Dive into the world of early stage venture investing with Nandini Mansinghka, the CEO of Mumbai Angels as we uncover the key factors to consider when choosing the right company to invest in.
Discover the value angel investors bring to founders and explore different approaches to startup investments. Nandini shares valuable insights on the criteria for investing and the financial commitments required. But remember, investing isn't without risks. Be prepared to potentially lose capital.
Learn about the advantages of investing through platforms like ours, and gain insights into the world of crypto investments. Tune in now and build a diversified startup portfolio that sets you up for success!
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Speaker 1: Nandini Mansa is the CEO of Mumma S, which is
00:00:04
Speaker 1: a very popular platform for startup and early stage venture investments.
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Speaker 1: More importantly, Nandini is one of the key architects of
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Speaker 1: the startup investing ecosystem in India.
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Speaker 1: She's truly passionate about democratising investments in early stage startups
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Speaker 1: and making this asset class an integral part of any
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Speaker 1: meaningful investor portfolio.
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Speaker 1: And in that she is different from the bunch of
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Speaker 1: investors
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Speaker 1: seen on bloating evaluations purely by pumping money into business
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Speaker 1: models that don't make sense.
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Speaker 1: What also separates her from the bunch is that she
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Speaker 1: happens to be a serial entrepreneur and an investor herself
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Speaker 1: with more than a decade of experience.
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Speaker 1: She's bright,
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Speaker 1: she's a joy to chat with.
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Speaker 1: And in this episode I had the pleasure of sitting
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Speaker 1: down with her and really digging deep
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Speaker 1: into early stage venture investing and the nitty gritty of
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Speaker 1: raising your first ever round of funding from a nature.
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Speaker 1: Enjoy.
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Speaker 1: Hello, Hello. Welcome to the U Incorporated podcast with me,
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Speaker 1: your friendly neighbourhood part-time creator and full time media nude.
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Speaker 1: On this show, I catch up with some of the
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Speaker 1: most bad ass founders, media, Mavericks and indie hackers in
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Speaker 1: the whole wide world. And we have some truly insightful
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Speaker 1: chats on startups, media and influence. The stuff that gets
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Speaker 1: left out of the media headlines.
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Speaker 1: Whether you're in a corporate, a startup, you own a
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Speaker 1: legacy brand a scrappy side hustle or you're only a student.
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Speaker 1: If you are keen to build your brand your voice
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Speaker 1: your way, you're in the right place. Here we go.
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Speaker 1: Hey, welcome to the show, Nandini,
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Speaker 2: Thank you so much. Thank you for having me here.
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Speaker 1: We're speaking about how to be an angel investor. What
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Speaker 1: does it need to be an angel? Investor? There are
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Speaker 1: two
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Speaker 2: things here. One is there is this film called Startup.
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Speaker 2: And then there's some
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Speaker 2: bad news is that both these terms are outdated.
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Speaker 2: OK, so what we what? These two terms, I think,
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Speaker 2: actually evolved about 2025 years back in the Silicon Valley. Right?
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Speaker 2: And if you see yeah, as an economy has always
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Speaker 2: been built by startups, so it's only been a function
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Speaker 2: of who's actually funded them. So if you got fund
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Speaker 2: by friends and family, somehow it's not being called a startup.
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Speaker 2: Yeah. Today, if you look at where we are and
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Speaker 2: if your question on saying can you just start investing?
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Speaker 2: Sure you can. But you should first understand what you
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Speaker 2: are jumping into,
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Speaker 2: right when you're wanting to jump into this, you have
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Speaker 2: to understand that this whole business of shark
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Speaker 2: whole business of economic times these are marketing tools. They
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Speaker 2: don't tell you what is actually happening in the entire ecosystem.
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Speaker 2: And what does it require for you to actually do this?
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Speaker 2: So if you said OK, what if I just look
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Speaker 2: at it and say, What are the four things that
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Speaker 2: one needs to understand before saying can actually invest in startups? OK, four,
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Speaker 2: very critical.
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Speaker 2: First, it is to understand that this is an asset class.
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Speaker 2: So this is not about unicorn hunting. This is not
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Speaker 2: about going and finding that one company that's going to
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Speaker 2: become a billion dollar valuation. It is to understand that
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Speaker 2: you are actually trying to find companies on a continuous
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Speaker 2: basis which are just trying to raise their first round
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Speaker 2: of external money.
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Speaker 2: Got it so that that is what startup investing is
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Speaker 2: all about. And if you looked at the entire
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Speaker 2: chain of companies which are not listed and you looked
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Speaker 2: at say, I don't know. I say a flip card
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Speaker 2: at one, which is just, say, just pre IP a
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Speaker 2: OK
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Speaker 2: and you look for a curve and say What is
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Speaker 2: the thing happening at the other end that is startup
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Speaker 2: investing
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Speaker 2: where you're going to put 1st 50 lags to two courts?
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Speaker 2: OK, so that's the fun. It's an acid class. It's
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Speaker 2: an early stage venture, so we nowadays actually call it
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Speaker 2: early stage venture as an acid class.
