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Sasha Mirchandani is one of the founders of Mumbai Angels, a group of angel investors – wealthy individuals – who invest in start-ups. He is also co-founder of Bangalore Angels.
He is the founder and Managing Director of Kae Capital, a seedfund. Sasha, 40, has a management degree.
He worked in his family company Mirc Electronics (which owns the Onida brand) and had also founded a healthcare focussed BPO and headed the India operations of BlueRun Ventures, an early-stage venture firm. Kae Capital has raised a $25-million fund. In this recent interview in his Mumbai office, Sasha spoke about Mumbai Angels, Kae Capital and entrepreneurship.
Excerpts from the interview:
On Mumbai Angels
Mumbai Angels that Prashant (Choksey) and I co-founded in 2006 has funded 40 plus companies. We have invested close to $20 million. We had eight or nine exits, good exits. Like InMobi, Myntra, Reverse Logistics, anywhere from 3x to 30x. Lot of our companies have raised follow-on capital. Literally, hundreds of millions of dollars have come in after our small initial cheques. We have been very gratified.
Now Prashanth and I have co-founded the Bangalore Angels. We have 15-20 members signed up in Bangalore. There are 150 members in Mumbai Angels.
On the kind of companies that Mumbai Angels invests in
Because we are capital light, we have ended up doing mostly technology investments. InMobi was our first investment. We have done Myntra, Reverse Logistics and Canvera,. Reverse Logistics was not a capital light business, but the entrepreneur was fabulous. He managed to take a small amount from us, grew the business and subsequently raised large amounts of capital. He raised $5 million from Kleiner Perkins and Reliance after our small round and recently raised $40 million.
We look for five things in the companies we invest in. First and foremost, it is the entrepreneur.
Then, scalability of the business, exit path, capital efficiency and key nugget or a differentiator.
The differentiator need not be technology but it could be one large customer, access to a market, could be certain people in the team.
On the size of investment
When we started we were doing $200,000-300,000, but now we have done as high as a million. Generally, we put in from 200,000 to a million dollars. We take anywhere from 30 per cent to 35 per cent.
On how the entrepreneurial ecosystem has evolved since Mumbai Angels was founded
The quality of entrepreneurs is improving by the day. People realise that there is access to capital and, therefore, they feel that if they have a good idea, this is the right time to build a business because money is available.
There are multiple angel groups. We have started the Bangalore Angels. I have started Kae Capital. There is Blume Ventures.
The market is segmented very well. Initially, there were very few independent angel investors. Then you got the angel clubs. Subsequently, venture capital firms and seed funds like mine and Blume etc. There are business accelerators and incubators.
The market is segmenting itself to a level where the entrepreneur can get access to either mentoring or capital. It is a good situation right now.
Entrepreneurs are thinking big and thinking global.
On Kae Capital
We have raised $25 million, it is a seed fund. The idea is to write seed level cheques for start-ups. We do anywhere from $200,000-500,000.
If the company does well, reaches Series A and requires $5 million, we can put another $1 million. And probably another 500,000 in Series B. We can go up to Rs 13-13.5 crore in the life of the company.
It is a similar to angel group or an angel investor, but the difference is we keep on investing. We put three rounds of capital.
We are sector agnostic. We think there is a huge need for these seed funds in the country because the venture capital firms are managing large amounts of capital and for them to do early stage or pre-revenue companies, they can once in a while do it, but generally it is a waste of their time.
We have done about six companies. Anywhere from 20 to 30 per cent stake.
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