‘Only one in 30 startups is actually able to make it’
2 min read 27 Jan 2022, 10:51 PM ISTWe have a portfolio of 190+ companies at present of which around 100+ have seen exits/next round of investments, says Nandani Mansingka, Founder, Mumbai Angels
PremiumThose who want to become angel investors must be prepared to invest in a portfolio of at least 30 companies, says Nandini Mansingka, co-founder and chief executive, Mumbai Angels Network—one of India’s oldest angel investment platforms, in an interview to Mint.Edited excerpts from the interview:
What is Mumbai Angels?
Mumbai angels is a private investing platform. A majority of our investments are in the seed to Series A stage. Startups come and pitch to our members and some get funded.
What process do you follow?
We get around 800-1,000 proposals every month. We do an initial vetting process and allow 10-15 companies to present their business plans to our members. Now, this happens online, given the pandemic. Thereafter, generally, members invest in 4-5 companies. At this stage, we initiate a third party due diligence and complete the paperwork for investment. We have a portfolio of 190+ companies at present of which around 100+ have seen exits/ next round of investments. Successful investments include Purplle, Exotel, Vahdam Teas, and EV (electric vehicle) ride hailing company Blu Smart.
Once the investments are made, we monitor our portfolio companies and engage in regular discussions with VC funds/ family offices and corporates for next rounds of investments. After 12-18 months, the successful startups move to the larger rounds of funding, sometimes raising money on our platform itself again. The average tenure of an investment made by our members would be 3-4 years. Last year, we invested around ₹80 crore and we expect to touch ₹500 crore per annum in the next 2-3 years.
What does your membership look like?
We have around 650 members at present, from across India and globally. To become a member, you need to pay an initial fee of ₹1.5 lakh and annual fees of ₹55,000.
Those who want to become angel investors must be prepared to invest in a portfolio of at least 30 companies and allocate at least ₹5 lakh per investment. This translates to a portfolio of startup of at least ₹1.5 crore.
Since startup investing is risky, your actual net worth should be much bigger than ₹1.5 crore.
What kind of returns do your members get?
For our portfolio, the Internal Rate of Return (IRR) over a 15-year period is around 25-30%. Only 1 in 30 startups actually makes it and you must be prepared to lose money on the other 29.
Is startup investing in a bubble?
Yes, there is silly money chasing companies without a business model. But overall, no. Today’s heightened interest in this segment represents a structural shift in the Indian economy.
