In Defence Of My Investment Thesis

An article published on Forbes.com listed me as part of the eight most prominent angel investors of India. It has increased the pipeline of deals multi-fold. I enjoy working with new entrepreneurs but with an ever-burgeoning portfolio it’s difficult to allocate time to everyone.

This note is to respond to criticism that why I did not engage, replied or invest in the deal shared. Hope sharing my investment thesis helps the founders to understand what angel investor look for.

What Angel Investors Look For In Founders

A rock star technology team, founders with exceptional domain expertise. For e.g., LogiNext founders Dhruvil & Manisha are both alumnus of Carnegie Mellon University with deep experience in logistics and big data space.

A technology platform which becomes the infrastructure building blocks of future, i.e. innovation which will be measured in generations.

For e.g., Zippr: it is rapidly building an ecosystem of businesses and governments that are using the new format to communicate addresses for a number of reasons. India is moving towards smarter cities and Zippr will impact a billion lives by solving day-to-day address related problems through innovation.

The WOW factor. A unique product with an unfair advantage of intellectual property. For e.g., AdstringO compresses image, PDF, audio, video files by 90% without any quality loss. It has created the world’s fastest endpoint compression algorithm IP which means that on mobile itself, files are compressed at source.

A very large market opportunity. For e.g., Box8 India’s fastest growing on-demand food delivery company. Product innovation with All-in-One meal box, which is a fulfilling the new-age Indian meal, convenient to eat anytime, anywhere. Box8’s QSR (Quick Service Restaurants) right now in India is all about limited service and infinite growth possibilities.

Strong brand loyalty to make profits. For e.g., NaturallyYours is a nutrition-based health food brand. The willingness of buyers to pay a higher price for food to be healthier and better for the environment has made it the number one Brand in Organic Food Category on Amazon, with sustained sales momentum.

A market validated business model, technology solution, and an offer customer is willing to use.

For e.g., PayTunes is an interactive delivery platform for audio and visual advertisements as ringtones and banners. Currently delivering more than 4 Mn daily advertisements & reaching out to more than 2 Mn unique users daily.

Hunger for resources and investments to grow. For e.g., Blubirch is a reverse commerce platform with a vision to put assets back in the hands of users. It is looking at transforming the reverse logistics industry with technology to handle dead assets across the full range electronics from mainframe to mobile. The company generated INR 17 Cr in revenue with bottom line profit in its first year.

In Conclusion

Angels investors like myself look to provide funding to startups with small bets rather than trying to pick selected few winners. It is finally the market that determines the winners in the portfolio. We look for founders who are interested in the market rather than product and differentiation.

I do not run a fund. I invest my own money. I am not getting paid by anyone for my time to evaluate, review, and engage with startups.

Even full-time investors like myself have finite bandwidth so please excuse if not replied. Interesting startups will be replied to within seven days of sending the detailed pitch (PDF) via email. Do you have the next big idea for me?

[This post by Sanjay Mehta first appeared on LinkedIn and has been reproduced with permission.]

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