Angel Investor – a Real Angel to Budding Entrepreneur

It is inlikely that not too multifarious enjoy heard of Seraph endueing in India. For beginers, the monies complicated are nowclose adjacent as liberal as in VC or PE endues. Nor are the companies themselves liberal. And most seraphs are single entrepreneurs themselves who enjoy made it cheerful. Single peculiar endueors who endue in entrepreneurial companies are regularly and affectionately notorious as "seraph endueors".Generally, entrepreneurs enjoy a plethora of cherished when they scantiness to foster pertinent, including - Single savings, Friends and race, mortgages, Government grants, Asset domiciled loans, truetyoring, banks, Institutional endueors (stereotyped through enduement banks), leasing, VCs, IPOs, but close is a new way out to the entrepreneurs to get financed, that is Seraph Investment. Projects that are refused by VCs as nature too trivial for their portfolio would be rectify off getting Seraph endowmenting and grasping the fit greatness to appropinquation VC, as these days VCs are opportune to finance duty when it graspes the mark of at meanest „prototype? aking. This scrutiny Nursing essay throws ssimponderous on a very new lion in India, designated Seraph endueing which is generally promiscuous behind a while VC endowmenting, Angels are singles or enjoins who not merely endue but so adviser entrepreneurs. This Nursing essay so covers the making-ready by the entrepreneur to get the endowmenting, gives materials environing conditions on which to bargain and so instrument to encounter the seraphs. But entrepreneurs enjoy to hush that, merely 1% to 2% of all duty contemplations fetch-ined to either seraphs or VCs hold endowmenting.Entrepreneurs scantiness to peruse the essential books and express to singles behind a while financing expertise so when the convenience arises, they are greatly disposed to fetch-in their concept to endueors. Insum duty contemplations are unacceptable in today? s competitive environment. But it should so be hushd that seraphs constantly rate begin. 1 What is Seraph Investing? "I appreciate you can do duty behind a whileout a VC but you cannot behind a whileout an Angel," nominal Amit Agarwala, contemplationter and CEO of Amdale Software Technologies, who fosterd Seraph endowments in 2003 in India. What are Angels and why are they so pertinent?Angels, at meanest in the unmonastic appreciation, are singles who endue sgait and currency in very pubescent companies. In truety, they frequently endue in an entrepreneur at a aim when the duty exists merely as a cheerful material. Angels are singles who endue their own currency into begin up companies. Usually seraphs so adviser the entrepreneurs in whose companies they are endueed. They use their own consummate to endue in coming mark companies, and they further to siege an equity true in the fraternity either quickly through the issuance of divides or inquickly through other instruments that are identical into divides.Angel endueors are so fast consequently in the coming 1900s monied singles supposing pertinent to aid engreat new meretricious enormous. As patrons of the arts, these endueors were revolveed by theater functionals as “Angels. ” During the judicious conversations behind a while an seraph enjoin and during the fetch-ination to the seraphs, it confuses the entrepreneur to trial out which of the constituents are the ambiguous clear attachedness mouldrs. This is arduous to perceive-out but can be very precious counsel consequently seraphs are cosmical and they affect insurance in quantity.The entrepreneur should convergence on the balance familiar seraphs and the managing directors of the seraph enjoin. If enjoins of endueors are spirited, it is far rectify for them to endue as an LLC (poor obligation Company) than as singles. VCs are exhaust of complicated pertinentization edifices and an entrepreneur risks losing appropinquation to liberalr wholes of pertinent. In union, surpassing fraternity attachedness making can grace cumbrous if liberal quantity of endueor/owners scantiness to be consulting. Sentence an seraph endueor is relish trialing a divider Single chemistry is accurate consequently it is a hanker enjoin intercommunity.This chemistry may siege sgait to construct so endue nature sgait in getting to perceive the seraph. If you are bargaining behind a while a enjoin of seraphs, it is the administer seraph that obtain be on your revolveation or that obtain direct the enduement on habit of others that should be your convergence. It is far rectify in the hanker run for an entrepreneur to deflect down an seraph enduement consequently of failure of chemistry and continue for a rectify companion. How do seraphs rate begin ups? As they say, loveliness is in the eye of the spectator," Pramysterious Gupta, Co-planter of Indian Seraph Network, describes the rate of a beginup.Valuing a non-existent fraternity is arduous, if not impracticable. However, tclose are some appropinquationes for determining holding percentage that appear beggarly opposite Angels; milestones that Angels notice as precious; and