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Tag: startup funding

  • How to Find Angel Investors for Startups in India: A Practical Guide

    How to Find Angel Investors for Startups in India: A Practical Guide

    How to find Angel Investors in India – This is a question that I often get from founders. 

    Angel Investors in India are a boon for startup founders. They back you when you are at a very early stage of your startup journey—you might have an MVP and some traction, and you need funds to further build your product, get more customers, and hire your initial set of employees.

    Angel Investors, as the name suggests, are Angels for startups. Angel Investors in India give you money from 5 lakhs to up to 5 cr in exchange for 5-15% equity in your company, depending upon the stage you are in. Before trying to understand how to find Angel Investors for Startups in India, let’s try to understand these Angel Investors.

    Find Angel Investors for Startups in India: Who are Angel Investors? 

    Angel investors are basically high-net-worth individuals who invest their personal funds in startups in an individual capacity, in exchange for equity or convertible debt in the startup. They could be startup founders, CXOs, top management professionals of the company with an excess of wealth, who choose to invest in startups. 

    They come at a very early stage in the startup journey and give higher freedom to startup founders to experiment and grow.

    Venture Capitalists, on the other hand, come at a later stage when the company has established a product-market fit and is looking to scale. VCs tend to put in a larger amount of money, get a higher stake in the company, and have control over the operations of the company. 

    What are the ways to find Angel Investors for Startups in India?

    Raising funds from angel investors for startups in India requires three major parts –

    1. Finalising the business plan and deciding on the ask amount
    2. Creating an email cover letter and pitch deck mentioning relevant details about your startup 
    3. Listing down angels and reaching out to them 

    We will cover what the different parameters are, based on which angels decide to fund your startup, but let us see different ways to reach out to angel investors for startups in India. 

    1. Angel Funds

    Angel funds are funds of a network of angels managed by a group of angels. These are some angel funds:

    1. Indian Angel Network (IAN): IAN is India’s largest network, investing across diverse sectors. They invest from 50 lakhs to up to 50 cr in startups. They have invested in more than 225 companies. You can read more about them on their website: https://iangroup.vc/
    2. Mumbai Angels: Mumbai Angels is a network of 700+ angel investors and has invested in 200+ companies so far. To pitch your startup to Mumbai angels, all you need to do is submit your business plan here: https://www.mumbaiangels.com/founder
    3. LetsVenture: LetsVenture is an early-stage fund that invests in startups at various stages – POC/Beta/Early Stage. Their ticket size varies from $100,000 to $ 1 M.
      Visit their website: https://app.letsventure.com/join/startup to pitch your startup
    4. AngelList India: AngelList provides a platform for investors as well as founders to connect. This platform lets you create a detailed startup profile, pitch your business, and connect directly with investors interested in your sector.

    2. Angel Listing Platforms

    You can Google it out – List of Angels in India, and you will find different platforms that list top angels of India along with their email IDs, but the catch here is that it only lists angels that are quite known in the circuit. However, there are lots of angels who keep it low profile and would love to invest in your startup. No worries, you can use the next method to reach out to such angel investors

    3. Social Media and Professional Networks

    LinkedIn is one of the most powerful tools for connecting with the right people, you just need to know how to leverage it in the right way. You need to start searching for Angel Investors on LinkedIn, and eventually, you will start getting suggestions from LinkedIn. Make sure to do a thorough research on the investor and her/his past investments and accordingly frame a small write-up and send a connection request. Do not spam the investors, and make sure to follow a very professional tone. The more clarity you provide in your short message about you and what you are trying to achieve, the higher will be chance of a response from the investor. 

    4. Startup Events, Meetups, and Conferences

    There are lots of startup events happening in India, you can track these events through different portals. Just Google “Start-up Events in Your city” and you will see lots of events. There are some annual events of TIE, Yourstory, and Startup Mahakumbh as well. Being part of these events, you can learn a lot and also connect with lots of angels. Make sure to do well research before going to the event and have your 1-minute pitch ready, as highly likely there will be other founders like you who are there to pitch their startup. Also, make sure to carry your card, and try to get Angel’s contact to share your pitch deck after the meeting. 

    5. Referrals and Warm Introductions

    Like I mentioned previously, there are lots of angel investors for startups in India, hidden in plain sight, and are a little difficult to reach out to. The best way to reach out to such investors is through referrals. You can get referrals from your friends, family, colleagues, or your college alumni network. You can also reach out to founders on LinkedIn and ask for referrals. 

    What Indian Angel Investors Look For before Investing in Startups 

    Before approaching an angel investor for funding your startup, it’s important to understand what makes them sign a cheque:

    • Founder: This is the most important factor for investors, as they are betting on founders since they are investing at such an early stage. They invest in founders who have strong knowledge of the industry and a clear vision of what they want to build. Founders should have a learning attitude and not get offended when provided feedback
    • Early Traction: Angel investors look for some validation of your idea/product before making an investment. It is easy to get an idea, and it’s difficult for angel investors to invest just on the basis of the idea. Hence, it is important to show some traction to show validation of the idea. 
    • Market Opportunity: They look for ideas that can be started small but have the potential to be a billion-dollar business going ahead. Any idea has to start small, but going ahead, you should have a vision to make the business big, hence, it is important to have a big market. 
    • Product Differentiation: It is very important to include a slide of competition analysis and clearly mention your USPs over competitors in the deck. 
  • Startup Funding Stages Explained : From Pre-Seed to IPO

    Startup Funding Stages Explained : From Pre-Seed to IPO

    What are the different Startup Funding Stages?

    Whether to raise funds for your startup? 

    How to Raise Funds for Your Startup? 

    How much to raise? 

    There are uncountable numbers of questions founders get when it comes to raising funds for their startup. There is a lot of unawareness, myths, and confusion around fundraising.

