Entrepreneurship has become the household word since the onset of “Shark Tank” in India. From discussing cricket, politics, and daily news, people have shifted their focus towards startups, entrepreneurship, angel investors, funding etc. Apart from cricketers and actors, now renowned entrepreneurs and even angel investors are being celebrated like rock stars.
With this growing trend, it’s crucial to understand some of the common terms used in the business and startup world.
Angel investing is a vital term in the startup ecosystem, and it’s essential to know what it means, how to become an angel investor, and who the top angel investors in India are. Angel investing doesn’t involve actual angels investing in businesses, despite the term’s literal meaning.😛
This article aims to provide an overview of angel investing, how to become an angel investor, and who the top 5 angel investors in India are.
Angel investors play a critical role in startups’ growth, particularly in their early stages, by providing funding, expertise, mentorship, and connections. With the right investors, startups can gain credibility, attract further funding opportunities, and grow their businesses.
Therefore, it’s crucial to know who the top angel investors are and the impact they have on the Indian startup ecosystem. This article will cover their investment philosophies and strategies, notable startups they’ve invested in, and how they’ve impacted the Indian startup culture and community.
What is Angel Investing?
When startups begin, they usually face a capital crunch. To get funds, they opt to give away a percentage of equity in their business in exchange for seed funding. Angel investors are those high-net-worth individuals who provide this initial funding and help the businesses to scale up. Worldwide, there are approximately four million angel investors who invest in early-stage startups.
However, angel investing involves high risk since investors might lose their money if the startup fails. Generally, businesses that seek angel investments already have a minimum viable product and require funds to scale up their business further. Angel investors provide not only financial support but also assist founders and teams with their business tactics, strategies, and mentorship.
In essence, angel investors also act as mentors, and investing in startups is a way of giving back to the startup ecosystem.
But why is it called angel investing and how does angel investing work? Let’s find out.
Why is it called “Angel Investing”?
The term “angel investor” originates from the USA when wealthy individuals used to provide monetary assistance to theatres and their operations, and they were referred to as “angels”.
The term was coined by William Wetzel while studying the capital-gathering process of businesses.
Startups generally go through several stages of funding to grow and scale:
- The initial stage involves bootstrapping, where the business owner invests their own money.
- The next stage involves seed funding rounds by angel investors.
- Subsequently, venture capitalists conduct series A, B, C, D, etc. funding rounds,
- The final stage is to launch an IPO.
Challenges in Angel investing And The Measures Taken
Despite the growth in angel investing in India, there are still some challenges that need to be addressed. Some of the biggest problems are listed below:
- One of the most significant issues is the scarcity of experienced and skilled angel investors. Many angel investors in India are first-time investors with insufficient expertise and experience to make sound investment judgments. This might result in bad investment decisions and low returns for investors.
- In order to address this issue, various groups in India strive to educate and coach angel investors. These organizations offer training, networking, and other tools to assist investors in developing the skills and knowledge required to make sound investing decisions.
- Another challenge faced by angel investors in India is a lack of exit opportunities for their investments. While the startup ecosystem in India is growing, the number of exits is still relatively low. This makes it difficult for investors to realize returns on their investments and discourages them from investing in the future.
- To solve this issue, there is a rising movement in India to provide additional exit alternatives for entrepreneurs. This involves the maturation of the venture capital ecosystem as well as the establishment of more acquisition prospects for entrepreneurs.
Top 5 Angel Investors In India
The top five angel investors in India are listed here, along with the firms they have backed. There are numerous angel investors in India that have shown a significant interest in startups.
1. Kunal Shah
The founder of Freecharge and the person now creating CRED is Kunal Shah. More than any other investor, he holds stakes in more than 170 businesses.
He does not place much importance on increasing his own riches through angel investment. His primary goal is to support the startup ecosystem. For him, it’s altruism.
A quick message on his Whatsapp with your pitch deck or a brief note about you and the product you’re building—ideally with a recommendation from one of his investor or entrepreneur friends—will suffice if you want to solicit investment from Kunal Shah. He could decide to put money into your startup.