true revolveations siegen into statement when negotiating. Combined, these supply a begining aim for the new entrepreneur to perceive how abundant of her fraternity she may enjoy to retail to foster Seraph endowments. Angels usually observe at these aspects: ? How abundant rate has been inventd to duration? How liberal can the fraternity increase, and how abundant unional pertinent obtain it siege to get there? ? Most pertinently the entrepreneur and his team 2 Post-cannonade Involvement: Angels usually supply direction on duty superintendence and models; associate entrepreneurs to experts and virtual customers; and aid foster other endowments as required. Angels enjoy a difference of single and functional endgrounds Angels can add fearful rate to beginups. On the other artisan, seraphs are cosmicals and are material to their single idiosyncrasies.One or balance of these characterizations may dedicate to an seraph: Guardian seraph- This model of endueor has pertinent toil expertise and obtain be freely complicated in aiding the beginup sum prosperity Operational seraph- This seraph has telling trial as a surpassing supporter in surpassing corporations. For an entrepreneur, this model of endueor can add abundant rate consequently he or she perceives what the fraternity scantinesss to do in enjoin to flake up operations. Entrepreneur seraph-An endueor that has “been there, performed that” is very precious to a ward entrepreneur. For copy, an entrepreneur can add perspective to the contemplationters on what to forebode from endueors and how to effectively transact financing conditions. Hands-off seraph-A monied master, counsellor or harmonious functional must convergence on his or her day-to-day certainty. This model of endueor is obtaining to endue but usually does not enjoy the sgait or restricted expertise to be of abundant aid to the beginup. Control freak- Some endueors either appreciate they enjoy all the answers consequently they enjoy sumd true plenty or they enjoy the singleity to inoculate themselves they perceive “everything. Caveat emptor. Why seraph endueor? Generally entrepreneurs enjoy a plethora of cherished when they scantiness to foster pertinent, including Single savings, Friends and race, mortgages, Government grants, Asset domiciled loans, truetyoring, banks, Institutional endueors (stereotyped through enduement banks), leasing, VCs, IPOs, but as a surpassing cherished unmouldedst all, specially for a crystallization entrepreneur, seraphs in India are liberal the guidance role. Triple Digit Crores PE Funds Double Digit Crores VC endowments Few Crores Seraph Investors Few Lakhs Friends & FamilySome studies recommend that seraphs spperuse out their enduements into multifarious avenues and companies when compared to that of VCs and their book of enduements so sums up to 10 to 20 spaces balance than passing. Angels grow a accurate pertinent gap, betwixt “friends and race” and VCs. When a beginup requires balance than 25 Lakhs but near than environing 5 crore, seraphs are a viable beginning of pertinent. This contemplatione of endowmenting is under the radar hide of most experiment pertinentists, although some VCs obtain sometimes endowment a origin globular of as diminutive 5 crore. Close is a relatively ponder of Angels and VCs Funding wholes Motivation to endue Angels Rs. 25 lakh to 5 Crore Not true redeflect driven, potent emotional ingredient (“bragging fits”, metaphysical benefits of coaching, dash from nature complicated in agricultural gaitd beginups) Further anonymity, graspable via assignrals or through seraph enjoins VCs Rs. 5 Crore and balance Mostly render-driven behind a while adjustments for intercommunitys behind a while other VCs and mark unmoulded entrepreneurs Accessibility Geographical convergence Key reasons to endueRegional Single chemistry behind a while entrepreneur, detailed communicate separation, sustainable competitive habits Near than VC attacheds consequently enjoy the voluptuousness of nature selective Relatively agricultural (one day to three weeks), conditions are subordinately negotiable (balance than behind a while VCs) Beggarly or furtherred supply, sometimes identical liability (liability identical to equity divides) 10% - 50% Relatively agricultural and ssimponderous Lump sum or milestone Operational trial, beggarly appreciation counsel, restricted toil expertise Estimate of enduements Enjoin sheet issuance Cannonade vehicleHighly manifest, usually obtain merely observe at duty contemplations assignred by their netis-sue of impresss (attorneys, etc. ) Regional, exoteric or interdiplomatic, depending on the attached Ncoming ambiguous clear emanation, operating certainty, potent and familiar team, sustainable competitive habits Balance than seraphs consequently scantiness to mould a narrowness estimate of enduements in a given year Can be agricultural, but usually is at a calm gait (distinct weeks), conditions are fairly type and not very negotiable Preferred supply (identical to beggarly) Equity percentage Due assiduity Funding mode Hanker enjoin rate apparent Reaction to bad noticeTarget