In today’s business scenario, availing finance becomes very crucial. Most of the micro businesses In India remain micro because they find it extremely difficult to manage capital for their business growth. However, some new ways and prospects for raising capital are also becoming reality for the Indian SME and Startup market. Sushanto Mitra, Founder and CEO of Lead Angels Network explains some latest trends and opportunities for Indian SMEs and startups in the area of raising venture capital. In an exclusive interaction with Faiz Askari, Editor of SMEStreet, Sushanto emphasized on how Lead Angels Network is becoming a great opportunity for growing businesses and he also shared his overview about what all are critical aspects of focus for Lead Angels other than just raising venture capital.
The edited excerpts:
According to numerous industry surveys, research reports, seeking finance or capital for new businesses or even for existing businesses is a biggest challenge. As an industry stakeholder what viewpoint do you have on this aspect? What level of impact can be expected from Lead Angels on this front?
As our byline says “assisting early stage investments’ Lead Angels would like to help develop a transparent & easy way for startups to raise money and at the same time enable investors to invest into companies that they think have potential. We are in some ways a startup to help startups and would like to create a meaningful impact on this challenge in India. Apart from this Lead Angels also engages with students, incubators and academic institutions to help them build an entrepreneurial ecosystem in their colleges and universities that will enable more startups to succeed through workshops and mentoring sessions.
What are the key trends you witness in the startup fraternity?
The number of investors and startups are growing rapidly in India. We think that there is scope for even more growth if we are able to build the necessary ‘infrastructure ‘ for this to happen. The infrastructure here is the overall ecosystem of incubators, mentors, advisors as well as investors. Specifically as far as investors is concerned, a lot of younger people as well as individuals who are not entrepreneurs themselves are discovering the benefits of having an allocation for early stage investments in their portfolios.
What are the common gaps that you come across in the project reports submitted by Indian entrepreneurs?
While in overall terms the quality of deals has improved over the last few years, an objective competitor analysis and go to market strategies are lacking in most plans. Financial plans also need improvement.
Now, we discuss newer ways to raise capital. For example, we are talking about NBFCs coming forward, Financial Institutions getting aggressive towards small businesses, crowd funding etc. With such options available, what kind of differentiating elements does Lead Angles provide?
I think leveraging the internet and mobile technologies will make capital far more accessible than it has ever been and transform startup funding irreversibly. We will however have to wait a few more years in India till the regulatory environment and corporate governance norms are set up for such types of funding. We are planning to provide an online platform to members to study and make investment decisions.
You have already made a positive start in Mumbai and Ahmedabad. How is the experience so far?
It has been a very encouraging and at the same time a learning experience. As we understand and learn more about individual preferences of our members we have been able to dovetail the investment proposals accordingly. We are also seeing an increasing maturity of entrepreneurs.
What level of support do you offer to the entrepreneur who is seeking venture capital? On the other hand, what level of support you offer to the investors in terms of due diligence?
We are keen that the fund raising experience of the entrepreneur is valuable in itself for the teams irrespective of whether they get funded or not. Companies who have potential but are yet not fundable are encourage to seek mentorship or introduced to incubators for fine tuning their offerings.
What expectations do you have from the Delhi Chapter?
Delhi is India’s second largest market for venture funding and we are excited to be operating here. Our relationships with IITs and other educational institutions in the NCR would be key for our progress with the passage of time. We expect our Delhi Chapter to be the largest across the three cities that we operate until now.