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Speaker 2: The minute you call something as an ace, this is 0.2.
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Speaker 2: You have to do two or three things there. One
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Speaker 2: is you have to do a deliberate portfolio allocation so
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Speaker 2: you can't just one day get up and say, I'm interested.
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Speaker 2: I like it. I will go and most importantly, say
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Speaker 2: I'm going to find the winners. I've done this now for,
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Speaker 2: I think, 13, 14 years. I'm much less confident today
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Speaker 2: on if I'll be able to strike a winner than
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Speaker 2: I was five years back.
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Speaker 2: So there is no concept of saying I will find
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Speaker 2: that one winner.
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Speaker 2: The concept he is saying, I'm going to allocate specific money.
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Speaker 2: Second, I'm going to build a portfolio. So if you
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Speaker 2: look at the if you look at the numbers of
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Speaker 2: start ups that prolific investors across the globe invest in
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Speaker 2: their numbers are anywhere above 50 to 60 start ups.
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Speaker 2: So that means you will have to invest when you're
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Speaker 2: getting into this. So tomorrow. Assuming you hit that for you. OK,
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Speaker 2: you have to say 30 to 50 startups, minimum minimum.
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Speaker 2: You have to invest record startup. So that's the point.
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Speaker 2: 0.3 is to understand that this is an extremely risky
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Speaker 2: asset plus,
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Speaker 2: which means that you can go to zero. So you
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Speaker 2: should only invest in this
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Speaker 2: if you are OK for your money to go to zero,
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Speaker 2: and you can sleep properly
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Speaker 2: if every day you wake up if you say Oh
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Speaker 2: my God, how much money have I invested in startups?
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Speaker 2: Is it going to go down? Is it not good?
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Speaker 2: You don't have the risk capita for it, OK? And
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Speaker 2: the fourth is especially in India. It's more relevant in
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Speaker 2: India than other parts of the world is that it's
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Speaker 2: an extremely liquid asset class, which means that
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Speaker 2: you cannot decide when you want to get out. You
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Speaker 2: can't just say, Oh, today I need the money. Can
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Speaker 2: I just find a buyer that is minimal to zero
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Speaker 2: secondary market in India for startups, which means you can
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Speaker 2: only get your money if somebody else is investing
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Speaker 2: in your investment. So these four roles, if you understand,
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Speaker 2: and if you keep playing by it in a very
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Speaker 2: disciplined way,
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Speaker 2: understanding the risks. Yes, you can deploy the money you
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Speaker 2: want in the lottery. Otherwise, I would recommend this as
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Speaker 2: a class is not for you.
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Speaker 1: Are there any legalities in place for the kind of
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Speaker 1: people who can invest? There are
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Speaker 2: two ways one can invest right. One is just so
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Speaker 2: assuming you just invest. Five friends got together and they
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Speaker 2: started saying, Oh, we'll invest in startups. Then there is
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Speaker 2: no requirement. You can cut even a 5000 if you want.
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Speaker 2: OK,
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Speaker 2: if, however you are investing in, say, a platform like
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Speaker 2: ours or several similar platforms, what has happened is that
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Speaker 2: now Sebi has gradually started saying that Look, you have
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Speaker 2: to invest via what are called angel funds
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Speaker 2: so you can no longer invest directly. Say, for example,
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Speaker 2: our platform you can no longer direct invest directly in
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Speaker 2: a company. You have to come via the phone there.
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Speaker 2: The regulation from CB is it's two fold. One is
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Speaker 2: you have to commit a minimum of 25 lacs to
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Speaker 2: be invested over five years,
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Speaker 2: so five years. So basically they've done a back math
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Speaker 2: and said five lacs per annum or so and then
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Speaker 2: the second is you have to do a declaration of
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Speaker 2: one earn income declaration where you need to show you
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Speaker 2: have a network of two courts individual network. So this
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Speaker 2: is not family network or anything, and this has to
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Speaker 2: exclude the residents that you live in.
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Speaker 2: OK and you have to. So that's these are the
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Speaker 2: two specific numerical or economic criteria. The third is they
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Speaker 2: are actually Sabi is trying to put together some kind
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Speaker 2: of a skill or understanding of risk criteria where you
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Speaker 2: have to self certify one of the three things one
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Speaker 2: is that
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Speaker 2: you are a founder yourself,
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Speaker 2: B. You have invested in startups before, or C you are.
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Speaker 2: You have 10 years plus work experience.
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Speaker 1: Got it.
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Speaker 1: I can either invest whatever token amount I want. If
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Speaker 1: I'm doing that in a personal capacity or If I
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Speaker 1: go via something like a India network network, I have
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Speaker 1: to follow these conditions. Some
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Speaker 2: platforms also allow you to do both,
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Speaker 2: so you could. Also, if you are investing larger ticket sizes,
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Speaker 2: you could be investing directly on the cap table. Also,
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Speaker 2: whereas platforms like ours are only through the angels,
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Speaker 1: what sort of people does that lead us to in
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Speaker 1: terms of the kind of people who generally invest in
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Speaker 1: these sorts of ventures? Are they exclusively founders and CEO
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Speaker 1: S of companies? Or do you also see other profiles
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Speaker 1: of people who invest in startups via your fund?
