as it should be in enjoin to tally entrepreneurs exceeding a while seraphs. The amiable intelligence is that it appears love further topical resources surpass be questionable clear in the coming to aid convey entrepreneurs and seraphs concertedly. 8 Appendices: ? Bibliography ? Typical seraph questionnaire ? Reading/sufing Appendix 1 – Bibliography ? ? ? ? ? ? ? Winning Angels: David Amis and Howard Stevenson, Prentice Hall, 2001 Vocation week-Dec ‘07 DARE-Entrepreneurship magazine-Dec07,Jan 08. http://www. imbecilebusinessnotes. 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 Chief From Angels: How Their Specie and Their Trial Can Aid You Institute a Lucky Company, New York, John Wiley ; Sons, 2002 Simmons, Cal and May, John, Entire Vocation Needs an Angel: Getting the Specie You Scarcity to Effect Your Assembly Grow, Washington DC: Crown Business, 2001.Williams, Kelly, Launched exceeding a while Seraph Investors for Community Development, New York: Community Bud Experiment Chief Alliance, 2003. http://www. infinityventure.
com http://www. strategicinvestment. blogspot. com http://www. podtech. com http://www. thealarmclock.
com http://www. enduementingpost. com http://www. seraph-investor-guide. com http://www. inc. com Appendix 3 - Typical Antecedent Questionnaire From Seraph Groups To Entrepreneurs • Spectry of assembly • Year founded and juridical gain (“C” Corp, “S” Corp, LLC, etc.
) • Who attributered you to this seraph knot? Analysis of vocation (in 3 sentences or hither) • What in is your issue or employment solving? • What is the bigness of the trade, how thinkable has it extendn in the departed few years, and what is its designed extendth? • Describe the two-of-a-trade (companies as courteous-behaved-behaved as commute issues) • What are your assembly? s competitive customs? • Why surpass your assembly surpass in the crave run? • Does the assembly or its instituters sustain any pertinent questionables or proprietary technologies? (gladden do not divulge severicular proprietary notice) • What is the pertinent trial of each part of the wieldment team?Please environ a one page renew of the CEO. • What is the assembly? s sales and tradeing diplomacy? • If you sustain a website, what is the URL? • What are the elder scanty, moderation and crave class operational milestones you purpose to expressioninate? • Gladden entire the board adown: • Are 50% or further of revenues generated from one or two customers? • What are the 3 principal risks of this experiment? • What is your chiefization gain? (How sundry divides are currently owned by instituters and endowors? How thinkable chief has been endowed so far, and by whom? • How thinkable chief are you striveing, and how surpass this chief be used? • How sundry entires of endowment and what equalitys do you behold-for to scarcity in completion? • What is your egress diplomacy? • Gladden schedule the spectry and assembly of your functional advisors (attorney, CPA, and/or consultant): • Who is the ocean contiguity special at the assembly? Gladden procure address, telephone, movable phone, and fax