Seed Capital From Angel Investors: Amit Grover, Member, Mumbai Angels (Part 5)

By guest authors Irina Patterson and Candice Arnold

Irina: Nurture Talent workshops are live, right? They’re not online?

Amit: They are not online. We are going to start our online training programs in the near future, but these workshops are completely offline as of now.

Every Saturday we take a conference room and anywhere from ten to thirty people come for these workshops. We spend a full day on going through exercises, question and answer periods, and personal discussion. We guide them on early-stage business concerns and how to proceed.

Irina: Is there a fee?

Amit: Yes, there is a nominal fee of 2,500 rupees, which is about $50, a person.

Irina: Let’s go back to Mumbai Angels. When you invest, do you have any sector preference?

Amit: Our preference is a good team. We have no sector preference. We are sector agnostic. We have invested in companies such as Reverse Logistics, where we liked the team.

We invested in a company called Speakwell English Academy, spoken English training. Speakwell teaches young working professionals in India how to speak in English and they have personal development, interviewing skills, and communication skills for these young people.

We invested in Apalya Technologies, which I told you about. We also invested in a company called Intrends Skin Solutions, a marketing and distribution company for cosmetics. They have come out with a unique proposition for women across India in the form of reasonably priced quality cosmetics, for about $3 to $4. So, our investment decision depends largely on the team and the scalability of the plan.

Irina: When you invest, each angel invests his or her own money, right?

Amit: Yes. Mumbai Angels is a Section 25, not-for-profit company. The investors a common shareholder agreement, and each of them writes a check for $100.000 maximum. We usually take a board seat in the company so that we can guide them on their strategy and advise them on their concerns.

Irina: What type of investments do you do?

Amit: Usually, it is preferred shares. We take liquidation preference, then there are other rights and conditions that are attached to the shareholder agreement. Very rarely do we get into the convertible debt structure. We also do common stock based on the kind of company and the stage of the company.

Irina: How long do you like to stay invested in a company?

Amit: About three to five years, I would say, is the preference of our people, but it is largely dependent upon the business conditions and the team’s outlook. We usually let them decide how long they want to stay invested. Our typical exits have been within two years. There is a VC who has come in and bought us out. That’s how we usually get an exit.

Irina: What is your biggest investment success to date?

Amit: I would say InMobi. This company has given us great returns. Reverse Logistics and Myntra.com have also given us good returns. We see a lot of potential in Apalya Technologies, which has already been funded by IDG Ventures and Qualcomm Ventures. Each of these companies has given us fourfold returns, except InMobi, which has been a blockbuster deal. It has given us more than a ten times return.

Irina: What do you think Indian angels could do to increase their success or increase entrepreneurship in India?

Amit: I would say that it is a lot beyond money that needs to given to entrepreneurs. We need to write checks as customers, and we need to give them time on their boards and help them to hire teams. We need to give them more mentoring and tell them how to develop their businesses and how to develop their personal capabilities for handling scalable businesses.

Angels in India have largely focused on giving the money, but I would say the network that Mumbai Angels brings in is far more important and far more valuable. This is the same for any angel; any angel has to have some outlet by which he or she can devote time and get some references. It could be customer references, or it could be team references for the companies they want to invest in, can invest in, or have already invested in.

This segment is part 5 in the series : Seed Capital From Angel Investors: Amit Grover, Member, Mumbai Angels
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