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Speaker 2: So one is, uh, when you invest via in fund like, say,
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Speaker 2: like ours or any other platform, you actually don't need
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Speaker 2: to commit so much of money. That's one of the advantages. So,
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Speaker 2: for example, in our platform, there are several times you
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Speaker 2: can invest as no as a lack Macs. That we
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Speaker 2: will put our seeing is fine. So in in a deal,
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Speaker 2: et cetera.
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Speaker 2: So you're actually what you're required to do is to
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Speaker 2: actually have, say, investable coppers of like I said, minimum
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Speaker 2: of 25 lads to 50 lacs, so you can start
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Speaker 2: your journey at that number
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Speaker 2: so you can start your journey in that book.
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Speaker 2: Is that the right number? I don't think so. I
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Speaker 2: think you should have a minimum ability to invest like
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Speaker 2: I mentioned 50 lacs, which you can lose and not
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Speaker 2: worry about. So it's That's a very critical piece to understand, really.
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Speaker 2: So you're not So you're not looking at people who
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Speaker 2: have a minimum investable corpus of 2010 to 12 grows.
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Speaker 2: You're actually looking at somebody who has a minimum investable
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Speaker 2: corpus of 25 lacs onwards, right? So that that's number one.
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Speaker 2: Not if I look at my data and say What
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Speaker 2: kind of people are actually investing and it's basically see
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Speaker 2: till about, say, a couple of years back. I would
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Speaker 2: say that the majority of people who were investing with
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Speaker 2: us were entrepreneurs, and I actually like to club entrepreneurs
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Speaker 2: as not just new age entrepreneurs but anybody who has
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Speaker 2: been running their own business. This term entrepreneur is a
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Speaker 2: new term. India is. We are a country of entrepreneurs
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Speaker 2: of several generations, So
00:11:07
Speaker 2: if I look at that car, it was an entrepreneur
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Speaker 2: focused investor base. Either it's the first generation who was
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Speaker 2: in their seventies and eighties, or it's their second generation
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Speaker 2: in their fifties or sixties
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Speaker 2: or forties to six fifties. And then there was this
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Speaker 2: third generation, which was a lot of times not interested
00:11:26
Speaker 2: in the family business. And then they were actually to
00:11:29
Speaker 2: set up a family offers with a couple of 100
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Speaker 2: of crowds, and they would be able to do this.
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Speaker 2: So that was the breakup of investors, for I would say,
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Speaker 2: at least say, five years back. Now we have seen
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Speaker 2: two very interesting new coming in. One is this whole
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Speaker 2: New Age entrepreneur, successful entrepreneur who just sold their business.
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Speaker 2: They are now saying that apart from
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Speaker 2: trying to set up something else, I also want to
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Speaker 2: build this whole ability to invest in startups.
00:12:01
Speaker 2: And then there is this whole professional investor base that
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Speaker 2: has started coming in, which is the CX OS people
00:12:08
Speaker 2: who have worked for, say, 10 years of their life,
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Speaker 2: and now they want to not just invest but also
00:12:14
Speaker 2: find if they can actively contribute to the startup that
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Speaker 2: they are investing. So that's the other very good mix
00:12:21
Speaker 2: that has started coming up And of course, there are
00:12:23
Speaker 2: now these larger ticket size family offices
00:12:26
Speaker 2: were actually wanting to build portfolios of their own. And increasingly,
00:12:31
Speaker 2: we started seeing that on family offices. You know, there
00:12:33
Speaker 2: are separate desks or separate teams just looking at early
00:12:37
Speaker 2: stage venture as an asset.
00:12:41
Speaker 2: Got it? I think more than saying, which state should
00:12:44
Speaker 2: you invest? You have to first ensure that you don't
00:12:47
Speaker 2: start your journey all by yourself. You have to become
00:12:51
Speaker 2: a part of a platform. And like I said, it's
00:12:54
Speaker 2: not a plug about us, but just generally whichever platforms thing.
00:12:57
Speaker 2: Because I keep saying that startup investing is a craft.
00:13:01
Speaker 2: It's a lifelong craft. So, like, for example, if you
00:13:04
Speaker 2: ask me and saying Fast forward, I'm 90 years old
00:13:07
Speaker 2: I don't know what else I'll be doing, But I'll
00:13:10
Speaker 2: still be investing in startups, and that requires you to
00:13:14
Speaker 2: continuously keep upgrading this as a craft and that you
00:13:18
Speaker 2: cannot do in isolation. So you need to be able
00:13:21
Speaker 2: to see a a very strong deal flow and B,
00:13:25
Speaker 2: you need to be in company of people who do
00:13:28
Speaker 2: this regularly and who understand. So that's number one, the
00:13:32
Speaker 2: second is that you need to be able to start
00:13:36
Speaker 2: identifying what is your risk appetite?
