When Angels Meet Entrepreneurs

The year was 1997. This is the landmark year when India started exploring its new interest in entrepreneurship. As part of a business family, I was fully aware of how testing the experience of entrepreneurship could be. Keeping that in mind, with some likeminded friends, I recognised the need to create an ecosystem of entrepreneurs that could collaborate, learn and share their respective journey. This inspired the birth of an Entrepreneurs’ Organization chapter in the region.

The Mumbai Chapter of The Entrepreneurs’ Organization was founded by local entrepreneurs — Vikram Shroff, Neel Raheja and myself — to create a platform for entrepreneurs who need to overcome several challenges to emerge victorious. What started with a handful of members two decades ago has now become a strong network of some of India’s leading business leaders.

Personally, the past two decades have led to tremendous personal and business growth. One of the key milestones in my journey has been meeting Sasha Mirchandani through EO. Both of us were passionate about creating a funding and mentoring platform for early-stage startups. Our aim was to provide them the required support to ensure that they survive the struggle and achieve success. That is when I co-founded Mumbai Angels Network with Sasha. Mumbai Angels Network was the first formal angel investor network in India.

Founded in 2006, Mumbai Angels Network provides a unique platform for startups and early-stage companies by bringing them face-to-face with successful entrepreneurs, professionals and business executives who are interested in investing in new companies. The early days were quite challenging as the Angels took great personal risks backing entrepreneurs. Some of the early bets paid off very rich rewards, however, and driven by this
momentum, the ecosystem started shifting.

One of our early successes was InMobi. Mumbai Angels Network sets a yardstick for angels in India by exiting the investment to a venture capitalist at multiple returns. Today, InMobi is one of India’s most successful “unicorns.” Entrepreneurship has never been celebrated like this before. And with these achievements, we are also celebrating failures, innovation and investing. This is also shown in mainline television shows like “Shark Tank” in India, which airs not only on a business channel, but also on a general entertainment channel.

Furthermore, entrepreneurial finance has changed more in the past five years than the previous 100.

Globally, there can’t be a more exciting era for entrepreneurship and early stage investing than right now. In India, early-stage funding took a new turn in 2015 as investments by angels and venture capital funds rose sharply, both in terms of value and volume. The spur in early-stage investment comes at a time when established Indian startups are continuously raising money, acquiring other firms and slowly joining the small-but-growing list of unicorns. During its decade-long journey, Mumbai Angels Network has invested in more than 100 startups. Angel investing in India has picked up steadily, and the number of investors aware of the dynamics of the asset class is far better now than earlier.

Apart from financial assistance, angel investors play a crucial mentoring role for new business owners, offering hands-on experience and a network of valuable contacts. Also, by pooling smaller sums together into big funding rounds, these groups are able to spread the risk of betting on promising ventures in less-hot sectors. While VC/PE firms target less risky later-stage business startups, angel investors are nearly alone in backing young, fast-growing companies.

Throughout the past decade, another noticeable trend emerged— while entrepreneurs began foraying into uncharted territories, so did angels. While IT tends to be an investor magnet for decades, angels are now even foraying into sectors like biotechnology, healthcare, education and social-impact sectors. So, many more investors and entrepreneurs are seeing the value of companies that lead to financial returns and also make a positive difference in the world. Entrepreneurship is being democratised, and with it, innovation and investing. Failure is no longer a taboo. I cannot wait to see how this entrepreneurial revolution shapes India.

Prashant Choksey is the co-founder of Mumbai Angels Network and co-founder of EO, Mumbai Chapter of the Entrepreneurs’ Organization. What started with a handful of members two decades back has now become a strong network consisting of some of India’s biggest business leaders.