In India, raising angel money is as difficult as it should not be, especially if you are a technology company. Lately, even early stage investors have been moving away from the early stage deals and angel investors talk to you like a VC [though they claim that they 'really' want to invest, but in all reality they are better off investing in share market].
Frustrated with all of this, 15 Indian startups decided to ditch the VC/angel route and have launched their own fund (details to be revealed later). The idea behind this is not to say no to VCs/Angels, but to raise funds when you actually need money.
The stealth mode fund comprises of companies/entrepreneurs across different segments – i.e. technology, retail and healthcare.
- The entrepreneurs will invests their personal money in the fund.
- Anybody who needs to raise the fund will pitch in their bplan [precise roadmap, not just the ppt] to the team and raise money from the corpus.
- Each company will have to return back the money within 6 months of borrowing [i.e. think of this as an angel fund, which will help you get the product out and later, raise fund from VC and the angel fund exits]
- More companies/entrepreneurs will be added only after the completion of first pilot.
- Only startups will be part of this programme. The fund will not raise any external money.
- So far, the whole initiative is based on trust and acquaintance among entrepreneurs.
- As far as risk is concerned companies from different industries hedges the risk.
On the face of it, there are too many questions for the team, but what matters is that if they can make it work, they set a standard for everybody. Especially for the fake angels.
What’s your take on this? What questions do you have for the team? Do you think this idea is sustainable? Scalable?
Something on the lines of What Indian Startup Ecosystem Needs to Learn from Bihari/Oriya Cooks.