Band of Angels, now rechristened Indian Angel Network(IAN) held it’s 1st meeting in Mumbai today afternoon, where 6 businesses presented for raising early stage capital. IAN has now assigned a member to work with each of the businesses to help develop their plan and undertake diligence. Upon completion of these steps, which usually takes a month or two, IAN will either invest, decline, or request the business to revisit later.
With the Mumbai chapter now formally in place, there will be a monthly meeting where businesses can present plans and thereafter work with the team in Mumbai. This is excellent both for businesses in Mumbai/Western India, and for angel investors in this part of India. IAN hopes this will be a significant boost to entrepreneurship in Mumbai/Western India.
What struck me during some of the presentations, is that, founders were spending too much time on presenting product features and not enough on the other aspects necessary for a potential investor to evaluate the opportunity:
1. Team: what are the credentials of the founder and his/her core team? We want to know what kind of a track record of success the team has in the professional and academic level.
2. The addressable market: what is the addressable market for your product? I found that this was not tightly defined by many of the presenting founders. So (for example) if it was gourmet chocolate business for India, the founders were giving stats of the whole world’s chocolate consumption, when instead they should present data on the Indian gourmet chocolate market.
3. The competition: what is the existing and potential competition in your addressable market? This has to be presented with brutal reality.
4. Competitive advantage: what advantage do you have over your competition? Or, why should someone use you and not your competition.
5. Intellectual property: what is the intellectual property that the business will develop, such as brand, technology, processes, exclusive contracts, licenses, etc? A business without Intellectual property may not be able to sustain profitably for very long. On the flip side, especially on technology product you will need to show that you are not violating existing IPs with what you have created.
6. Marketing innovation: what marketing innovations are you undertaking to significantly cut cost of customer acquisition? Often marketing is far more expensive that building a product, and what use is a great product if you can get lots of customers/clients for it. With these in mind, you need to come up with marketing innovations which will significantly cut your marketing cost and carry your limited startup capital further. A few famous marketing innovations: Richard Branson who mastered the photo opp; Sabeer Bhatia who put the “Get your free hotmail” footer on every email; Larry & Sergey with Gmail’s 1GB storage; Kabir Mulchandani with buying out downtime on hoardings (when a hording had no ad on it) to splash AKAI, and paying taxi drivers across India to carry big empty AKAI tv boxes on their carrier to make it appear to people that lots of AKAI tvs were being sold.
7. SWOT: what are the strengths, weaknesses, opportunities and threats of the business? This gives an investor a realistic view of what s/he is getting into.
8. Proof of Concept: what is the proof that the business’ product will be accepted by the market? Are you getting good sales/adoption? Do you have positive testimonials from clients in you addressable market?
If you are presenting to IAN or any investor, please do keep the above in focus and you are sure to get a good response.
- Fire employees who aren’t workaholics… - March 9, 2008
- How did you fund your startup? - February 7, 2008
- IAMAI Entertainment 2.0 - October 20, 2007
this means if you don’t have any team you cannot get angel funding.
what if i only have a great idea or business plan that can work, can i still apply for angel funding or do i need to have more things than idea only.
can anybody tell me? please
Hi RYK,
I am looking for exciting early stage ventures to join in…
Could I get contact points of the people who present their plans to you?
That’ll be really helpful.
Jaspreet, I agree with you that Angel funding is not true Angel funding. It has become more early stage funding than true Angel. Textbook Angel funding is where the investor invested in you simply on face and relationship value. I guess the only people who do that are parents and close family.
The other kind of true Angel is someone who knows you well and knows your industry intimately, he/she can then take a call on whether the proposed plan will succeed. So if you want that kind of funding in Druvaa you’ll need to look for someone who understands data backups business deeply.
Good points Rehan,
Two points which i faced/facing while presenting my BPlan (www.druvaa.com) and which still put me in an chicken-n-egg situation –
1. Sometime while presenting the above mentioned points, the validation/credibility becomes questionable … And the standard discussion which starts from there is that the founder’s are being too overly optimistic…
No idea how to break that 🙁 All i do is .. ask the person why is he thinks so .. and if i can take care of some of his worries, which could prove my point or his.
2. IMO, Seed = Funding _before_ you are a business organization and
POC (Proof of Concept) is not very simple for all business specially at seed level. I guess that the VC who has understanding of the technology or the business should also trust his gut feel rather than just POC. Besides, testimonials can always be bought.
E.g. We showed demos and now been asked to POC at quite some places, but resource and moolah crunch is keeping our wings tied.
For all i know, the company i brother joined as early members (www.xsiego.com) got $60 million before they had the product or a marketing team 😕
But i guess, One who has the Gold makes the Golden Rule.
I think, good information to anyone for presenting business plan to investor and Intellectual property dose matter in any business. Intellectual property is very vast field but in India everywhere and every day can see Intellectual property violation and don’t have any portal on Intellectual property Right’s news & development, inovation and violation all across India. Common People don’t know copyright’s, anti-counterfeits, trade mark violation, Industrial Design Act, patent, Protection of Geographical Indications Act, Biopiracy and India’s Biodiversity Bill. For example: According a 5 year old survey, Nielsen study indicates that turnover of Spurious products in packaged consumergoods industry is around Rs. 2600 crores with Govt. losing revenues of Rs.900 crores in exciseduty, sales tax and octroi. ORG store audit indicates for example that there are 113 look-alikesof Fair & Lovely Cream , 44 of Vicks VapoRub and 26 of lodex and the turnover of thesespurious products is between 5% to 15% of genuine brands and two years back, FICCI estimate has put the annual loss of revenue to the Indian companies in excess of Rs 4,000 crore. Counterfeits violation is not only in FMCG products, counterfeits goods available in pharmaceutical, apparel, automobile parts, designer & branded products, sunglass, shoes, sports goods, books electric and electronic, technology and so on… Enforcement agencies and some companies ivoleved protecting to IPR’s but how can we aware to common man and how can we provide all information on fake products & IPR’s violation, new inovation in market place?