00:13:39
Speaker 2: Because what you need to know is that the earlier
00:13:41
Speaker 2: you will invest in higher are the chances that you
00:13:46
Speaker 2: know the company will sell or the startup will see.
00:13:48
Speaker 2: So you need to like, say, for example,
00:13:51
Speaker 2: if you look at say us, we do right from
00:13:54
Speaker 2: seed funding. Still say C will take bites of series. B.
00:14:00
Speaker 2: I'm not a big fan of C names and all
00:14:02
Speaker 2: because I think it's all got blurred by now. Yeah,
00:14:05
Speaker 2: but still, I would say that OK, we are doing
00:14:07
Speaker 2: Let's just say we're doing 50 lacs to smaller bits
00:14:11
Speaker 2: of a 30 crow or 50 crow round. Now you,
00:14:13
Speaker 2: as an investor will need to over a period of time,
00:14:17
Speaker 2: understand where my skill set lies and where my
00:14:21
Speaker 2: comfort level lies on the risk opportunity matrix.
00:14:26
Speaker 1: Got it? Is there a skill set really, that I
00:14:29
Speaker 1: need to have?
00:14:30
Speaker 2: Absolutely, I think a couple of things one is you.
00:14:35
Speaker 2: Should
00:14:37
Speaker 2: I to see the potential of a company and not
00:14:44
Speaker 2: just
00:14:46
Speaker 2: say that I want all the answers? That's a very
00:14:50
Speaker 2: that's a very critical one. You said balance sheets numbers.
00:14:55
Speaker 2: I actually think that's not such a big scale required. So, like,
00:14:59
Speaker 2: for example, I was an investment banker in my earlier
00:15:03
Speaker 2: of
00:15:05
Speaker 2: so there I could only operate. If there is an
00:15:09
Speaker 2: Excel sheet, only numbers only comparisons. Valuation D, CS. And
00:15:15
Speaker 2: if the Excel sheet doesn't exist, I don't exist
00:15:19
Speaker 2: today. It's a reverse I will first start with looking
00:15:24
Speaker 2: at like at the Founder, and and my first question is, OK,
00:15:28
Speaker 2: what's your opportunity? B. Why are you the best team
00:15:31
Speaker 2: to do it? The founder market fit. So those questions
00:15:35
Speaker 2: come in and then why are you the best team
00:15:38
Speaker 2: to do it? How is your conviction to actually go
00:15:42
Speaker 2: out there and do what you're promising to do? Why
00:15:44
Speaker 2: should I bet on you
00:15:46
Speaker 2: like most things come much before financial, so that ability
00:15:50
Speaker 2: to un let's just say the excitement of being able
00:15:53
Speaker 2: to identify something just at its nascent stage is one
00:15:57
Speaker 2: key skill set.
00:15:59
Speaker 2: The second one is it's a very tough one
00:16:03
Speaker 2: is to know that look, you're actually going to bet
00:16:06
Speaker 2: on another person to build something out for you don't
00:16:10
Speaker 2: invest in a start up with the intention of trying
00:16:14
Speaker 2: to run it for them or trying to think that
00:16:18
Speaker 2: the start up founder needs to listen to me. No,
00:16:20
Speaker 2: the startup founder doesn't need to listen to you. You
00:16:23
Speaker 2: are not there to steer the company. You are betting
00:16:27
Speaker 2: on somebody else to make money for you
00:16:30
Speaker 2: so that
00:16:32
Speaker 2: distance yourself and not think you're the smartest one in
00:16:35
Speaker 2: the room. I think it's a
00:16:39
Speaker 2: I think it's an experience journey for an investor, and
00:16:43
Speaker 2: with that experience, I think also comes the skill.
00:16:50
Speaker 2: Do not want to be right all the time.
00:16:54
Speaker 1: That's very hard given that you've put in your money
00:16:57
Speaker 1: into the venture. Yeah,
00:16:58
Speaker 2: but you know that Like I said, if we go
00:17:01
Speaker 2: back to the first four rules, it's risky, you will
00:17:04
Speaker 2: lose your capital and
00:17:07
Speaker 2: if I look at our portfolio OK, only about say, 30%
00:17:11
Speaker 2: of the portfolio actually make up for the rest of them,
00:17:15
Speaker 2: and about 15 to 20% really go to zero. You
00:17:18
Speaker 2: can do anything to zero, so the other piece other
00:17:22
Speaker 2: skill set that an investor needs to have is to
00:17:25
Speaker 2: not bring anger in the room
00:17:28
Speaker 2: very tough, and it's tougher to do when your money
00:17:31
Speaker 2: is actually going down the drain. We'll see companies where
00:17:34
Speaker 2: money is going down the drain. Now.
00:17:37
Speaker 2: I think the new conversations today is of found founder,
00:17:41
Speaker 2: intentional fraud or founder Intentional being used. But I think
00:17:46
Speaker 2: that's a very small percentage of what there's so many
00:17:49
Speaker 2: things that can go wrong and your money will go down.
