1Mby1M Virtual Accelerator Investor Forum: With Utsav Somani of AngelList India (Part 3)

Sramana Mitra: What direction does the deal flow? Is it the VC’s who are coming to AngelList, or AngelList is chasing these deals?

Utsav Somani: We are the largest tech-enabled cloud platform in the world. We are more of a product company than a service company. Our product are the syndicate products. You go do the work of finding allocations. We’ve seen large institutions bringing their own set of backers but just to clean up the cap table, they pool to one entity. Then we see operator angels. These are people who can’t write large checks. We’ve seen so many personas.

Sramana Mitra: Which of these personas are dominant in India?

Utsav Somani: I think the operator angel is the most dominant category for us. They have good judgment and good access. AngelList is super private. Syndicates are meant to be run as private clubs by the syndicate lead. Unless you’re invited or accepted into that club, you will not see what he’s sharing with his backers. Even then, he can control it to the minutest details that he wants a fintech backer from Bangalore. All of this is so micro-manageable that it makes the process much more controlled.

Sramana Mitra: In terms of sector, what are you seeing? Can you talk about the different sectors that are becoming more visible on AngelList India?

Utsav Somani: We’re seeing a bunch of good fintech companies to be honest. We’re not seeing anything in e-commerce. We’re seeing one in consumer brand play, which is an offline chain of outlets. We’re open to doing all kinds of things as long as it’s behind good capital. We really want somebody else to be that main guiding light before we lend our structure.

Sramana Mitra: The due diligence is happening at the venture capital model. It’s the same model as the Silicon Valley Bank here that lends to startups but only there is a VC already in the deal. That is not true of AngelList in the US. AngelList in the US enter into deals directly without that due diligence.

Utsav Somani: Most of our angel deals have institution capital always. Even in US, we have our own access fund which are index funds. We have an investment committee which gives early liquidity to any syndicate before we even take it out to the syndicate backers. It’s more of a short liquidity when bringing a deal to the table. Rounds in US are way more fast-paced and more competitive than they are in India.

Sramana Mitra: Yes, there are about 700 micro-VC’s operating in the US ecosystem at the moment. It’s a very liquid situation. They’re all looking for good deals. It’s really a story of too much money, too few good deals. What about geography? Is it all just India deals but anywhere in India? Do you just want to do Bangalore deals? What is the contstraint?

Utsav Somani: I don’t think geography has been a concern for us as long as it’s an Indian company.

Sramana Mitra: Let me caveat that though. The VC’s don’t necessarily go too far outside of the five major metros.

Utsav Somani: That’s why we have the largest set of advisors and syndicate leads in all parts of the nation. The obvious ones are covered. We have folks in smaller cities as well. All of these companies end up moving to the large metros because tech talent is not that distributed yet in India. You probably have to shift to Bangalore, Bombay, or Delhi to focus on building a large outcome.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Utsav Somani of AngelList India
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