Finding An Angel Investor: How to Find Angel Investors?
One of the most common questions that first time entrepreneurs have is – “How to find angel investors”. Angels are an essential source of finance for startups primarily for two reasons: First, for the fund amount they provide to the startups. And second, the growth stage at which they offer such funds. Typically, early-stage startups rely on angel investors and seed funding. An angel is an individual who provides capital out of his own funds to a private business owned and operated by someone who is neither a friend nor a family member. The capital can be either in the form of debt or equity.
Angel investing has gained momentum, all thanks to the emergence of online portals, angel groups, and networks. As per a survey, 56% of the respondents believe that the deepening angel syndicates’ activity has had a positive impact. Most early-stage investors feel that the emergence of angel syndicates has been positive for the overall ecosystem.
In the year 2021 alone around 450+ angel funding deals (as of November 2021) were recorded in India, representing a 15% annual increase as compared with 382 deals in 2020. The total volume of seed-stage investments, on the other hand, touched $519 million as on October 2020 across 276 deals in the ongoing calendar year.
Despite the positive impact, the world of angel investing had been posing a key challenge. The challenge is the high cost involved in terms of investors and entrepreneurs locating each other. However, this challenge has been resolved with the formation of angel networks. These networks bring entrepreneurs and investors together via angel portals. Such matching services have enhanced the efficiency of the informal equity market.
Furthermore, it has led to improving the visibility of investors and entrepreneurs to each other, improving the deal flow, and augmenting the availability of capital.
If you’re wondering about how to find angel investors in India, then this article is for you.
1. Start With CXOs of Tech Companies
Traditionally, the wealthy individuals hailing from industrial family backgrounds invested a portion of their wealth in startups that their friends or acquaintances wished to establish.
However, a new class of investors who were not a part of the traditional industrial families joined the angel bandwagon. These were the first-generation entrepreneurs who had cashed out as well as the wealthy corporate executives who turned to angel investing.
The most active of all the angel investors in this category are the first-generation entrepreneurs. These entrepreneurs have been successful themselves and hence seek great investment opportunities to expand their portfolios.
Then, the wealthy corporate executives use their severance or early-retirement pay from their prior senior management positions to invest in great entrepreneurial opportunities. Such executives seek opportunities that provide them with a new senior management job in the investment. Further, such executives intend to remain involved in one investment at a time.
Besides the first-generation entrepreneurs and wealthy corporate executives, there are fewer professional angels called enthusiast angels. These angels invest in businesses as a part of their hobby and hope that to have an IPO. Typically, such angels do not actively participate in their investments.
As per the 25th edition of the World Wealth Report of Capgemini, the growth in the number of High-Net-Worth Individuals (HNWIs) in India increased at 5.9 percent in 2020. This rate surpassed the HNI growth rate of 5.8 percent in the Asia-Pacific region.
The report defined HNWIs as those individuals who had investable assets of $1 million or more. This did not include primary residence, collectibles, consumables, and consumer durables. Further, the report defined Ultra-HNWIs as those individuals who had investable assets of $30 million or more. Whereas, millionaires next door were those who had investable assets between $1 million and $5 million. In addition to this, the report also defined mid-tier millionaires as those individuals who had investable assets between $5 million and $30 million.
The following is the list of top active angel investors in India who are the CXO’s of some of the best tech companies in India.
Top Angel Investors in India
|S.No.||Angel Investor||Role||Past Investments|
|1.||Sachin Bansal||Co-founder Of Flipkart||Tracxn, Unacademy, Inshorts, Ather Energy, Sigtuple, SpoonJoy, Plabro Networks|
|2.||Rajan Anandan||Managing Director of Google India||Instamojo, Travelkhana, Explara, Social Cops, Letsventure, LBB, PopXo|
|3.||Anupam Mittal||Founder & CEO of People Group||HackerEarth, Drivezy, Kae Capital, Letsventure, Ola Cabs, Truebil, myHQ|
|4.||Girish Mathrubootham||CEO of FreshWorks||Whatfix, The Ken, Innov8, GoBumpr and iService, Unacademy, Factor Daily, Inkmonk, The Ken, Zarget|
|5.||Binny Bansal||Co-founder of Flipkart||Flipkart, CureFit, Avail Finance, Roposo, Nymble Labs, Sigtuple|
|6.||Kunal Shah||Founder & CEO of CRED||Inc42, Razorpay, Unacademy, Innov8 Coworking, ShaadiSaga, Pianta, Cookifi, Bharat Bazaar|
|7.||Sunil Kalra||Independent Angel Investor||Hasti Dry Port, Uttkarsh Micro Finance, Exclusively.in, Jigsee, Viavya Labs, Innovise, Sapience, MyShaadi.in, BuythePrice.com, Kwench, Stelae Technologies, Peelworks, OrangeScape, Unbxd, Instamojo|
|8.||Sharad Sharma||CEO of Yahoo||Frrole, Mobilewalla, HashCube, Druva Software, Kwench Library Solution, Vayavya Labs, Unbxd, Consure Medical, Aurus Network Infotech Pvt. Ltd|
|9.||Kunal Bahl||Co-Founder and CEO of Snapdeal||Tripoto, Tiny Owl, Bewakoof, Gigstart, Olacabs, and Unicommerce|
|10.||Krishnan Ganesh||CEO of TutorVista||Must See India, SilverPush, HackerEarth, Oximity, Overcart, Browntape, delyver.com, Onlineprasad.com|
2. How To Find Angel Investors – Use Angel Networks
Angel Networks refer to a group of individual angels who acquire formal membership of such a network. As a member of the angel network, they can participate in transactions even if they have small sums of money to invest as individual angels. Furthermore, they can participate in the transactions even if they operate from geographically remote locations.
