Small and up-and-coming businesses in emerging industries such as pisciculture, pig farming, and floriculture in Punjab are usually looking for funds when starting out. When bank loans turn out to be expensive and moneylenders seem dicey, investment options by angel investors and venture capitals might just be what start-ups need.
The third day of the CII Agro Tech India 2018 being held at Parade Ground, Sector 17, Chandigarh, had a very interesting workshop on innovators which saw discourses by renowned investors, including Ms Padmaja Ruparel, Founding Partner, Indian Angel Network (IAN) and Mr Subhadeep Sanyal, a former investment manager who is the Principal at Omnivore Partners.
Discussing the various options for start-ups to seek funding from, the investors present at the conference suggested new-age entrepreneurs to first ascertain whether they require additional resources or if they can start their company with little capital, also known as ‘bootstrapping’. In case the venture is on a bigger scale, capital can be sought from investors who the latter believe has long-term growth potential. This ‘venture capital’ usually comes from well-off investors, investment banks etc. and can include managerial expertise or technical assistance as well.
It’s an increasingly popular option in the current scenario, although investors usually get equity in the company, and thus a say in its decisions. The deciding factor about who to invest in, said Mr Sanyal, was determined after knowing the investment properly. “We usually meet people about 10-12 times to know them thoroughly. When you know their values, ideas, and business deep enough, you’ll know if you want to invest in their business,” he said.
While talking about the red flags that angel investors usually look for, Ms Padmaja said that the integrity of an entrepreneur is imperative. “Integrity of purpose, of the mind, of transactions with his team – it’s all important. Angel investors put their bets on these. They provide not only money mentoring, but also market access,” she added.
The workshop, which was attended by many young entrepreneurs, as well as business and management students, turned out to be an eye-opener for those looking to start out or in the midst of new businesses.