Mohit Sadani, co-founder of The Moms Co., and I went to business school together. He was a strong candidate to build a successful startup, having worked at a top consulting firm and subsequently led user growth at Snapdeal, an e-commerce darling at that time. We first discussed his impending launch of the venture in early 2016. They were targeting the large, price insensitive and not-yet-disrupted market for mom and baby products that had immense potential.
Along with his wife, Malika, he had spent years thinking through the business model and researching about products. They had a clear vision of how they wanted to launch and how their business would evolve. At the same time, direct-to-consumer and subscription models were simplifying the supply chain and consumers were excited to try new brands. Things looked good, except that they were still pre-product and pre-revenue. At OperatorVC, we had an informal rule that we would invest early, but not pre-product.
Early traction, whether it was in the form of a product, early customers, or early revenues, was important for us. And so, we said no. A year later, 5,000 mothers had used products from The Moms Co. Saama Capital and DSG Consumer, two very respected venture funds, were funding their series A. While we tried to invest at this stage, they didn’t need an angel-sized cheque and we missed out.
My learning from this was that as angel investors, unlike a late stage investor, we will probably get to invest only at a very early stage of a fast-growing startup. We invest when things are uncertain and early traction gives us comfort. But if the team is capable and passionate, and the target market is large and ready for disruption, early traction can be overlooked. We got a very similar deal, Akiva, less than a year later and we jumped on to it, very happy to have not missed out again.
Akshat Poddar is general partner at OperatorVC.