Angel investors gaining popularity in the market

Angel investors provide capital to potential startups in exchange for a piece of the company, which is in the form of equity or royalties. In the early phase, Angel Investors, as the name suggests, provides support and help to startups to make recognition in the market through such investors. In recent times we have experienced the rise of startups and the number of investors investing in start-ups. However, every startup is not able to make benefit from the investments made by Angel Investors. After evaluating the plan and structure of the startup, Angel Investors takes the risk of investing, believing in maximum profit in return in the coming times from the startup. With the risk involved, Angel Investors put their confidence in startups for potential upside, and the rewards of investing outweigh the dangers. They take into consideration the founder and the management teamwork, their ideas, and the opportunity Angel investors will get in the market through the startup products and services.

How to Find an Angel Investor

During the Pandemic, the shift towards digital mode can also be counted as the main reason for the rise of Angel Investors. Having easy access to the internet has made it easy for investors to invest in startups from any part of the world or country. According to the study done by LetsVenture, an online investment platform revealed the growth of investors from the smaller cities like Guwahati, Kanpur, Vadodara, Raipur, Visakhapatnam, Agra, Chandigarh, and Jaipur. Investors from these cities are interested in putting their fortune for the startups out of the boundaries for Innovative business ideas. Also, Knowing about the recent growth of the Indian startup ecosystem has also sparked interest in investing in startups.

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The Cofounder of Venture Catalysts & MD of 9Unicorns Accelerator Fund, Apoorva Ranjan Sharma said, “It is our endeavor to create a robust network of angel investors beyond the top metros. At present, we have several HNI investors from locations such as Surat, Raipur, or Seoni who are willing to invest in high-growth tech startups.”

As Pandemic put restrictions on movement, businesses set up their base at their viable location, cutting down the travel and miscellaneous expenses, making it feasible for entrepreneurs to explore the investment area.

According to Shanti Mohan, co-founder, and CEO of LetsVenture, “With startups raising larger rounds, going public, getting acquired, etc., the liquidity events in the ecosystem have increased manifold, which has delivered stellar non-linear returns to their investors. This has propelled a higher level of interest from angel investors from tier II and III.”

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Adapting to the current environment, investors, especially from the tier II and tier III regions, can seek information for investment across the country. Mahavir Pratap Sharma, co-founder, and chairman of Rajasthan Angel Innovators Network said, “The WFH and work from anywhere and no travel required has just dramatically changed this in the last one year, which possibly could have taken 4-5 years.”

Also, Investors from such different areas in the countries not only help with financing but are also aware of the regional issues and so guide and help the startup owners to expand and work accordingly, as regional angel investors are well-connected and have a thorough understanding of the local market. The founding member of the Indian Angel Network and co-founder, Padma Ruparel, said that the confidence of local angel investors brings in a more considerable amount of funds for the entrepreneurs leveraging the brand and depth of the local angel. This increases the influence of promoters and peer investors. She also mentioned that IAN, with investors from 12 nations, has invested in India and 6 other countries.

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Though this investment world looks smooth and fancy, but comes with a proportion of issues, with the possibility of over 90 percent of startups failing. So like with most occupations, subject-matter expertise is essential. “Understanding of tech space, reading & learning more and more about various verticals that they want to invest in, have a team of people to provide data analysis, and lastly have the business acumen with an assessment of the current market and future market,” advises Rajasthan Angel Innovators Network’s Mahavir Pratap Sharma.

Angel investors, with time, have started gaining the spotlight as a backup finance source for the startups and now actively establishing themselves in the ecosystem. Angel investors can help a startup develop because many new businesses find it challenging to immediately secure funding from venture capital firms. The Chennai Angels’ K Chandran advising on the matter, said, “Right from screening startups to the elaborate funding process and then waiting years for an exit, it takes immense patience and confidence to be able to withstand the pressures of being an investor.” Highlighting that keeping patience is an important quality that every Angel Investor should have.

Angel investors help bring tech ideas to life | ShareAmerica

Through Angel Investing, many founders have also turned into investors, seeing the growth of the startups in India. The list includes Kunal Shah of Cred, Kunal Bahl of Snapdeal, and participation from Flipkart founders Sachin Bansal and Binny Bansal, who are now actively investing as angel investors for potential startups. Like them, many other successful entrepreneurs have turned to investment as a way to contribute to the ecosystem by giving their time and money to help fledgling businesses succeed.

As Padmaja Ruparel believes, Unlike in the past, today’s entrepreneurs are more willing to take chances and establish new businesses, transforming India into an innovation hub.


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