: There has been a rush in recent months of business people in the State joining angel networks, those that invest in early start-ups and help mentor entrepreneurs.
Chennai Angels, one of the well-known networks in Tamil Nadu, has had 21 new angel investors joining it in recent months, taking its overall tally to 58 individual investors and 11 institutional investors. New entrants include C.K. Ranganathan, founder of FMCG company CavinKare, Mithun Sacheti, founder of online jewellery shop CaratLane, and P. Elango, former CEO of Cairn India.
At the Madurai-based Native Angels Network, 39 new angels have joined since April this year, and 18 more are likely to do so. Prior to this, it had 35 angels under its fold.
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“We started noticing this trend almost two years ago,” said Vijay Anand, founding partner at The Startup Centre, which helps tech start-ups. “There are a lot of senior management in large companies and also those who invest in real estate now looking at entrepreneurship and start-ups as a new opportunity,” he said.
Angels provide much-needed resources, mentorship and sometimes access to networks to early start-ups, which mostly have neither resources nor experience in the world of business. At the same time, it’s a new investment opportunity for the angels, one that is outside traditional asset classes.
Chandu Nair, an investor with Chennai Angels, said, “This is not sufficient. The number should be several thousands.”
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He said, “The variety of patrons makes it more exciting. Apart from incubators, accelerators, angels, seed funds you now have family offices, government launching new schemes, crowd funding, social impact enterprise facilitators, corporates getting more engaged. Each of them brings different things to the table.”
The entry of the new angels comes at a time when start-up activity is picking up steam across the country and in the state. Technology has been an enabler in new entrepreneurs cropping up.
Lakshmi Narayanan, President of The Indus Entrepreneurs, Chennai, said, “There is an entrepreneurial streak in everyone. But the corresponding risk taking ability is not with many, particularly those that have succeeded and have something to lose.” Hence, he said, “they back the risk-takers, who are the new age entrepreneurs, not only with money but with mentorship, ideas, hand-holding.”
He said, “In a way, the new patrons live their dreams through the new age entrepreneurs. Angel investors should realise that their investment is only a small part. Their continuous interest is far more important.”
Apart from e-commerce, angels are keen on sectors such as healthcare and food. On an average, each of these angles evaluates three to five firms at the same time.
At Chennai Angels, an aspiring member is expected to be able to afford investment in high risk, early stage ventures.
Sivarajah Ramanathan, founder Nativelead Foundation, said, “In places like Coimbatore, they look at this as a new and exciting investment game. The angel investment model is slowly evolving into an alternative asset class and may soon be a part of the mainstream investment options for high net-worth individuals with an exploring mindset.”He said, “Some look at this (mainly early stage funding) as a better alternative to charity - especially considering the investments in social enterprise sector.”