[dropcap]A[/dropcap] lot of entrepreneurs we speak to ask us about how they can get funded. To get some answers to this million dollar question, Techstory will talk to some well known investors in the country. In this interview we talk to Bindia Maheshwari, Vice President at CIO Angel Network. Perviously Bindia was also the Head- West India Operations of the Indian Angels Network. Techstory asks her about her CIO Angel Network, about what excites an investor when funding a startup and what are some of the common mistakes entrepreneurs make when asking for funding !
Tell us a little about CIO Angel Network (CAN)
CIO Angel Network or CAN is a network of select few High Networth CIOs who are wanting to invest in tech companies in the B2B domain.
CIO’s understand technology well , are the nurturers of technology and are also the primary consumers of tech products.They are therefore in a better position to understand the next big wave in the tech industry and evaluate tech companies.
CAN aims to make niche sector specific investments at a seed stage. The initial deal size is 100,000 USD but the size will increase going ahead depending on the network.
CAN is an initiative by Anoop Mathur. CAN’s first chapter in Mumbai will focus on Technology & Technology enabled deals. CAN is not an investment fund, but rather, a network of investors who make individual seed investment decisions after working together to evaluate candidate companies.
CAN is currently a 30 member group. We are focusing on increasing this group and we also plan to have many more chapters across the country.
What do you feel about the startup and funding environment in India ?
In the last 18 months I have seen a renewed focus on startups in India. There is a lot of innovation happening with so many young and bright individuals coming up with newer ways of doing things.
The next decade in India is all about entrepreneurship and growth. It is going to be all about tech, all about SMAC. I am very bullish on the India story.
There is a lot of investment happening around right now but it is completely justified. There are a lot of innovations, ideas, discoveries, a lot of good work happening . There is definitely a need for lot more angels to fund such ideas.
When is the right time for a company to look for funding ?
Today investors are ready to fund companies at every stage of the company’s evolution. When a company wants to get funded totally depends on how the founders feel about it.
As an Angel, what excites us is a clear proof of concept and some early revenues. My advice to entrepreneurs would be to remain bootstrapped until you can justify value to investors.
As an Angel what do you look for in a startup ?
A few points that I would look for in a startup are as below.
- The idea has to be innovative, disruptive and scalable. It has to be something that has not been available before. Copy cat ideas usually do not do very well. I am therefore not a big fan of them.
- Who is the compeition direct or indirect and how are they doing ? What does it mean to the company I am funding.
- What is the team composition like. This is extremely important. The team has to be passionate and has to have the ability to run the company by themselves and for a long term. The cofounders should compliment each other. Having a great team is a huge asset. As an investor it gives us huge comfort.
- It is also very important for me to understand what are the exit opportunities.
What are the most common mistakes entrepreneurs make when asking for funding ?
Founders spend too much time beautifying the pitch documents. It is absolutely not necessary ! On a serious note, I find that a lot of time entrepreneurs make unrealistic predictions and come up with unrealistic valuations. They are very hung up on valuations at a such early stage of their company.
The other mistake entrepreneurs make is not doing enough research. A lot of times we come across entrepreneurs who tell us that they have no competitors. A lot of them actually have just not done enough research. Sometimes they don’t even have an articulate vision.
Entrepreneurs must be totally prepared with everything they need to know about their company and about their industry. They should also be very practical in understanding where they stand, where they want to go and how they will reach there.
What is the next big wave in the tech space ?
Internet of Things, Mobile apps in SMAC, CleanTecg, healthcare will be the next big thing !