00:17:51
Speaker 2: That's what I'm saying. It's not just mind your money
00:17:54
Speaker 2: will go down
00:17:55
Speaker 2: right that I. I think these are 34 things. Then,
00:17:59
Speaker 2: of course, you need to be reading all the time.
00:18:01
Speaker 2: If you really want to do it, you have to
00:18:03
Speaker 2: be reading all the time. You need to be watching videos, podcasts,
00:18:08
Speaker 2: learning stories of successful investors attend sessions.
00:18:14
Speaker 2: Yeah, so, like I said, it's a craft. It's
00:18:16
Speaker 1: of course, you You're speaking about what makes a good investor,
00:18:20
Speaker 1: and you said something very interesting, which is, of course,
00:18:23
Speaker 1: there's the role of knowledge. But you also need to
00:18:26
Speaker 1: know if or not this little thing that these couple
00:18:30
Speaker 1: of people are doing is likely to take off or not.
00:18:34
Speaker 1: That's likely to happen if you have enough experience likely
00:18:37
Speaker 1: in the sector. So let's say if I've been working
00:18:38
Speaker 1: in the media sector for 10 years, I am more
00:18:41
Speaker 1: likely to invest in media startup because I just understand
00:18:44
Speaker 1: the domain. What has your experience been?
00:18:47
Speaker 2: I think as an individual investor you should diversify. I
00:18:51
Speaker 2: don't think you should, uh, only in in the larger
00:18:55
Speaker 2: investment space there is this whole rule of saying invest
00:18:59
Speaker 2: only what you understand here. I think there is
00:19:04
Speaker 2: maybe some part you say Yes, I'm like, if I'm
00:19:07
Speaker 2: from logistics, if I understand logistics and if the logistics
00:19:10
Speaker 2: company and my
00:19:12
Speaker 2: I can see this will not work that I have
00:19:15
Speaker 2: with you.
00:19:16
Speaker 2: But sometimes you will have to go with the views
00:19:19
Speaker 2: of others.
00:19:21
Speaker 2: You will have to start building your intuition on what
00:19:26
Speaker 2: potentially has some other
00:19:30
Speaker 2: other boxes ticked even if you don't understand the core
00:19:34
Speaker 2: business because I don't think you can. Like I said,
00:19:37
Speaker 2: either you are wanting to build a portfolio
00:19:41
Speaker 2: that you have to be a sector agnostic. So for us,
00:19:43
Speaker 2: we actually identify our companies into what we call deep tech,
00:19:47
Speaker 2: high tech, enabled and consumer.
00:19:50
Speaker 2: Between those we are invested in some 25 to 30 sectors.
00:19:54
Speaker 2: I'm not going to recommend to any investor to say
00:19:56
Speaker 2: only do deep tech or consumer because you understand you
00:20:00
Speaker 2: have to go across and it's a mix of some
00:20:04
Speaker 2: you will understand. Like I said again, let's look at
00:20:06
Speaker 2: a 50 company portfolio, maybe of that about, say, five
00:20:10
Speaker 2: or 7 10. You really understand others You you understand
00:20:14
Speaker 2: a little bit, but your intuition says, Yeah, this looks good,
00:20:17
Speaker 2: but I will invest because others are investing.
00:20:20
Speaker 1: So let's say, when we speak about volatile assets fundamentally,
00:20:24
Speaker 1: as an asset class, how is Angel investing different from
00:20:27
Speaker 1: something like crypto, Given that there is a perception of
00:20:32
Speaker 1: high volatility in both
00:20:34
Speaker 2: sectors, so look, two things
00:20:39
Speaker 2: Crypto
00:20:41
Speaker 2: is a derived asset doesn't have intrinsic value. It is
00:20:47
Speaker 2: like any currency where it is going to derive its
00:20:50
Speaker 2: value the same way any other currency moves. I don't
00:20:53
Speaker 2: know how many people will actually buy in. What is
00:20:56
Speaker 2: the value? Is there enough liquidity? And it's a very liquid.
00:21:00
Speaker 2: It's a thing.
00:21:01
Speaker 2: It's a derived value asset very different from the early
00:21:05
Speaker 2: stage venture space or startup space. Now, startups, if I
00:21:10
Speaker 2: actually wanted to apply analogy so that you we actually
00:21:15
Speaker 2: grasp what we are dealing with. It's a very, very
00:21:19
Speaker 2: basic thing of what happens in nature. If you will
00:21:23
Speaker 2: take like a fist full of oak tree seeds and
00:21:26
Speaker 2: you just throw it, what is the potential of
00:21:31
Speaker 2: how many oak tree seeds will actually take?
00:21:34
Speaker 2: Actually catch the ground? And it was, that's where those
00:21:37
Speaker 2: terms come, right seed and whatever. But how many of
00:21:41
Speaker 2: them will actually grow into oak Oak tree seeds? So
00:21:43
Speaker 2: these are real businesses being built? The question is on
00:21:48
Speaker 2: saying how many of these efforts will actually translate into
00:21:51
Speaker 2: coming giants, which is very different from
00:21:55
Speaker 2: because of that? I think actually, startup startups are not.
