The Hindu Business Line : Angel Network gets institutional funding

‘There was a time when most start-ups would come up with a BPO; now they are entering segments such as robotics, clinical medical tests, even film production and social networking.’

Preeti Mehra
Anil Sasi

New Delhi, Dec. 2Start-up companies in need of seed capital could look forward to a mega benefactor. Google, IBM, California-based Greylock Partners, Naukri.com, SIDBI, Ojas Venture, and Punjab Venture Capital Fund have been roped in as institutional members by the Indian Angel Network, a group of successful entrepreneurs who invest in start-ups.

The network, formerly known as the Band of Angels, has seen a doubling of its membership to 60 over the last one year, but plans to limit its institutional membership to under 20 per cent.

“No one across the world seems to have institutional members, but we have found that this innovation gives institutions an early window to identify businesses that could complement or supplement them in the future. Typically, they would pick up companies that they can connect with on the business front,” said Mr Saurabh Srivastava, Founder, Indian Angel Network and Chairman of the Indian Venture Capital Association.

For the Angels too it is a blessing. Once their seed investment matures, they have to link up with venture capital firms, which the move can facilitate. Besides, it also creates a kind of hedging for the investments made by individuals, explained Ms Padmaja Ruparel, Vice-President of the Network.

Getting inventive

The Network has also found that lately, start-ups are becoming more inventive in the businesses they market and many more now own the intellectual property rights to the venture. Mr Srivastava said “There was a time when most start-ups would come up with a BPO, but now they are looking at unusual businesses. They are entering segments such as robotics, healthcare treatment, clinical medical tests, even film production and social networking.

And it is precisely this tendency to innovate that explains the interest of institutional members, who are perennially in search of novel ideas. Google, for one, is already an investor in three early-stage venture capital funds — VentureEast TeNet Fund, Seed Fund and Erasmic Fund.

TiE meet

Even the number of individuals looking for seed capital has increased over the years, said Mr Srivastava, adding that in order to further facilitate their link up with investors, they will host Asia’s largest conventions for entrepreneurs later in the month.

The annual TiE entrepreneurial meet is this time round being turned into a summit, with the expectation of a pan Asian presence of 1,500 delegates, both entrepreneurs and investors. Institutional investors too will have their fill of innovations to choose from.