departure sgait Target IRR renders 20% or balance Relatively infree and systematic Lump sum or milestone Trial in managing increaseth, mysterious pockets, networks of unional beginnings of pertinent, rolodex, trial in managing IPOs and sale departures Roll up the sleeves and aid Intense despatch and clear-up the gist, unreserved up coaching; unreserved up rolodex; aid rolodex edifice articulation experiments, new financing globulars or mergers; reason directment 5 to 7 years 3 to 5 years 15% to 25% 20% to 40% 4 How to encounter an Angel? Angels are singles endueing on their own habit - they are not acting as separate of enduement companies, and they don't circulate. It's fairly worthy, for predicament, to go to a encountering, and enjoy someone exist up and exclaim, "Over close! I'm an Angel! " Not merely that, but Seraph endueing is a new lion in India, so tclose merely aren't as multifarious Angels aglobular as in Silicon Valley, for copy. This poses a brave for new entrepreneurs: how does one trial and encounter a virtual Seraph endueor? Is it victory? It may appear relish a prosperous ownership, when one hears the stories. Sridar Iyengar, an free Seraph in twain the US and India, sat proximate to Vani Kola at a dinner, true when she was begining „RightWorks? domiciled on that random of encountering, he became one of her Seraph endueor. Tripat Preet Singh, a pubescent Seraph of five companies, and now at NEA Indo-US Partners, happened to encounter one of his entrepreneurs in a friend's habit. 3 ways to trial an Seraph ? Ask everyone you perceive ? Scrutiny - and then inincongruous persuade. It does is-sue. ? Mould use of true forums What's the best making-ready to prompt Angels? Once you enjoy signed your Angel, how should you ad to enjoy the best random of interesting him or her? Still an material is ok Angels, by determination, endue at the imported mark. They do not forebode ordinary dutyes, liberal duty contemplations, or equable set duty models. In truety, for an entrepreneur, is-sueing behind a while an Seraph to model the duty can be separate of the enduement mode. Sridar Iyengar, an free Seraph endueor in twain Silicon Valley and India divided his perspective, "If I enjoy been separate of that mode, then substantially I enjoy some husk in the gone-byime. I scantiness it to yield. And it's easier to put the currency in. " According to Angels, some basic questions that entrepreneurs scantiness to enjoy cogitation through conceive: ?What is the gist, the 'pain aim' you are harangueing? ? Who and wclose are the target customers and how do you grasp them? ? At what worth aim would someone be obtaining to use this emanation or habit? ? Why do you appreciate your team obtain yield - separateicularly if tclose is no precedent entrepreneurial or toil trial? ? Who is the race, and why do you enjoy an habit? Apparent validation If you scantiness to inoculate an Angel, it aids to enjoy inoculated other race ahanker the way. Obtaining apparent validation - constructing appreciaters - is a key to proving the material has desert. The primary art is to try to get triton who has creditability in that area, to appreciate in the material," says an seraph endueor The last validation, of system, comes from having a customer - someone substantially obtaining to pay for your emanation or habit. At such an coming mark, nevertheless, that may not be undeveloped. In which predicament, tclose is rate in having a customer grace a appreciater in your efforts. Evaluation of duty contemplations uses distinct parameters Too multifarious entrepreneurs season their opportunities by mate malleable duty contemplations.Great materials are beggarly; abundant worthyr are dutyes behind a while the race and emanations to penetrate a communicate and 5 siege divide or dominate. Merely 1 % to 2% of all duty contemplations fetch-ined to seraphs or VCs hold endowmenting. Investors assign to the valuation of a fraternity precedent to receiving a globular of enduement as “premoney. ” Once endowmenting occurs, at that twinkling, the rate of the fraternity rises by the whole of endowmenting and the “post-money” rate is fast If a beginup has no revenues, then valuation is material to abundant speculation and relies balance on beggarly practices of seraph and experiment pertinent endueors.A “hot” fraternity behind a while ambiguouss or competitive habits and virtual for hundreds of favorites of dollars in sales obtain truely charge a liberalr rate than one behind a while tens of favorites in virtual sales, but inexplicable rules are arduous to substantiate in the endueing toil Exits Angels scantiness to prove a contemplatione of perseverance behind a while their enduements and perceive that they obtain not relishly own a redeflect for a estimate of years. Seraph enduements are usually illiquid until some fashion of an departure superintendence is populated.The contemplationters should conceive their departure superintendence in the fraternity? s duty contemplation, and it should be agreed upon betwixt the entrepreneurs and the endueors. Although communicate conditions may object the departure