Saturday, February 14, 2015

What I have learnt as an Angel Investor


I have been investing for many years now. I like the idea of making my money work for me, and fortunately my investments have done well. My passive income ( from my investments) is more than my professional income, and today I practice medicine because I enjoy doing IVF – not because I need to treat patients in order to generate revenue. This allows me to practice better medicine, because it   allows me to put my patients first , and I don’t need to do unnecessary tests and treatments.

In the beginning, most of my investments were in the listed space. I was exceptionally lucky , because Rakesh Jhunjhunwalla was by guide, and he told me which shares to buy. I was smart enough to follow  his advice blindly, and my portfolio has done very well.  My equity investments are managed by portfolio managers; and my family office.

I started investing in startups as an angel investor about 5 years ago. I was inspired by my friend, Rajesh Jain, who was India’s internet poster boy during the 1999 dot com boom.

Over time, I have now invested in more than 6 startups, and have learned quite a bit in the process.

My first investment went belly up.  This was in the healthcare space, and was a strategic investment, because I felt I could add my domain expertise to make it a success. Sadly, the company was located in Bangalore, so it was hard to keep track of its activities. Even worse, the founder was a mature and seasoned manager, who really didn’t seem to want or need our advise, so we watched passively while the company went down the tubes.

The next 2 startups are still running, but they have not grown.

After this, I invested through syndicates , such as Mumbai Angels and I3N. This was much better, because it allowed me to learn from co-­‐investors who were much smarter and more experienced than me, and it’s been an interesting ride so far. It’s still early days, so it’s hard to predict what the fate of these companies will be. The problem with investing in a group is that there can be quite a lot of delay, because it’s sometimes hard to get buy-­‐in from everyone . It can take upto 14 days just to get all the investors to sign off on the documents ( though the processes are getting more efficient and streamlined these days).

For me, my most important agenda is to learn from the founders, and I find that the best way of doing so is by investing directly though my family office. I am very fortunate, because Manish Gupta has so much experience in managing early-­‐stage companies, and he provides a lot of value and insights to the entrepreneurs. He makes sure we follow the right processes, so we can act as effective partners, and offer value to the entrepreneur. This is an ongoing journey, and I hope to continue learning over time, so we become better catalysts as we gain experience.

What’s next ? It’s time to start exploring whether we can act as an accelerator for founders, and we will continue to explore new opportunities as these arise.

My family office is run by Manish Gupta whose website is at www.solidarity.in

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