Akhil Shahani

Director, Kaizen Management Advisors

Mumbai

About Me

I am a serial entrepreneur with ventures in education, private equity, new media, commodities & non-profits. I did my MBA at the Kellogg Graduate School of Management & am an active angel investor.

Investment Strategy

My investment strategy is to invest in companies that have existing customer revenue in conventional industries. They need to show a defensible USP that will keep them ahead of the competition. Obviously, the team has to have had existing experience that helps them execute their planned strategy. Although I can’t share the names of my portfolio companies, most of them have the aforementioned characteristics.

My Criteria for Investing in Startups

Frankly, there is no shortage of new ideas in the market & often competitors can quickly copy any product. I'd like to see an experienced team that has a business model that enables them to beat the competition, but is flexible enough to keep innovating to make changes to the model as market dynamics change.

Common Mistakes Startups Make and How to Avoid Them

It’s well known that more than 80% of new businesses fail within the first 5 years. The major cause is often the entrepreneur runs out of cash before the business takes off. The best way to avoid this is to assume your expenses will be double of your projections and revenue will be half of those projections. If you can arrange enough capital to cover this deficit, you have a much better chance of succeeding. Every entrepreneur should spend time building knowledge about his business from online resources and connecting to people who can help his business grow. Every entrepreneur should take advantage of them.

Attributes I Look for in an Entrepreneur

One major attribute of a successful entrepreneur is the ability to learn from each setback and keep moving ahead. It is also important for the entrepreneur to have a real passion for creating value for the world through his company's products or services. An entrepreneur who is just focused on making money will never succeed in the long term.

Most Popular Types of Businesses in India at the Moment

A smart entrepreneur can make money in almost any industry today. The key is having a strong model that will attract customers away from the competition which generates a decent annual profit. However, if I had to pick industries that would benefit from India's growth over the next decade, I would focus on education, healthcare, FMCG and entertainment. Pure play online and consumer technology businesses will be tough to grow in India in the near future.

Thoughts on First Angel, Follow-on Investments and Offerings to an Angel Investor

Being the first angel is not too important to me. Depending on how the business progresses, I am always happy to look at follow on investment. The best thing for an entrepreneur to do is to find an angel who can help build his business through either industry expertise and/ or useful contacts. If he can find that angel, then it is a good idea to benefit from his capabilities by offering a board seat. Connecting with the wrong sort of angel who just gives money and wants quick returns could actually destroy the entrepreneurs business. Ideally an entrepreneur should keep his startup expenses low, so that he needs to give a lower percentage of his company away due to the lower funds required. The entrepreneur should really focus on leveraging the angel’s expertise and contacts at this early stage.

Message for Entrepreneurs

Best advice I can give a new entrepreneur is to build a business that you can feel passionate about and will have fun growing even if you do not make much money at the end. If you can create real value for your customers, the money will come some day. However, never let money be the main reason for you to start a business.