This post is for first time entrepreneurs who are looking to understand the maze of Indian seed funding options.
If you want to raise a sapling round (after the seed round, but before the series A) then this list is still your best bet.
If you wish to get into an accelerator instead of raising a seed round, there are several options available for you, including the Microsoft Accelerator, but you will still have to raise a seed / early round after going through the accelerator.
Here are some assumptions I make:
1. You have a product that is in either prototype stage or you have an early version.
If you are at the idea stage, then please raise money from friends and family. If you are looking to build a services company, then get customers to give you some money in advance.
2. You have bootstrapped your company and you have <5 people in the company.
3. You are looking to raise < 1 CR or $200K.
4. You are based in India and your market is either India or US.
5. You have some customers either using or trying your product.
The first step to hacking your seed round is identifying your investors and making a list. From my experience I have made a list for you below.
Download the Indian Seed and Angel Investor List.
The second step is to get introductions to these folks and talk about your company.
The third step is to follow through, follow up and follow on. Nothing kills a fund raise more than giving up because the process is hard or long. Raising money is not easy so its not for everyone.
There are 5 options ( or categories) for raising seed round in India.
1. Individual influential angels. There are only about 5 who matter in my experience. Rest are largely followers. Although there are over 250+ individual angel investors in India who are independent (not registered with Angel networks), most of them rely on a lead investor and will typically follow than lead. Vishal Gondal, Sunil Kalra, Krishnan Ganesh, Pallav Nadhani, Vijay Shekhar Sharma, Harish Bahl and Abhishek Rungta are some of the prime movers.There are others who matter such as Alok Mittal and Rahul Khanna of Canaan partner (but more as individual angel investors) but they dont do more than 1-2 deals every year at most.
2. Angel network champions. There are 15 angel networks in India, but the 4 that matter are Indian Angel Network, Mumbai Angels, Hyderbad Angels and Harvard Business School Angels. Keep a lookout for Innovation angels and Chennai angels, but they dont do many deals yet.
For IAN, to hack the system you have to get a lead. There are 3 leads who do possibly 75%+ of all deals – Sharad Sharma of Bangalore, Rajan Anandan of Delhi and Rehan Yar Khan of Mumbai. There are others in each location who lead some deals like Manav of Eka Software and Naga (both are from Bangalore), but if you want to get funded by IAN, these guys have to champion your deal, else things just dont happen.
For Mumbai angels, Sasha Michandani and Anil Joshi matter. Deepak Shahadpuri might also be able to move things. Rest will follow. Get one of these two folks to champion your deal.
For Hyderabad angels, Srini Koppolu matters. Shashi Reddy also does. Rest will follow.
For HBS, Raj Chinai and Ravi Gururaj should be tapped to lead. Given that Steve Lurie’s moved back to SF, dont expect him to champion deals.
For Innovation angels, Shekhar Kirani, Palani Rajan and Rajesh Rai matter.
3. Seed stage institutional investors. There are 7 that matter. Nexus VP, Blume Ventures, 5 ideas, Angel Prime, 500 startups, India Internet Fund and Seed fund.
For Nexus, get help from Sandeep Singhal or Suvir Jain (Mumbai) and Sameer (Bangalore).
For Blume, Karthik Reddy, Adit and Sanjay are key, but Karthik’s everywhere so you are likely to run into him.
For 5 ideas, Pearl Uppal and Guarav Kachru matter.
For Angel Prime, Sanjay, Bala Parthasarthy and Shripathi will make deals, but you have to be in Bangalore.
For 500 startups, Pankaj Jain is in India, based in Delhi.
For India Internet Fund, Anirudh Suri matters.
Seed Fund is an interesting option, who I have been told, (not seen first hand) does seed deals as their name implies, but yet to really hear it from entrepreneurs. Bharti Jacob matters here.
4. US based individual angel investors. If you dont know the US angel investor personally because you have either worked with them before or they know you in any other personal capacity then dont bother. The distance alone makes most them unwilling to invest. This network you should tap only if you know the individual well. Angel List might be a good start.
5. IT services company CEO’s: (of companies doing > 10 CR or $2.5M in revenue). I am seeing more of this category starting (early signs) to pop up.This person has been a 1st generation IT entrepreneur who has built a services company and has been running it for the last 5-10 years. They have the money, expertise, time and energy to mentor and fund new startup founders. I have only seen 2-3 of these folks, but Arvind Jha is an example. If you find more of these please let me know.