00:22:01
Speaker 2: It's not an industry. A lot of times it's not
00:22:04
Speaker 2: an industry. It is every business being built, including it's
00:22:09
Speaker 2: every business being built. It's just a function of the
00:22:12
Speaker 2: state at which you're catching. Like I keep saying that
00:22:15
Speaker 2: we keep talking this number of India becoming a 10
00:22:17
Speaker 2: trillion economy. I think the number is seven trillion by 2030.
00:22:22
Speaker 2: My bet is that half of that will be built
00:22:25
Speaker 2: by companies that are not even born today.
00:22:28
Speaker 2: So that's the That's what you're funding, not a derived asset.
00:22:32
Speaker 2: So two very different things in terms of the risk matrix.
00:22:36
Speaker 2: I'm not a a crypto investor like I invest, but
00:22:40
Speaker 2: I'm not a very active crypto investor. So in my head,
00:22:43
Speaker 2: the risk is more on the crypto side. I'm sure
00:22:45
Speaker 2: if you will ask a prolific crypto investor, their their
00:22:48
Speaker 2: risk perception will be different just because they understand it. But, yes,
00:22:51
Speaker 2: both these assets need very deep understanding and somebody to
00:22:56
Speaker 2: do this
00:22:57
Speaker 2: day in, day out, breathing. So, like
00:23:01
Speaker 2: I would not be investing in this if I wasn't
00:23:03
Speaker 2: reading this day and day. If
00:23:05
Speaker 1: I'm a first time investor, how do things get streamlined
00:23:08
Speaker 1: for me? If let's say I were to come to
00:23:11
Speaker 1: a fund or a network or a network like yours,
00:23:14
Speaker 2: several things I think it's the full chain.
00:23:17
Speaker 2: OK, starting from the number of deals that you will
00:23:20
Speaker 2: see
00:23:21
Speaker 2: there. Is this in this at this stage where you
00:23:23
Speaker 2: invested there is this concept called selection. Bias is basically saying,
00:23:29
Speaker 2: How many companies are you actually seeing and how many
00:23:32
Speaker 2: are you liking out of it now? if you see
00:23:34
Speaker 2: 10 and you invest in five, you know you are
00:23:37
Speaker 2: investing in those five because you've seen only 10, whereas say,
00:23:41
Speaker 2: for a platform like ours, we see 500 deals a month.
00:23:44
Speaker 2: So just the sheer volume
00:23:47
Speaker 2: changes kind of thing. And it's one is, of course,
00:23:50
Speaker 2: because we are a platform. Second is look, today there
00:23:53
Speaker 2: is huge competition in the market just to fund founders also.
00:23:57
Speaker 2: So if you're an individual investor, why will somebody come
00:23:59
Speaker 2: to you
00:24:01
Speaker 2: unless you are like data and you need to reach that?
00:24:05
Speaker 2: So that's number one second day is just the curation
00:24:08
Speaker 2: that we would do or any other platform would do.
00:24:10
Speaker 2: For example, I mentioned the 500 number from that 500.
00:24:15
Speaker 2: Our internal team brings that down to 20
00:24:18
Speaker 2: so 2%. So you imagine you otherwise had to. If
00:24:22
Speaker 2: you have to do it on your own like you
00:24:24
Speaker 2: have a team of 22 people doing just this day in,
00:24:27
Speaker 2: day out versus so that's the second piece. The third
00:24:30
Speaker 2: is the teaching of the day. It's we think it's
00:24:34
Speaker 2: just valuation, which is of course, a big part. Which instrument?
00:24:39
Speaker 2: What rights. What documentation? That whole piece. What did you
00:24:43
Speaker 2: negotiate for et cetera, et cetera.
00:24:46
Speaker 2: That is the third piece that comes with our platform. Then,
00:24:50
Speaker 2: of course. You know this. Like I mentioned earlier, coveting
00:24:53
Speaker 2: with other people, so constantly jamming with others, saying Is
00:24:58
Speaker 2: this good? Not good et cetera, et cetera. Then, of course,
00:25:01
Speaker 2: monitoring of the portfolio to see, Like I mentioned, beginning
00:25:04
Speaker 2: that if the
00:25:06
Speaker 2: minimum wait time for you to be able to exit is, say,
00:25:10
Speaker 2: 3 to 5 years minimum take much longer.
00:25:15
Speaker 2: How will you monitor all of this on your own?
00:25:17
Speaker 2: This gets monitored by a platform. Also, when the exits happen,
00:25:22
Speaker 2: you're right. That whole thing. So basically, you end up
00:25:25
Speaker 2: with the platform.
00:25:27
Speaker 2: All you're doing are two things. One is you. Continuously
00:25:30
Speaker 2: keep enhancing your skill set
00:25:33
Speaker 2: in the asset class. And secondly, you just point and say,
00:25:37
Speaker 2: I want to invest in this the rest for me,
00:25:40
Speaker 2: which is. And if you did this on your own,
00:25:42
Speaker 2: even if you did this with, say, five friends between
00:25:45
Speaker 2: the five of you, you will have to do all this,
00:25:47
Speaker 2: which means somebody has to be doing this full time.
