Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Utsav Somani was recorded in May 2018.
Utsav Somani, Angel Investor at AngelList India, talks about the newly launched AngelList India.
Sramana Mitra: Tell us about the investing focus of AngelList in India. How are you operating? How is it structured? How is it different from the mother ship?
Utsav Somani: AngelList started off as a blog for giving advice to entrepreneurs. Then in 2010, it morphed into AngelList. If started off, as most startups do, with an email list. They started sharing interesting startups with a small group of angels who would help these companies raise funds.
That evolved as they lobbied with SEC to get online fundraising approved. That allowed accredited investors to participate in these private fundraisers in the US. In 2013, we started investing online. AngelList pioneered Syndicates in the world. Syndicates is a very unique structure where angels can pool capital behind a single lead who has identified an opportunity and shared an allocation with their backer.
By sharing an allocation, he’s able to earn a carry-on back. We pool capital in one single entity for the cap table of the startup. Any angel investing scenario has three pieces. The entrepreneur, backer, and leads. By giving a single check and not having them limit multiple investors, backers get access to the best deals. Leads, who have good judgment and access to deals, earn a carry-on back.
We’re in 2018. I think 2,000 startups have been funded through the AngelList platform globally. I joined AngelList India in 2016. We had to lobby with the SEC equivalent of India. It took us one and a half years to get this going. We launched in January 2018. India is a very exciting geography. It’s getting the attention in the world. We’re growing really fast with all the foreign capital. AngelList is really excited to be helping this mission grow and get quality companies funded.
Sramana Mitra: We’re very familiar with the syndicates model in the US. How many syndicates have been set up in the Indian context in the last four months?
Utsav Somani: We have 20 syndicate leads. Out of that, five of them have done one deal or more on the platform. We’ve closed 10 transactions. Only one has been announced. The first one was a Blockchain company, which we syndicated in January. It was a round led by Matrix. For all 10 deals, we’ve shared cap tables with all the best funds.
We’ve done a lot of quality deals. These are deals which you wouldn’t see on any other platform or offline network. In India, we have these offline angel network who started working as glorified investment banks. They’re more aligned to a venture model than to an angel network model. That’s where AngelList is truly trying to do something unique for the Indian ecosystem.
It took us one and a half years to lobby with the regulators. I think the leads are also enjoying this. It’s been three and a half months. I think we’ll activate a lot more new leads and a lot more newer folks to back these leads.