2. Rajan Anandan
Although this angel investor is from Sri Lanka, most of his investments are in India, which is why we have listed him.
He was the managing director of the venture capital firm Sequoia Capital. He doesn’t have any Sri Lankan businesses in his own portfolio, according to CrunchBase, but he founded a venture capital firm named Blue Ocean Ventures in Sri Lanka to help the country’s startup ecosystem grow.
Rajan has made investments in over 67 firms throughout his more than 12 years as an angel investor. Four out of five of the businesses he has invested in are Indian. He has made 16 noteworthy exits to date, including those from Innov8 and Gamingmonk (both bought by MPL and POPxo by Myglamm) (acquired by OYO).
3. Anupam Mittal
He may be well-known to you as Shark Tank India’s first episode judge. Shaadi.com, Makaan.com, and Mauj Mobile are all under the management of Anupam, the founder and CEO of People’s Group.
He funded 24 firms in Shark Tank India with 5.4 crores. In 2011, when Ola was in its seed fundraising round, he began his investment career. He has made investments in over 65 firms thus far.
Anupam has left 12 companies so far, including Simsim (acquired by YouTube), Dailyninja (bought by BigBasket), Truebil (purchased by Spinny), and HashLearn (acquired by BYJU’S). He still has his stakes in companies including Ola, Trell, Rapido, Letsventure, Animall, and Lido Learning.
4. Kunal Bahl
In addition to Tidal Capital, which he co-founded with his co-founder Rohit Bansal, Kunal is also credited with founding Snapdeal. The Wharton School of Business awarded Kunal’s business degree, and he is an engineer who attended the University of Pennsylvania.
He’s a native of New Delhi. He has so far made investments in over 66 businesses and exited six of them, including Flyrobe, ANS Commerce, Zenatix, Betaout, Fynd, and Gigstart.
MamaEarth, Rapido, Ola, IndiaGold, and Jugnoo are a few of the companies he has invested in.
5. Ramakant Sharma
Ramakant co-founded Zing ecommerce in 2012. He started his entrepreneurial career there. Zing e-commerce is a subsidiary of Violetbag.com. They primarily cater to the demands of fashionable women. He founded Livspace in 2014, and in 2022 it turned into a unicorn.
He has so far invested in 61 businesses, including Wiz Freight, Captain Fresh, Toothsi, Conveni, and Trell.
How to find angel investors in India using Leadzen.ai?
Leadzen.ai is an AI-powered lead prospecting engine that can help you find angel investors in India. One of the key features of the platform is the trending leads feature, which allows you to identify and connect with potential investors based on their recent activity and investment interests.
To find angel investors in India using Leadzen.ai, you can follow these steps:
- Sign up for an account on Leadzen.ai.
- Use the platform’s search filters to narrow down the list of potential investors to those based in India and with a focus on angel investing.
- Use the “trending leads” feature to identify potential investors who have recently been active and have invested in similar businesses or industries.
- Identify potential investors who fit well with your business.
By using the trending leads feature, you can identify and connect with potential angel investors who are actively looking for investment opportunities and have a proven track record of investing in similar businesses or industries. This can help increase the chances of securing funding for your startup.
Additionally, Leadzen.ai also provide you with extensive data on the angel investors like their contact details, portfolio, and other relevant information that will be helpful for you to get in touch with them.
Takeaway – Angel Investors In India
In conclusion, angel investors in India are on the rise, driven by the growth of the startup ecosystem. However, we still need to address challenges such as a lack of experienced investors and exit opportunities.
With the right support and resources, angel investors in India can play a vital role in supporting the growth of the startup ecosystem and driving innovation in the country.
Take the first step towards securing funding for your startup and find the perfect angel investor for your business with Leadzen.ai’s trending leads feature. Connect with active and experienced investors who have a proven track record of investing in similar businesses or industries.
Sign up now and get access to the right investors for your business. Don’t miss out on the opportunity to grow your startup with the help of Leadzen.ai.