00:25:50
Speaker 1: So it's like a concierge service versus you are buying
00:25:54
Speaker 1: it in your bedroom or what got it. What's your
00:25:58
Speaker 1: take on this new trend of content? Creators turning investors.
00:26:02
Speaker 2: See, I think it's a kind of a model where,
00:26:07
Speaker 2: and this is something that I've seen in different formats earlier. Also,
00:26:11
Speaker 2: I've seen tech companies, So if you're a software company,
00:26:15
Speaker 2: you will start incubating or taking part in a 10
00:26:20
Speaker 2: of companies. Yeah, same thing where you will then or
00:26:23
Speaker 2: if you are a larger consumer brand. Or if you
00:26:26
Speaker 2: have a marketing or a distribution strength in consumer,
00:26:30
Speaker 2: you could get 10 consumer. You could become this whole
00:26:33
Speaker 2: thing of people knowing how to share. Cloud Kitchen is
00:26:37
Speaker 2: a very is a thing where you say I have
00:26:39
Speaker 2: the space. I have the understanding I will get this.
00:26:42
Speaker 2: It's the same thing.
00:26:44
Speaker 2: The question is, I always ask this question is saying,
00:26:48
Speaker 2: Do you really understand how to scale it or are
00:26:51
Speaker 2: you experimenting? If you're experimenting, it's better off to let
00:26:55
Speaker 2: you know. Let the founder do the experimentation with independent money.
00:26:59
Speaker 2: If you really want to do this, you should have
00:27:02
Speaker 2: the platform ability to be able to get somebody to
00:27:06
Speaker 2: become 10.
00:27:08
Speaker 2: Yeah, in a much shorter span of time than they
00:27:11
Speaker 2: would do it on their own.
00:27:13
Speaker 2: Anything like otherwise. It's it I. Otherwise I don't think
00:27:16
Speaker 2: it can scale or make money. And then also you
00:27:19
Speaker 2: should have the fundraising ability, right? You should have the
00:27:22
Speaker 2: ability to say, OK, I'm doing this. I will come
00:27:26
Speaker 2: in
00:27:26
Speaker 2: a because I will come in. You will have a
00:27:28
Speaker 2: brand appreciation and B, I will be able to go
00:27:32
Speaker 2: and talk to the next investor, come to Mumbai Angels
00:27:34
Speaker 2: and say, Listen, I'm here. Can you raise money for this?
00:27:37
Speaker 2: So you are actually going there and saying that I'm
00:27:40
Speaker 2: your multi player If you don't have it, I don't
00:27:43
Speaker 2: think it makes sense.
00:27:45
Speaker 1: Got it? And that sort of brings us
00:27:48
Speaker 1: to a very important question, which is apart from the money.
00:27:51
Speaker 1: What other X factor does an angel investor bring? Very
00:27:56
Speaker 2: interesting question, because if you ask an angel investor with
00:28:00
Speaker 2: our investors or one of the first things, they'll say,
00:28:04
Speaker 2: we would like to mentor. Unfortunately, if you talk to founders,
00:28:08
Speaker 2: nobody wants to be mentored. So founders are looking for
00:28:11
Speaker 2: two very specific things. One is
00:28:15
Speaker 2: the ability to raise money in the next round. So
00:28:17
Speaker 2: are you. Do you have the ability to go out
00:28:19
Speaker 2: there and raise money for us? And B, Do you
00:28:22
Speaker 2: have the ability to bring saints? It's both connected to.
00:28:26
Speaker 2: Like I said, the multipliers and an investor will add
00:28:30
Speaker 2: primary value only with
00:28:33
Speaker 2: these two things. The secondary values. OK, then the third one.
00:28:37
Speaker 2: If you are a known name, if you are a
00:28:39
Speaker 2: brand
00:28:41
Speaker 2: in your own,
00:28:43
Speaker 1: it's a name dropping. Yes,
00:28:45
Speaker 2: yes. So, for example, if you have that kind of
00:28:48
Speaker 2: a name, either as an institution or an individual, that
00:28:51
Speaker 2: also adds value. Beyond that, I think
00:28:56
Speaker 2: this whole business of being able to work with the founder,
00:28:59
Speaker 2: get them to understand paper, et cetera. It's a very
00:29:02
Speaker 2: individual and a trust building exercise that happens over a
00:29:05
Speaker 2: period of time.
00:29:06
Speaker 2: There are investors who reach that stage, but it's we
00:29:10
Speaker 2: need to know that it's an arduous centre trust building process.
00:29:14
Speaker 2: It won't just happen one day because you've put money
00:29:18
Speaker 2: or you are on the board. That's
00:29:19
Speaker 1: so either you bring in sales, so, you know, distribution
00:29:23
Speaker 1: of some sorts, or you're bringing in that name dropping ability,
00:29:27
Speaker 1: the street that a founder can then potentially to, or
00:29:31
Speaker 1: you're helping them. Fundraise. These are the three most tangible benefits.