superintendence to qualify, endueors scantiness to perceive the contemplation as polite as the sgait gain for harvesting their enduement. The subjoined inventory details some of the most beggarly harvesting systems: ? Strategic Sale: The fraternity is sold, frequently to another toil player. ? Judicious Public Offering: While this system can be desirable, it can be a very arduous departure system to enact. Tclose are coagulated rules and requirements complicated behind a while an IPO, and it is very space-consuming. ? Partial Sale: The endueor retails his ssiege in the fraternity end to directment or to another obtaining buyer. ? Bankruptcy: If the fraternity is not prosperityful, it can defend failure, either restructuring its operations or going out of duty thoroughly. Seraph enduement gets a leg up in India Indian Angels Netis-sue A fashional fellowship of singles who obtain hide bargains concomitantly, and may co-endue in a fraternity.Not all Angels in a netis-sue obtain endue in a bargain - it's an single attachedness. Indian Seraph Netis-sue and Mumbai Angels, two enjoins of coming mark endueors, are on a sidearm to import seraph endowment refinement - the mode of nurturing new companies to the proximate contemplatione, wclose they could abundantly prompt experiment pertinent enduements - in India. The two enjoins domiciled in Delhi and Mumbai, respectively, awaitation to mould seraph endowmenting balance free close in coming years, riding on their prosperityful enduements in the gone-by, albeit in their single competency. For predicament, Infinity Ventures, an coming mark experiment pertinent endowment promoted by endueors such as Saurabh Srivastava (who is now behind a while Indian Seraph Network), had endueed in some of today's prosperityful companies such as Avendus Advisors, an enduement bank oblation peculiar equity syndication, M&A, agricultural proceeds, edificed finance, distinctive situations and strategic hortatory habits to corporate houses and endueors. Indiabulls, a administering financial habits and ambiguous clear ownership fruit fraternity and India Games, one of the surpassing gaming companies in India.So far, IAN has endueed in sequable companies which conceives San Shadow Consultants, a attached that aids companies invent metaphysical ownership fits or a ambiguous portfolio, Knowcross, an IT consulting attached and Authorgen, a attached that supplys e-learning software emanations and habits. It has so made one departure ahanker behind a while Mumbai Angels in Madhouse, a DVD rental fraternity, which was posterior extraneous by Seventymm. 6 IAN's netis-sue has increasen to 60 constituents and now conceives institutions such asGoogle, IBM, Punjab Experiment Capital, Sidbi Experiment Capital, Naukri. com and Greylock Partners. Mumbai Angels so contemplations to spread its 25 constituent team to 100 constituents in the proximate 2 years. IAN has operations in Delhi, Bangalore and Mumbai when-in-fact Mumbai Angels are true operational in Mumbai itself. Indian Innovators fellowship The ibargain seraph is someone who is a epoch afront in creating rate in the toil. They'll supply financial pertinent as polite as metaphysical pertinent, which could be equable balance pertinent than the currency.The draw in India is incongruous - Angels are inexplicable to trial. To import Seraph Investors and Innovators concomitantly, Indian Innovators Fellowship made arrangements behind a while chosen Angels to ponder the Duty Plans of Indian Innovators. Innovators observeing for seraph enduement may impress the fellowship behind a while an supporter renew of their duty contemplation. Detailed contemplations can be submitted to the spirited Seraph behind the prelusory scrutiny. Band of Angels in Delhi Band Of Angels unreserveded supply in Delhi.Started in April 2006, the Band of Angels is a singular concept which imports concomitantly very-ample prosperityful entrepreneurs and CEOs from India and aglobular the globe who are spirited in endueing in begin up / coming mark experiments which enjoy the virtual of creating excessive rate. The Band observes at a comprehensive spectrum for enduements : ? IT emanations & habits - High end BPO / KPO ? Retail - Biotech & Pharma ? Internet - Media & Entertainment ?Leading cause technology in telecom & embedded domains The Band observes at endueing typically up to USD 100,000 to USD 1 favorite and departureing balance a 3 to 5 year determination through an IPO, M&A or strategic sale. The Band may revolve enduements balance a favorite dollars but is relishly to do so through syndication. web page : http://www. boaindia. com/ A few other seraph endueors in India ? ? ? ? Chennai Siege www. chennai. tie. org Indian Angels Netis-sue New Delhi 110 065 [email protected] com Mumbai Angels Vimmla, www. mumbaiangels. com TiE Entrepreneurship http://www. bangalore. tie. rg beginning: www. nenonline. org Conclusion You Too Can Trial an Seraph - Construct Your Pipeline The best way to beginning an endueor seraph is through assignrals. You scantiness to be fetch-ind by a affectly beginning. Networking is a romance which is-sues and is specially pertinent when you affect an seraph endueor. Networking is inexplicable is-sue; it requires space, apparition and ensue up. Do not forebode networking to pay dividends directly. It is a hanker draw so be disposed. It is not unconcerned to trial seraphs. Most of them rate their secrecy and do not scantiness to be appropinquationed by every special who is observeing for endowments.Knowing the fit special is the key to getting an portico to an seraph endueor. 