Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Swati Chaturvedi was recorded in August 2017.
Swati Chaturvedi is Co-founder and CEO at Propel(x), an online platform where entrepreneurs are connected to angels. Swati and I discussed some of the key trends of the seed financing eco-system as viewed from Propel(x).
Sramana Mitra: Tell us about Propel(x).
Swati Chaturvedi: Propel(x) is an investment marketplace where we connect startups with accredited investors. Our goal is to help startups raise funding online. It’s really difficult for startups to raise funding especially in the early stages. Our goal is to help there. We focus quite exclusively on deep technology companies.
These are companies that are founded on a scientific discovery or meaningful engineering innovation. It spans many sectors including energy and green technology. Information technology is a very big sector for us.
The way it works is startups can register on Propel(x). We do have a screening process whereby we make sure that the startup is ready to raise funds. Then they are published on Propel(x).
On the other hand, we have hundreds of investors that have registered in Propel(x). They are accredited investors. Their goal is to discover exciting new companies that they want to support. We do screen all investors as well. Investors, once they’re in, can review the startup materials. If they’re interested, they can indicate an investment interest.
Sramana Mitra: Let’s zero in on some things that are going to be helpful for our community. First and foremost, you talked about screening. What are you screening? What does a startup need to have to pass your screening test?
Swati Chaturvedi: There’re a lot of platforms out there and everyone has a different philosophy. At Propel(x), we focus on companies that are founded on meaningful innovations. The number one screening criterion for us what is your particular innovation. We have a lot of in-house expertise in all of these areas. We do dig quite deeply into your innovation. We compare it to what you’ve seen before, what is already on the table, and what you built on top of that.
Second, is we do need the team to be full-time. The CEO absolutely needs to be full-time. Because we are not a broker, we are not allowed to negotiate terms. We do require that the startup come in with at least one investor who’s already negotiated terms in the current round. They may have invited a small amount and that’s okay. Our requirement is this one investor be not related to the entrepreneur. Those are our three criteria.
Sramana Mitra: Within information technology, what are the trends that you see in terms of where you see innovation? In our world, we see AI everywhere. All investors want AI. I’m a bit sick of it actually right now. What are you seeing in your community?
Swati Chaturvedi: You’re absolutely right. The buzzword today is AI. We are very careful. It’s not just okay to say, “We are an AI company.” We screen for your particular innovation. Data analytics is what most of AI is built on. Those things already exist. We are very keen that if you are using artificial intelligence, it should either be highly specialized. For example, we’ve had a company that uses artificial intelligence to select therapies for cancer patients. They’re highly specialized.
We have companies that are using artificial intelligence to map indoor spaces. We were skeptical on that, but we had a long conversation. We came to the conclusion that this, in fact, is innovative. We also had a company that helped interior decorators select the best fixtures. That was not a good fit for us. They’re looking at some machine vision, scanning a lot of data that exists out there, and then understanding what would be the good fit for you. I didn’t think that was truly innovative just because those kinds of things have existed for a long time. That’s the kind of trend we see. Yes, AI is everywhere.