00:29:36
Speaker 1: There are cases I've seen with founders who are building
00:29:40
Speaker 1: something that they don't see to be highly scalable. They
00:29:45
Speaker 1: see a capital requirement for, let's, say, one CR to
00:29:49
Speaker 1: be able to hire a small team, but they still
00:29:51
Speaker 1: realise that the market opportunity is not $10 billion.
00:29:54
Speaker 1: So in those sorts of cases, does it make sense
00:29:58
Speaker 1: for a founder to even come to an angel? Given
00:30:01
Speaker 1: that they might not look to raise a round after that?
00:30:06
Speaker 1: And they are just exclusively looking for that amount of
00:30:09
Speaker 1: money to be able to take off
00:30:11
Speaker 2: so two parts to the question one is, I'm very clear.
00:30:15
Speaker 2: You should never raise money till you actually need it.
00:30:18
Speaker 2: I know it's strange coming from me, but don't raise
00:30:21
Speaker 2: money till you really don't do it because you know
00:30:24
Speaker 2: it's not a pride thing. It's not stars on your shoulder.
00:30:28
Speaker 2: It's actually bringing in
00:30:30
Speaker 2: a very strong voice on the table. We absolutely sure
00:30:34
Speaker 2: you want somebody sitting on the table, and you might
00:30:37
Speaker 2: or might not get along with that person. Or, more importantly,
00:30:40
Speaker 2: your ethos and the investors ethos might not match. So
00:30:43
Speaker 2: you should be very clear on what your Secondly, this micro,
00:30:47
Speaker 2: I think, is very interesting because we've actually been looking
00:30:50
Speaker 2: at this sector. I actually think that not all founders
00:30:55
Speaker 2: should aim to build
00:30:57
Speaker 2: billion dollar companies or 100 million funding not needed. If
00:31:02
Speaker 2: you are, you have to figure out what's your skill set.
00:31:05
Speaker 2: If your skill set, just think about it. If your
00:31:08
Speaker 2: skill set is to be able to raise $100 and
00:31:14
Speaker 2: grow something within 23 years can be sold for a
00:31:17
Speaker 2: million dollars outcome. No, What's the problem?
00:31:22
Speaker 2: Why why are we so obsessed on saying we have
00:31:26
Speaker 2: to build big? We have to know if maybe your
00:31:29
Speaker 2: skill set is UH, 0 to 10 and you will
00:31:32
Speaker 2: do this multiple times over. It's a fabulous space to
00:31:36
Speaker 2: be in. You need to understand as a founder what
00:31:38
Speaker 2: your strengths are. And if that is a thing, if
00:31:41
Speaker 2: you're being able to put that thing out very boldly,
00:31:44
Speaker 2: very clearly, that look my aim is not to become
00:31:50
Speaker 2: 100 core valuation company. My aim is to grow this
00:31:54
Speaker 2: to
00:31:55
Speaker 2: a 10 valuation and sell
00:31:57
Speaker 2: right, but your money is going to go in times
00:32:00
Speaker 2: 20 times in three years time. Fabulous outcome.
00:32:03
Speaker 1: Got it and last question. And when is the right
00:32:07
Speaker 1: time to approach an
00:32:09
Speaker 2: It depends on who you want to approach. OK,
00:32:14
Speaker 2: so, for example, if you are looking to approach people
00:32:18
Speaker 2: that you know and who come from the segment, then
00:32:21
Speaker 2: you can even go at the idea stage. You can
00:32:23
Speaker 2: go at the pre MVP. You can even go nowadays
00:32:26
Speaker 2: in India, there are enough accelerators and who are willing
00:32:31
Speaker 2: to come in at the pre revenue stage, which I
00:32:33
Speaker 2: think is a very good development in the country. So
00:32:36
Speaker 2: that's where you go with an idea or a pre MVP,
00:32:38
Speaker 2: et cetera,
00:32:40
Speaker 2: or platforms which are, uh, sector agnostic. Larger platforms like, say,
00:32:46
Speaker 2: something like ours coming at a pre MVP for sale
00:32:49
Speaker 2: consumer product. It won't fly because we want to see.
00:32:54
Speaker 2: So if it's a B to B, it's a A.
00:32:57
Speaker 2: It's a platform marketplace content. Any of these we would
00:33:01
Speaker 2: want you to have an MV PM VP with a
00:33:03
Speaker 2: very clear path on saying, if you are going to
00:33:06
Speaker 2: raise a two grows with us, how long will it
00:33:08
Speaker 2: last
00:33:10
Speaker 2: and where will it get us? So those are the
00:33:12
Speaker 2: two questions we are asking.
00:33:15
Speaker 1: This was amazing. Nandini, thank you so much for taking
00:33:18
Speaker 1: time out.
00:33:19
Speaker 2: Thank you. Thank you for having me.
00:33:26
Speaker 1: Thank you for tuning into the U Incorporated podcast with me. Second,
00:33:30
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00:33:47
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00:33:51
Speaker 1: you on the next episode.