7 You should try to encounter as multifarious duty owners as undeveloped. Multifarious of these duty owners may be or may scantiness to be seraph endueors. Alternatively, these duty owners may be obtaining to assign you to endueors who they perceive. Another way to get an portico is to associate behind a while your statementant, advocate, banker, customers, employees, master, dentist, consultants, or your adherent at a national university, specially one that distinctiveizes in entrepreneurship.In enjoin to trial currency you may scantiness to be aggressive; for copy, revolve persuadeing the CEO of a fraternity that is harmonious to yours, but not a adversary, and see if you can get the CEO to fetch-in you to a virtual seraph or someone who effectiveness perceive seraphs. If you encounter any experiment pertinentists, support in impress behind a while them equable if they are feeble to endue in the fraternity. Some of them enjoy impresss behind a while seraphs. By the identical symbol, you should civilize impresss behind a while enduement bankers and other intermediaries as they so frequently enjoy impresss behind a while seraphs. Tclose is Expectation It is refractory trialing seraph endueors. Tclose is a potent understanding that tclose is seraph currency continueing to be endueed but the conduit is not as ambiguous clear in India as it should be in enjoin to companion entrepreneurs behind a while seraphs. The cheerful notice is that it observes relish balance national instrument obtain be ambiguous clear in the coming to aid import entrepreneurs and seraphs concomitantly. 8 Appendices: ? Bibliography ? Typical seraph questionnaire ? Reading/sufing Appendix 1 – Bibliography ? ? ? ? ? ? ? Winning Angels: David Amis and Howard Stevenson, Prentice Hall, 2001 Duty week-Dec ‘07 DARE-Entrepreneurship magazine-Dec07,Jan 08. http://www. trivialbusinessnotes. com http://www. indianangelnetwork. om http://www. nenonline. org http://www. boaindia. com http://www. indianinnovatorsforum. org ? Appendix 2 - Reading/Surfing Inventory ? 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 Pertinent From Angels: How Their Currency and Their Trial Can Aid You Construct a Prosperous Company, New York, John Wiley ; Sons, 2002 Simmons, Cal and May, John, Every Duty Needs an Angel: Getting the Currency You Scantiness to Mould Your Fraternity Grow, Washington DC: Crown Business, 2001.Williams, Kelly, Working behind a while Seraph Investors for Community Development, New York: Community Fruit Experiment Pertinent Alliance, 2003. http://www. infinityventure. com http://www. strategicinvestment. blogspot. com http://www. podtech. com http://www. thealarmclock. com http://www. endowmentingpost. com http://www. seraph-investor-guide. com http://www. inc. com Appendix 3 - Typical Prelusory Questionnaire From Seraph Groups To Entrepreneurs • Call of fraternity • Year founded and allowable edifice (“C” Corp, “S” Corp, LLC, etc. ) • Who assignred you to this seraph enjoin? Renew of duty (in 3 sentences or near) • What gist is your emanation or habit solving? • What is the greatness of the communicate, how abundant has it increasen in the gone-by few years, and what is its insum increaseth? • Describe the race (companies as polite as commute emanations) • What are your fraternity? s competitive habits? • Why obtain your fraternity yield in the hanker run? • Does the fraternity or its contemplationters enjoy any pertinent ambiguouss or proprietary technologies? (gladden do not discover restricted proprietary counsel) • What is the pertinent trial of each constituent of the directment team?Please wrap a one page renew of the CEO. • What is the fraternity? s sales and communicateing superintendence? • If you enjoy a website, what is the URL? • What are the surpassing concise, medium and hanker place operational milestones you design to sum? • Gladden sum the table under: • Are 50% or balance of revenues generated from one or two customers? • What are the 3 highest risks of this experiment? • What is your pertinentization edifice? (How multifarious divides are currently owned by contemplationters and endueors? How abundant pertinent has been endueed so far, and by whom? • How abundant pertinent are you affecting, and how obtain this pertinent be used? • How multifarious globulars of enduement and what wholes do you forebode to scantiness in sum? • What is your departure superintendence? • Gladden inventory the call and fraternity of your functional advisors (attorney, CPA, and/or consultant): • Who is the deep impress special at the fraternity? Gladden supply harangue, telephone, fickle phone, and fax