Individual investing, a new trend among angel investors
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Bangalore: Angel investment has gone through different stages of development since at first when angels were helping entrepreneurs with time and money. Then came the angel networks which were clusters comprising hundreds of angels who invested in early-stage ideas. Now even as the Indian entrepreneurial ecosystem is still shaping up, many experienced professionals are choosing to engage in angel investments with entrepreneurs in their individual capacities, reports Archana Rai of Economic Times. These professionals are called "Real Angels" and they create a fresh layer of capital and expertise for aspiring entrepreneurs. This group include a cross section of experts like VeriSign country manager Shekhar Kirani, big-ticket entrepreneurs such as Jerry Rao of MphasiS, Alok Kejriwal of Games2Win, Naveen Tewari of In-Mobi , Ravindra Krishnappa of Vertexperts Consulting, industry mentor Sanjay Anandaram, as well as venture capitalists Ashish Gupta and Kanwaljit Singh of Helion Advisors who are occasional angels backing start-ups that do not fall within the purview of the fund. Ravindra Krishnappa wants to create a model where an active angel who owns about a fifth of equity nurtures and prepares start-ups for subsequent rounds of formal capital. This model invests finances and expertise into what is still a shallow pool of entrepreneurial talent in the country. This year nearly $440 million was invested in young companies across 83 deals compared with $320 million in the previous year. These deals are made only after start-up ideas have matured into fledgling businesses. But according to research firm Venture Intelligence, just 15 early-stage angel deals were firmed up this year compared to 22 such deals in 2009. Shekhar Kirani has provided angel capital to four start-up firms of which he has exited from two over the last year. India has seen in increase in top angel groups investing in different firms. India's leading angel groups such as Mumbai Angels have invested in about 22 deals while Indian Angel Network has about a dozen companies invested in. In the U.S. angels have invested in about $20 billion annually in 50,000 companies. These leading entrepreneurs feel there is an inherent flaw in the angel network model as they have no say in which individual member invests in their company. They feel that the young and new entrepreneurs who have ceded equity to such passive investors have to then seek out consultants for real advice.