Padmaja Ruparel on the basics at Indian Angel Network - Angel Investing

Entrepreneurs have many doubts and enquiries regarding capital acquisition especially that of seed capital. Indian Angel Network is a leading player in India’s early stage entrepreneurial eco system. IAN is the country’s first and now largest group of business angel investors. IAN has built on a range of partnerships, with an ever increasing deal flow, members being inducted and a dynamic media strategy. The Indian Angel Network is operational at 4 locations, with over 125 angel members and 20 investee companies in India.We found insights into their workings though Padmaja Ruparel the current President of the Indian Angel Network. Her experiences at Xansa India Ltd as Vice President – Corporate Communications and de facto Executive Director of TiE Delhi from 1999 for over 8 years have been instrumental in building the Indian Angel Network. She has also served as Executive Director at TiE Asia and revived the Indian Venture Capital Association.

In the conversation below which is the first of a series on Angel Investments Padmaja has clarified on the basic workings of Indian Angel Network.

Could tell us a bit more on your involvement with the entrepreneurial eco system in India?

Padmaja: I have been in the early-stage entrepreneur ecosystem in India for over a decade now. It was something I did in addition to working for a software company as head of Indian corporate communications strategy. I operational-zed The Indus Entrepreneur’s (TiE) Delhi chapter back in 1998.

From there, I have built it up over the past nine years and helped lay the foundation of an award-winning chapter in the TiE universe. I also helped rejuvenate the Indian Venture Capital Association. About four years ago, I stepped out of my corporate life to operationalize the Indian Angel Network and now focus on it full time.

When we started the organization, it was called Band of Angels, but we soon rechristened ourselves Indian Angel Network, which is how we are now known now. We started off with my nine-year-old laptop and using our investors’ offices, to now having operations in four cities: New Delhi, Bangalore, Bombay, and Pune. We have a team of six people and are looking to expand to other cities in the country. With about 125 investors across the country and overseas, we have more than 20 investee companies based in India and overseas. We’ve had four partial and full exits, the most recent one giving our investors five times [return] over 15 months of investment. And we’ve got a deal flow averaging about 150 deals a month.

What specifics do your angels look for, are you oriented towards a particular industry?

Padmaja: Our angels come from various domains. We are largely sector agnostic but are size specific. Having said that, we are interested in sectors in which our investors have a background or domain expertise. Take something very high-end, such as as nanotechnology, for instance. I think that despite its being a great proposition, we may not have interest in it just because we may not have an understanding of that space. But tomorrow, if we have an investor from the nanotechnology sector who becomes a member, we may just take a punt on a proposition in this space it. It’s really driven by what we can understand, and more than anything else what we can help, mentor, and grow. I think mentoring is the real role of angels, apart from initial small funding that we may do.

What roles do your chapters play in your organizational structure?

Padmaja: We don’t work as chapters and federal organizations as TiE does. For instance TiE, has, I think, more than 50 chapters around the country with each chapter being a separate P&L. We don’t operate like that. We operate as a single body. It’s a hub-and-spoke model. We have the hub in Delhi, and we have spokes with operations in all these other cities. It all feeds in. All our investors across the world have an opportunity to invest, participate, do due diligence, whatever, equally. In that sense, we are a national (and international) body.

What are your sources of investment flow and how does it benefit all those involved?

Padmaja: There are various sources. One is, of course, our own members. For each of them, if you look at our website and go through the profiles of our investors, you can see that they themselves are brands in their own right. So, a lot of entrepreneurs connect with them and send them their plans and, therefore, they send it on because they basically joined the network to help reduce risks, leverage collective domain expertise, and participate in the co-investment process. One source of deals is clearly the members themselves.

In addition, we’ve built, in a very short time, what is probably the most dynamic media strategy in the early stage investing ecosystem here in India. Our own brand building and our media visibility and event participation have created a bit of a push strategy for entrepreneurs to send us plans. And we’ve done some very large business plan competitions.

For example, last year we did about two and that brought us over 12,000 entrepreneurs in 30 days. The other brought us 7,500 in less than a month. And we keep engaging at different levels. So that’s the second source of entrepreneurs coming to us.

Number three is that we’ve now got a very exciting engagement model with investment advisories. That’s become the third model where we get a little more ready-made stuff because the advisories would have worked on them.

And we’ve got our relationship with the Indian Venture Capital Association. They pass on to us entrepreneur plans that are not relevant or not appropriate in terms of investment size or space or geography for the VC funds. That creates still another source of deal flow.

Last, we have a lot of overseas entrepreneurs connecting with us, and that’s how we’ve done a couple overseas investments. That happens because of our engagement on the international front. We are the Indian partner of the UK India Business Angel Network, which [former prime minister] Gordon Brown announced in January 2008. On the British side, there were a group of angel groups and from India, it was one angel group, which is IAN.

We also have taken a leading role in the Asian forum of angel networks. That’s why we get a lot of deals from Singapore, Malaysia, Indonesia, Australia, and even China. We are the founding members of the World Business Angel Association. So, we’ve created a bit of an international footprint that gives us a look into different entrepreneurs from around the world.

Next in the series Padmaja speaks on their business plan competitions and direct bids by entrepreneurs for seed capital.