How angels have changed the face of the Indian start-up industry

India’s top 10 angel investors — call them archangels — have supported and helped build 425 Indian startups over the past 10 years, according to estimates by startup database Xeler8.

That’s a significant figure, given that the startup ecosystem is still in its infancy, and reflects the kind of support that affluent individuals are pouring into it.

Google India MD Rajan Anandan is by far No. 1, with investments in at least 80 startups. Following him are Sunil Kalra, who started his career in the exports business in Delhi and set up a leather apparel manufacturing firm in 1992 that worked with global designers, and Anupam Mittal, founder & CEO of People Group that has built businesses like Shaadi.com and Makaan.com, both with about 50 investments each.

Deal making by angel investors overall surged to a record high in 2015. Angel deals accounted for 49% of all funding deals in the year, up from 42% in 2014 and a mere 12% in 2010, according to data from financial research firm VCCEdge. Angel funding crossed the $300 million mark in 2015, up from $196 million in 2014.

Angels are an absolutely critical part of the startup ecosystem, because they come in with funds and expertise at a very early stage in startups’ lives, a stage when they need it the most. Venture capital and private equity funds invariably come in at later stages when they have a clearer picture of a startup’s trajectory.

Others major angels in Xeler8’s list include Anand Ladsariya, founder of Mumbai-based chemicals maker Everest Flavours; Sharad Sharma, co-founder of software product association Ispirt; Zishaan Hayath, founder of Toppr; Rehan Yar Khan, managing partner at Orios Venture Partners; T V Mohandas Pai, Manipal Global Education chairperson; Sanjay Mehta, member of Indian Angel Network; and Rajesh Sawhney, founder of GSF Accelerator.

Each angel has his or her own investment philosophy. Sharad Sharma has invested in close to 30 startups in the areas of tech, cloud and software products. “I approach angel investing through the lens of proxy entrepreneurship rather than stock picking. This means roll-up-your-sleeves mentoring,” he says, and adds: “I’m not a spray-and-pray angel investor. Instead, I stick to my narrow investment thesis. This makes for quicker investment decisions and better value-add to the entrepreneur since I’m operating in my zone of competence.”

GSF’s Sawhney calls angel investing a science and an art. “It requires instincts to pick winners both in terms of business ideas and people. I’m not excited about ventures that have ideas which lead to what I call ‘15% improvement’. I look for those that do something substantially different. Some ideas are nebulous, but you have to find the real value behind the nebulousness and make something out of it,” he says.

Anupam Mittal says there are far too many me-too entrepreneurs, because entrepreneurship has become sexy. “We identify those that have the hunger and passion to solve a problem,” he says.

Story courtesy: The Times of India