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Seed Capital From Angel Investors: Padmaja Ruparel, President, Indian Angel Network (Part 9)

By guest authors Irina Patterson and Candice Arnold

Irina: And how is your network organized?

Padmaja: We were very entrepreneurial in how we started. I don’t think there was much thinking at that time. We didn’t realize it would be so big, to be honest. So, we just started with a private, limited company which is for more administrative purposes, just so that payments can be taken in and expenses can be pushed out. >>>

Seed Capital From Angel Investors: Padmaja Ruparel, President, Indian Angel Network (Part 8)

By guest authors Irina Patterson and Candice Arnold

Irina: If you could give one piece advice to angels about how to become more successful, what would your advice be?

Padmaja: That’s a tall order. I must first say this with a bit of a rider. Angel investing in India is very young. It’s not as old as what is happening in the United States or the United Kingdom. So, keeping that in mind, I think per se, angel investing is a new phenomenon for people here. There are very few angels invested in the true sense. So, one thing that does happen – because the VC industry is a decade and a half or more older – the VC lens is sometimes used more than the angel lens.

If you’re a VC coming in with let’s say a $5 million to $10 million investment, you’re obviously looking at a company that’s got a history, that’s got some traction, that’s got some success. So, a VC would invest, looking at the past, and also taking a punt on the future. On the other hand, if you go to a bank that is giving a debt, or any debt financing agency for that matter, it largely looks at the past of the company. >>>

Seed Capital From Angel Investors: Padmaja Ruparel, President, Indian Angel Network (Part 7)

By guest authors Irina Patterson and Candice Arnold

Padmaja: As another example, there is an entrepreneur who’s doing 46% net profit, and we give him honest feedback: Don’t share equity. You don’t need to. He needs working capital, so we told him we put you on to people who give debt. Maybe that’s a cheaper way for you. Why do you want to share equity? >>>

Seed Capital From Angel Investors: Padmaja Ruparel, President, Indian Angel Network (Part 6)

By guest authors Irina Patterson and Candice Arnold

Irina: Do entrepreneurs have to have previous senior executive experience?

Padmaja: No. They need to have two things. One is an understanding of the domain, and the other is a bit of a complementary skills within the team. You don’t want to be investing only in a “CTO,” because he or she may be able to produce the best technology but who’s going to take it to the market, commercialize it, and create the revenue line? There is a bit of the complementarity that we look for. >>>

Seed Capital From Angel Investors: Padmaja Ruparel, President, Indian Angel Network (Part 5)

By guest authors Irina Patterson and Candice Arnold

Irina: How many investments have you made in the past 12 months?

Padmaja: Within the past 12 months we would have done five.

Irina: And how much do you usually invest per deal?

Padmaja: We’re touching $400,000 to $500,000 per investment. >>>

Seed Capital From Angel Investors: Padmaja Ruparel, President, Indian Angel Network (Part 4)

By guest authors Irina Patterson and Candice Arnold

Padmaja: There are other entrepreneurs whose plans we look at and play the devil’s advocate, punch some holes, and have the entrepreneurs really improve their presentations and really make them more investable. Or make them more palatable to investors. We make them think through their numbers, operations, and even valuations, which can really be over the top. >>>

Seed Capital From Angel Investors: Padmaja Ruparel, President, Indian Angel Network (Part 3)

By guest authors Irina Patterson and Candice Arnold

Irina: How many investments resulted from that competition?

Padmaja: This whole program was really to inspire entrepreneurship in the country. A large number of them benefited from the mentoring. In fact, every single person who was declined was given specific feedback as to why he or she was declined, and given suggestions, and relevant connections were made; that is, relevant investors and debt financing organizations were introduced. In short, we did all what we could help with. >>>

Seed Capital From Angel Investors: Padmaja Ruparel, President, Indian Angel Network (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: What are your current sources of deal flow?

Padmaja: There are various sources. One is, of course, our own members. For each of them, if you look at our website and go through the profiles of our investors, you can see that they themselves are brands in their own right. So, a lot of entrepreneurs connect with them and send them their plans and, therefore, they send it on because they basically joined the network to help reduce risks, leverage collective domain expertise, and participate in the co-investment process. One source of deals is clearly the members themselves. >>>