    In this blog, I will walk you through different startup funding stages in as simple language as possible. So, let’s go ahead – 

    1. Bootstrapping (a.k.a. the “Use-Your-Own-Money” Stage)

    You might have heard the word “Bootstrapped” startup. Bootstrapped means the founders are using their own money to get the company up and running. This is where most founders start. When you are in your ideation stage, trying to build MVP and get traction, it is highly likely you will have to put your own money, or you can take it from your friends and family in exchange for some equity in the company.

    In today’s startup era, it is difficult to raise funds just based on the Idea. Founders need to get some traction and show some validation of their idea to raise money from external investors. So, if you are a startup founder at an ideation or pre-ideation stage, make sure to plan your finances well so that you have enough money to get validation for your idea.

    Looks like:

    • Working nights and weekends
    • Building a rough MVP on a budget
    • Testing the waters with early users

    Real Examples: 

    • MailChimp bootstrapped its way to success — running for years without raising a single penny from investors.
    • Zeroda, a fintech giant based in India, is still bootstrapped and has never raised external funds.
    • Sara Blakely launched Spanx without any external funding, relying on her savings to start the company. 

    2. Pre-Seed: Getting Off the Ground

    Let’s say you know your idea has taken shape, you built an MVP or prototype, and got some market validation and customers. Now, you need money to build a product and reach more customers, and add people to your team. This startup funding stage is called Pre-seed funding or Angel funding if you are raising only from Angel investors.

    Angel investors are high-net-worth individuals (HNIs) that invest their own money in individual capacity in exchange of equity, whereas Venture Capitalist(VCs) are institutions that manage and invest money of their limited partners in exchange of equity in the company.

    Who might invest in your startup at this stage: 

    • Friends, family, colleagues, Ex-bosses, College Alumni
    • Angel investors
    • Some early-stage VC firms

    How much: $10K to $500K

    Use of funds:

    • Refine the product
    • Bring on your first team members
    • Start user acquisition

    Example: Airbnb raised $20,000 from Y Combinator at this stage — just enough to keep them afloat and prove the concept.

    3. Seed Funding: Finding Product-Market Fit

    By this point, you’ve got a live product and some early traction. Now, you need money to expand your team, invest in marketing to get more customers, get office space, add more features to your product, and get Product Market Fit, or you might have already reached PMF from the previous round and want to continue innovating or adding new features/products.

    You create a business plan for the next 12-18 months and list down the expected expenses and revenue. This will give you an idea about the money that you are supposed to raise. Create a pitch and a cover letter, and start reaching out to investors. 

    Typical investors:

    • Angel investors/ Angel Funds
    • Seed-focused VC firms

    Funding size: $500K to $2M

    Goals now:

    • Nail down your target market
    • Improve the product
    • Start real growth

    Example: Mamaearth raised seed round of $2M in December 2016 from Fireside Ventures, Suhail Sameer, Vijay Nehra, and Shashank Shekhar

    4. Series A: Scaling Your Startup

    You’ve proven there’s a market. You have users, revenue, and data. Now, you need funding to scale your user, team, and product. You need to try out different marketing strategies. Hire more experienced people in the team and set up processes and automation. Expand your office space.

    Investors at this stage:

    • VC firms with large portfolios
    • Institutional investors

    Round size: $2M to $15M

    Why raise:

    • Expand the team and hire highly specialised talent
    • Try Different Marketing Strategies, trying different markets
    • Expanding product offerings
    • Build a stronger tech infrastructure, automations, and process optimisations

    Example: Dropbox raised $6 million in their Series A from Sequoia Capital. They had traction, a solid product, and a plan to grow.

    5. Series B, C, D… (The Growth Rounds)

    It is really important as a founder to understand different Startup funding stages and use money wisely after each stage of funding, show expected growth to investors, and build a strong consumer base. After series A, if you have built a strong product market fit, hired the right people in the team, set up strong internal processes, and have a strong working culture and happy customers, then it is all about continuing the momentum and continuously innovating. You now need to hire CXOs for your startup who contribute to the growth of your startup and turn it into a giant

    Investors will now include:

    • Late-stage VCs
    • Growth equity firms
    • Strategic investors (corporates)

    Funding range: $15M to hundreds of millions

    Common goals:

    • Try different Markets and Scale globally
    • Diversify the offerings
    • Acquire other startups that align with your business goals

    Example: Nykaa raised $721 million across multiple funding rounds, including Series E led by TPG Growth Capital

    6. IPO: Going Public

    Going public through an IPO means listing your share in the primary market, a dream of many entrepreneurs. You have done a great job so far. You’ve made it. Your company is big, profitable (hopefully), and ready to go public. It’s time to list your company on the stock exchange. An IPO lets early investors and employees cash out — and brings in huge capital for future plans.

    Why companies go public:

    • Raise significant capital
    • Build credibility and visibility
    • Offer liquidity to early stakeholders

    Example: Airbnb’s IPO in 2020 valued the company at over $100 billion. From renting air mattresses to global travel tech giant — it’s a journey powered by funding stages.

    Final Thoughts

    Startup funding isn’t a one-size-fits-all roadmap. Every startup has its own journey.  Some founders raise several rounds. Others bootstrap all the way. What matters most is knowing:

    • Where is your company right now
    • What is the next thing that you want to achieve 
    • What resources do you need to achieve your next goal
    • Are you ok diluting your company? Incoming investors- Do they only bring money or other values as well

    Don’t chase funding because everyone is doing that. Raise money when you have something real to scale. And when you do, make sure you understand the game that you’re playing. Talk to your mentors and other founders to ensure you are making the right decision at every startup funding stage

    Clarity. Focus. Action. That’s how startups win.