There are a host of other benefits that angel networks provide to their members. These include:
- Improved deal flow
- Increased funding amount bridging the gap between individual angels and venture capitalists
- Efficiency in deal sourcing and investment valuation processes
- Investment through remote geographies
- Flexibility in channeling funds
There are either online or offline angel networks. These angel associations offer their members economies of scale in the entire investment cycle, right from deal generation, and evaluation to deal documentation. Further, few of these networks allow their members to invest nationally and internationally in the enterprises that they wish to invest in.
The network seeks deal flow either via positive publicity or network members. Then, the network members assess funding proposals that they come across. In addition to this, the network members may create startup opportunities with the entrepreneurs.
Further, the suggested opportunities are presented at the Network’s monthly forum. Such deals are called sponsored deals. This is because it is the members who recommend such deals as they consider them worthwhile taking forward. In addition to the sponsored deals, there are direct deals handled via an Elevator Pitch (EP) session and shortlisted for presentation.
Thus, deals directly sponsored or shortlisted via an Elevator Pitch (EP) session are then discussed in network meetings conducted every four to eight weeks, depending on the deal flow.
Each deal is discussed with regard to deal valuation, structure, and closure with the entrepreneur. Finally, when the deal is selected, all the members of the network collectively commit their funds, time, and expertise to the business.
The following is the list of more active angel networks in India.
How To Find Angel Investors: Top 10 Angel Networks in India
|S.No.||Angel Network||Founded||Location||Past Investments|
|1.||Indian Angel Network||2006||Delhi||FabAlley, PrettySecrets, WOW! Momo, Get My Parking, LawRato.com|
|2.||Venture Catalysts||2016||Mumbai||SIFTR, vPhrase, ConfirmTkt, LenDen Club, Vahanalytics, Beardo, Innov|
|3.||Lets Venture||2013||Bangalore||Classplus, Trell, Porter|
|4.||Lead Angels Network||2014||Mumbai||ShopKirana, DriveU, Planet SuperHeroes|
|5.||Mumbai Angels||2006||Mumbai||InMobi, Tala, NowFloats|
|6.||AngelList India||2018||Delhi||Open Financial, BharatPe, Third Wave Coffee Roasters Jupiter Bank, Tapchief, Yulu|
|7.||CIO Angel Network||2015||Mumbai||InstaSafe, Pay Tunes, Aisle, Codemojo|
|8.||The Chennai Angels||2007||Chennai||Purplle, Chai KIngs, Ketto, GoBumper, Get My Parking|
|9.||Hyderabad Angels||2012||Hyderabad||NowFloats, Innovapptive, ZineOne|
|10.||Ah! Ventures||2012||Mumbai||Testbook, Inc42, Ketto, Wigzo, iDreamCareer, Eywamedia, Origa Leasing, Aha Taxi|
|11.||Keiretsu||2015||Chennai||Planys, Spintly, Impensus, Konwert, Detect Technologies|
|12.||Delhi Angel Network||Delhi||Nucros Science and Taste|
3. LinkedIn – An Active Source For Angel Investors
LinkedIn is the largest professional social media platform in the world through which an increasing number of startups have raised funds partially or fully. It’s a good platform for startups who want to raise funds for their seed or pre-seed round.
Further, it is at this stage of a startup that angel investors would be willing to invest funds. By reading the profile of the co-founders of a business, the angel investors will get an opportunity to understand their professional background and how relevant is the startup to them.
In addition to this, the angel investors also get a chance to go through the connections of co-founders. Thus, such a type of scrutiny helps them in doing a quick reference check.
