Indian Angel Network upbeat on Israel operations

Abhishek Law Kolkata | Updated on January 11, 2018

PADMAJA RUPAREL, Founding Partner, Indian Angel Network

Founding Partner says the angel investor group is entrepreneur-centric

Delhi-based Indian Angel Network (IAN) is the world’s largest angel investor group. It has investors in 10 countries and has invested across 17 portfolio sectors. In an interview to BusinessLine, Padmaja Ruparel, Founding Partner, who was in Kolkata to attend a Nasscom event, spoke about a fund for which the network is targeting ₹350 crore (with a green shoe option of ₹100 crore), starting operations in Israel and the overall start-up scenario in the country. Excerpts:

What is the logic behind starting operations in Israel?

Our question is why not Israel. Israel has around 8 million people and is a breeding ground for the best technology (companies) which can cater to the gaps in our ecosystem here across sectors. They don’t have a market and we have the market. So it is a no-brainer for this partnership to happen.

Even in areas like defence and cyber security, there can be partnerships. Prime Minister Modi’s visit (to Israel) has been historical and people have opened their arms. We hope that some of the pitches will transform into real deals.

What sectors are you are looking at?

We are looking at sectors such as agriculture, cyber-security and deep tech that includes machine-to-machine.

Can you explain how the ₹450-crore fund will work?

The fund intends to invest in three buckets. The first is the IAN angel portfolio — in every deal the angels invest in, the fund will take around 20 per cent of that round.

The second bucket of companies the fund will invest in will also include IAN portfolio companies that are looking to reach the next level and want to raise $1-4 million. The fund will co-invest with other venture capital funds in these companies.

The third bucket will see the fund invest in non-IAN portfolio start-ups.

Is IAN confident of maintaining the internal rate of return that it has witnessed so far?

We are tracking an IRR of around 32 per cent over a nine-year period. Our failure rate is 15 per cent. But, why we feel confident is because nowhere in the world does anyone do post-investment efforts like we do. We help the company (raising funds) bring in new talent, get them to the next round of funding, give them customer and market access, and give them a new mentor. That is where we can help and make a difference.

Corporate governance issues are being raised against start-ups now. Your comments.

Companies do have issues. But because of the people we have at IAN, we can handhold them. Entrepreneurs often do not understand issues like company law. So we (at IAN) demand quarterly reports. It is not only monitoring. But you are inculcating a spirit of discipline.

VCs normally do their due-diligence before going for the next round of funding. And no company of IAN has ever failed on diligence. That’s where we have created a unique model as an angel (investor) group. We drive both investor returns and are entrepreneur-centric by allowing them to value-add and grow their company.

What is your outlook on the start-up scenario now?

I think start-ups are here to stay. They are going to grow.

Published on July 10, 2017

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