While raising funding is important for early-stage ventures, entrepreneurs need to be focused on the value angel investors bring to the table, said panellists at TechCircle Startup 2016 - Delhi Edition.
While the startup ecosystem is seeing a funding crunch, angel investments have been on the upswing this year, they said. In 2016, around 369 angel investments have been announced, a 16% rise from last year, though the ticket size of funding has gone down.
Participating in a discussion on 'Angels in the driving seat: How far will this go?', panellists deliberated on how angels can take startups to the next level.
Shaili Chopra, founder of SheThePeople TV, said, "If there weren't angel investors, your ideas won't move. They ensure that ideas don't die at the idea stage itself."
Reflecting Chopra's views, Suraj Vazirani, CEO and co-founder of SaaS startup DSYH, said mentorship is as much important as funding. Vazirani said he would be making his first angel investment next month.
The panellists said while looking for angel investment, entrepreneurs need to ensure that the angel is bringing value to the business.
"I would look at the angels' credibility and what more do they bring to the table â€“ whether customers or brand. Some of our investors have brought us more customers. I don't think a VC could have helped us that much," said Kanika Tekriwal, founder of private jet booking startup JetSetGo.
She said while investing, angels are looking at people behind the businesses and how much they are dedicated to work, more than exits.
According to Naganand Doraswamy, managing director and CEO, Ideaspring Capital, who moderated the discussion, the key aspects that startup founders should look for while dealing with investors include the contacts they sign and how they would behave when things go south. Moreover, angels should be able to take the startup to its next round of funding.
However, Rajesh Sawhney, founder of GSF India, said though the quality of investment is important, it is tough to raise money in the current scenario, and startups have to be realistic about it. "Forget the quality of money—the funding scenario has been brutal. Capital has shrunk in the past six months and many startups have died. So you have to be realistic about money," he said.
Sawhney said angel investors need to ensure that they have the bandwidth and expertise to invest in a company, rather than going by a trend.
"There is a new class of angels â€“ founder angels. I believe they have a lot of value, but they are very busy. So from my prism, it's important that I have the bandwidth and time to devote to them," he said.
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