Ritesh Dhoot, a director in a Bangalore-based multinational technology company, has been wondering how to be a part of the startup culture. In Delhi, Sushil Mehta, who retired recently as the managing director of a pharmaceutical company, too was looking to invest in startups. Both, however, did not know where to start.
Their quandaries were resolved when they learnt of Pune-based Grex Alternative Investments Market, a platform similar to an exchange that brings early-stage startups and investors together.
Mr Dhoot and Mr Mehta are just two of the nearly 500 individuals who have registered with Grex.
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Grex, on its part, has managed to attract people from across fields including doctors, merchant navy officials, businessmen and retired professionals from across the country.
“We have nearly 500 registered investors and over 350 companies on Grex. Even we were surprised by the diverse array of investors from across states and profiles,” says Manish Kumar, CEO, Grex. To mitigate the risk of unaccounted money coming in, the company follows KYC (know your customer) norms.
“Grex does a lot of due diligence and background checks. For instance, I had to provide my PAN and bank account details. This adds confidence and brings transparency. Before making an investment, I get to meet the startup’s owners and get to check the company’s balance sheet for three years,” says Mr Dhoot.
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The platform has been created keeping in mind risks associated with investing in such early-stage startups. For this, Grex has tied up with law firms, investment bankers, custodians and even a rating agency to grade companies and make them compliant with regulatory requirements. Companies, too, have realised the importance of an organised platform, and more than 350 startups have registered on Grex for funding.
Checks have been put in place to ensure that only good quality and compliant companies are available on the platform. Typically, a company takes three to four months from the date of registration to go live on the platform.
Law firms advise companies to put in place all statutory blocks, like amending the articles of association, share capital, board meeting minutes and resolutions. In a first, Care Ratings has tied up with Grex to grade startups and help investors make informed decisions.
On October 30, Grex closed the first transaction which saw Gurgaon-based Kleeto, an information management company, raise Rs. 1.5 crore. Mr Kumar hopes to get at least 12 companies live on Grex.
“Grex ensures that the kind of information that an investor wants is made available. I have invested in Kleeto and will be looking for more investments after carrying out various checks. Transparency on the platform helps us in making informed investment decisions,” Mr Mehta added.