GSF Angel Investing MasterClass - Mar'23
GSF Angel Investing MasterClass - Mar'23
Slides accompanying my talk at the GSF Angel Investing Masterclass (March 2023)
GSF Angel Investing MasterClass - Mar'23
@amitranjan3 months ago
GSF Angel Investing MasterClass
Mar ' 23
- · Tech entrepreneur (SlideShare â IndiaStack)
- · SuperAngel / Expert in angel investing?? Not really!
- - Learning a new skill by trial/error
- · Startups have been life changing for me ⦠pay it forward!
- · Learn vicariously from other smart, ambitious people
- · Money needs a more productive use than banks, MFs â Generate alpha over public markets (ROI expectancy)
- · Return/IRR focused deals (80%)
- · ' GuruDakshina '
- -learn about new, upcoming sector
- -think paying tuition fees for learning
- · 'Be a Good Samaritan' or 'Pay -ItForward'
- · Started 2015-16
- · Angel investing is a side hustle, doing it part time (can ' t devote a lot of time/attention)
- · Over 40 startups -80% seed/angel, 20% Series A
- · Don ' t lead (or take board seats), but available to founders as they want
- · 30% mortality, 20% at par returns, rest 50% in the game
- · Don ' t actively track IRR based on MOIC (paper money!), but likely to beat public mkt returns
- · Startup landscape is broad, you must aim for a 'Circle of Competence'
- · Machines give mechanical advantage, Software gives leverage
- · Thumb Rule for software business â
- Marginal cost of production tends to zero (diminishing marginal cost)
- · SAAS, Consumer, Fintech, HealthTech, Edtech -where software plays pivotal role
- · Accept what you don't know e.g. lending startups
- · 50% Direct deals
- · 50% Syndicates (or other pooled vehicles)
- · Syndicates - remote, no touch, passive, non-engaging (almost like mutual funds investing, or index investing)
- · Direct deals - High touch, ' get into the trenches ' with founders, high emotional involvement
- · Preferably 2-3 members founding team
- · Pedigree vs Raw talent
- -'Pedigree excels at what they're told to do, raw talent excels at what they were not told to do'
- · Approach 'Bottoms Up' v/s 'Top Down'
- · Opportunity 'Blue Ocean' v/s 'Red Ocean'
- · Is the timing right ( any inflexion points )?
- · Evidence of traction or momentum ( Startups live/die by the shape of their growth curve! )?
- · Does team ' get ' distribution ( their secret sauce )?
- · Is team stingy & capital efficient?
- · Are they hustlers & relentlessly resourceful?
- · Did the demo impress ( can they actually build )?
- · Founders 'circle of competence' is key success factor
- · Struggle to give founders behavioural / attitudinal feedback
- · Not leading deals sometimes is a disadvantage
- · Timing the exit?
- · Develop your area of competency -Be good at something that lies in critical path of startup success
- · Develop ability to independently evaluate people, business or technologies. Depending on network, social proof/signal isn't always a good idea
Background
Rationale for Angel Investing?
Why Angel Invest -three types of decisions!
Angel Journey
Sectors in Focus
Angel Deal sourcing
Dynamics / Life Cycles of above two are very diff
Deal Construct
Funding Criterion

Market
Qualifying questions
Valuation Focus?
'You succeed in venture capital by backing the right deals, not by haggling over valuation'
Pitfalls / Mistakes
Suggestions to other angels
Thanks
https://twitter.com/amitranjan https://www.linkedin.com/in/amitranjanprofile/

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