Thus, founders seeking to find angel investors for their venture via LinkedIn must follow a proper approach. For instance, instead of sending them cold emails, they must first try and find a mutual connection on LinkedIn. Such an approach will help the founders in getting an initial introduction with the angel investor by a mutual connection.
The founders must ensure that the message is short explaining the team’s background and what it intends to do. Founders should not directly add angel investors directly into their connections.
There are a host of groups of angel investors on LinkedIn who help registered LinkedIn members to raise money in order to finance their entrepreneurial activities.
Angel Investor Groups On LinkedIn
|S.No.||Angel Groups On LinkedIn|
|1.||Startup Network India|
|2.||Startup Specialists Network|
|3.||Angel Investor Group|
|4.||Angel Investors and Entrepreneurs|
|5.||Startup and Entrepreneurs Network|
|6.||Startup Business and Entrepreneurs Network|
|7.||Global Investment Network|
|8.||India Investment Network|
|9.||Small Business & Startup Deal Flow|
|10.||Startup Founder & Entrepreneur Network|
|11.||Startup Entrepreneurs’ Network Of India|
|12.||EdTech Startup Network|
4. Startup and Entrepreneur Communities
One of the most common strategies on how to find angel investors, is becoming part of startup and entrepreneur communities. These communities bring together entrepreneurs, investors, and partners throughout India and across the globe. The primary objective behind forming such ecosystems is to help new and growing startups.
The community members connect with a host of stakeholders. These include co-founders, startup team members, mentors, advisers, incubation facilities, agencies in seed funding, crowdfunding, and high net worth individuals.
The startup ecosystems and communities seek to build partnerships with organizations that play a significant role in building entrepreneurial activities in India.
The following is the list of startup communities in India that can help founders seek funds from angel investors.
Top 10 Startup Ecosystems or Startup Communities in India
|S.No.||Startup Ecosystems||Past Investments|
|1.||Headstart||Connect different stakeholdersGet senior entrepreneurs to mentor the next generationMake funding accessible to early-stage entrepreneurs|
|3.||Indian Startups||Connect with stakeholders including agencies in seed funding, crowdfunding, high net worth individuals, mentors, incubation facilities, and moreReach out to remote cities & towns to extend startup help|
|4.||eChai||Hosting engaging Startup Growth meetups in 20+ CountriesCurated introductions with startup founders, investors, startup ecosystem enablers|
|5.||Pushstart||Get introductions with top startup founders and investors across India|
|6.||10,000 startups||An initiative by NASSCOM to scale up the startup ecosystem in IndiaEnable incubation, funding, and support for 10,000 technology startups in IndiaFoster entrepreneurship, build entrepreneurial capabilities at scale, and strengthen early-stage support for tech startups|
|7.||Nordic Hub India||Connecting startups, incubators/accelerators, innovation hubs, government, organizations, investors, and industryGive access to exclusive info on the Nordic-India entrepreneurship sceneCurate a list of business and investment opportunities|
|8.||Startup India||Allows startups to network, access free tools & resources, and participate in programs & challenges|
5. Networking Events
The angel networking events bring together the HNI or angel network and showcase opportunities to invest in the best startups. It brings together leading investors and experts from the Indian Startup ecosystem to facilitate the networking event to great success. These events are focused on connecting investment leaders to growth opportunities and disruptive initiatives within the startup community. The following table shows some of the events that are organized by angel and startups associations that help founders connect with the angel investors seeking to invest in growth opportunities.
How to Find Angel Investors: Angel Investor Summits
|S.No.||Startup Events||Organized By||Date|
|1.||Seeding Kerala||Kerala Startup Mission||February 11 – February 12, 2022|
|2.||Techstars Startup Weekend Chennai||Google for Startups||February 25 – February 27, 2022|
|3.||IndiaFirst Tech Start Up||AICRA||February 17 – February 18, 2022|
|4.||TIECon||TIE Global||May 5 – May 7, 2022|
|5.||9th Alternative Investments Summit 2022||Indian Association of Alternative Investment Funds||January 27, 2022|
|6.||Global Investment Summit 2022||Global Startup Ecosystem||April 22, 2022|
|7.||ACA Summit 2022||Angel Capital Association||January 5, 2022|
One of the biggest problems for first time entrepreneurs, is that they do not know how to approach angel investors in India. There are a host of angel investor platforms and networks that help startups find the right investors for their business. The startup founders can search for the right angels by either becoming a member of an angel network or attending angel networking events.
Though finding the right angels through platforms and events calls for a basic fee, these ensure that founders get an opportunity with the right set of influencers.
The founders can also search for angels on professional networks like LinkedIn. These are relatively less expensive ways of connecting with the angels and can help them in reaching the right influencers.