The guide to angel investment from LetsVenture

Angel investment might look complex for anyone keen to invest through this route, but LetsVentures' handbook, launched at TechSparks 2021, dispels all these notions through a deep dive on the subject.

The Indian startup ecosystem has all kinds of participants, but perhaps the least unknown or celebrated actor is the angel investor, and it is ironical as it is this individual who would have laid the seeds for any new venture or startup.

To create awareness about this class of investors and to guide on how one can go about this path, angel investor syndicate LetsVenture launched a book in a joint initiative with YourStory at TechSparks 2021.

Shanti Mohan, Founder, LetVenture said, “This book is a practitioner guide to angel investing in the Indian sub-context as this needs to be understood from a perspective of domain and geography.”

According to her, the best way to learn anything is to practice and execute what one has learnt over the years.

“Angel investing is a high risk asset class and this book moves away from generic information as it deep dives with real life examples,” said Shanti.

On what makes a good angel investor, Shanti said, there is nothing right or wrong and everything is based on one’s personal experience.

She gave few guiding points for anyone looking to take this path of angel investing. She said, one should not look at returns, but the focus should be on value contribution to any startup that the angel investor has invested in with time, efforts, guidance, suggestion, and also sometimes stepping away.

Secondly, it is about patient capital where there is a very high chance of losing money where angel investors need to extend the empathy to the founders. Lastly, this is also about giving back to the ecosystem.

Though, Shanti said, “Everybody is learning because things are changing so rapidly.”

The book also talks about how one can build a very different private market asset class as there is a general lack of understanding of how the startup ecosystem operates, and so, there is a hesitancy to deploy capital into this segment.

Shanti believes the key factor in angel investing is how does one measure the NPS with the founders as this is a space which is driven by goodwill and references. Once somebody enters into the arena, it automatically creates the deal flow due to the very involvement of the angel investor.

“Every investor’s journey is very personal and we want to bring all the stories in one place through this book,” remarked Shanti.

However, for somebody who does not know anything about angel investment, this might look very overbearing.

“People make angel investing very complex than what it is, while it is actually very simple,“ she said.

She likens this to any other kind of investment that an investor would do -- whether it is in publicly listed stocks, real estate, or gold, where one has to only make the start.

“The vision of LetsVenture has always been to create more transparency in the system and make it more accessible,” said Shanti, and added, “This is going to create non-linear wealth.”

At the same time, there are several challenges associated with angel investment and Shanti believes this ecosystem has not reached a point where it is scalable and also requires breaking out of the box.

As the founder of this angel investing platform, Shanti has seen several examples where founders and investors are sometimes rooted in their particular geography and the lack of it rules out the chance of getting a different perspective.

The key element in the world of angel investment is of trust. “We need to create that pool and network of trust,” Shanti said.

She also emphasised that this class of investment is about patient capital and advised those who want to get into this arena not to take too much time in making the investment decision. “Respect the time of the founder and the co-investor,” she remarked.

Given the energy in the Indian startup ecosystem, Shanti strongly believes it is never a better time to be a founder in India and this decade belongs to them.

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Edited by Megha Reddy