Angel investors need to learn to be kind ! If they are lucky, success will hopefully follow !

1. How to be a kind angel
investor
Dr Aniruddha Malpani
www.malpaniventures.com

2. Show me the money !

4. Angel investing will not make
you rich !
• Illiquid asset class. Need lots of patience
• 80% of startups fail
• Only invest money which you can afford
to lose without losing any sleep over
• Have realistic expectations !
• Too much hype

9. From IVF specialist to Angel
Investor !

10. My journey
• On the Board of IKSHealth ( a Rakesh
Jhunjhunwalla company ) 10 years ago
• My daughter worked in impact investing
and did her MBA from Stanford
• Joined Mumbai Angels – an angel
network
• Now do it through my Family office,
Solidarity

11. Reinventing myself – learning
to become an angel investor
• Easier today, thanks to the internet !
• Share my experiences on LinkedIn. Have
120000 followers today
• Learn a lot daily
• Get to broaden my horizons – the world
is a fascinating place !

13. www.malpaniventures.com

14. Our approach
• To be founder-friendly. Respect
entrepreneurs
• Frugal Innovation
• Say No quickly
• Have a well defined Investment
thesis
• Try to be open and transparent

16. Due Diligence
• Pre-negotiation
• Due Diligence Checklist
• Negotiation
• Term Sheet

17. Funding
• Negotiation
• Valuation
• Control
• Our preferred option - CCPS

19. Legalese
• Term sheets
• SHA
• Focus on areas of agreement
• Use standard templates
• Find a startup friendly lawyer

20. Red flags about founders
• Only an idea, with no
implementation
• Hockey stick curve for revenue
• “ No competition”
• No skin in the game
• Too many buzz words, such as AI
and ML

21. Common mistakes
• Ask for a NDA
• Use DCF for valuation
• Try to bluff
• Refuse to accept criticism and
feedback
• “ Wannabe entrepreneurs”

22. Whom do I fund ?
• Need to fall in love with the
team
• LOI vs ROI
• Integrity, Curiosity, Humility
• Willing to teach – and to learn
• Paying customers

23. Our process
• Back the entrepreneur
• Soft corner for failed entrepreneurs
• Women entrepreneurs
• Social impact investing ( edutech
and healthcare)
• Domain agnostic

25. After signing the cheque
• This is when the hard work starts !
• Need to be actively engaged
• Monthly MIS
• Governance and accounting
• Introductions to other investors and
founders
• Help only when asked !

27. Support your startups
• Keep dry powder for follow on rounds
• Be available and accessible to provide help
• Introduce to customers and investors – be
their cheerleader !
• Help with recruiting and marketing
• Coach and mentor
• Keep the faith – startups need patience and
persistence to succeed.

32. Principles of angel
investing
• Portfolio approach
• Power law applies
• Not a “ get rich quick” scheme –
do your homework !
• Join a network
• Read about angel investing.

33. Angel networks
• Pool knowledge and money for wiser and
more productive investments.
• Source deals
• Tap into the wisdom of the crowd for doing
due diligence
• Post investment follow up
• Digital networks. Angel List. Let’s Venture
• Real life networks

34. Saying No –
and not Maybe !
• Say no fast - over email before you meet
• Say no at the meeting; when in doubt, say no
• Don't waste the entrepreneur's time
• Only invest in people you’re excited about
• No FOMO. There will always be other deals
• Try to add value at every meeting
• Jealously guard your reputation !

36. Why I enjoy being an angel
investor
• Makes you optimistic. More hopeful
about the future by connecting with
bright young ambitious entrepreneurs
• Can contribute to the next generation
• Networking opportunities
• Reputation
• Helps you remain young because you
learn all the time

38. Key ingredient for success – Learn!
• Be patient
• Have realistic expectations
• Be willing to get your hands dirty
• Don’t micromanage
• Play to your strengths

42. Investing takes years to learn !
Returns take even longer !
• You will make lots of mistakes
• Don’t overestimate your ability to predict
success
• Startups are complex adaptive systems and
the future is unpredictable
• Start with small investments . You will get
better as you gain expertise and brand.
• Investing is one of the few professions where
you can improve until the day you die.

43. If it’s too good to be true, it most
probably is !
• Many predators and parasites in the startup
space. Many have a hidden agenda. Lots of
mis-selling and hype !
• These include: incubators, dealmakers,
bankers, mentors ,angel networks, and
coaches.
• Everyone serves their own interests first.
• Take everything with a large pinch of salt.
• Hone your BS detector – you will get better
with time !

45. Pearls of wisdom for
entrepreneurs
• Beware of investors :
– asking how much return you can give to them
– not respecting your time
• Don’t push-sale your company, get investors
to come to you
• Follow up till investors give you an answer. If
it’s a No , ask why they rejected you
• Learn to negotiate - Don’t be too rigid and
don’t be too flexible

46. Pearls of wisdom for
entrepreneurs
• Raising funding is no validation for a business
– only repeat paying satisfied customers are
• Don’t fall in the trap of vanity metrics
• “No”s are not a personal rejection . Think of
them as being a lack of meeting of minds
• Don’t compare yourself with the unicorns –
they are outliers !
• Investors are optional – you can always
bootstrap

47. Ideas, Implementation and
Funding
• Ideas are a dime a dozen. Don’t fall in
love with your ideas – most are bad !
• Generate lots of ideas ! This improves
your chances of stumbling on the right
one
• Don’t worry anyone will steal your
ideas. Share them and ask for criticism,
so you can polish them !
• Passion is necessary but not sufficient

48. Angels vs VCs
• Angels invest personal money. Come in all
shapes and sizes, because they have different
motivations
• When did they sign their last cheque ?
Interview their founders
• VC structure – GPs and LPs
• Institutional imperative – decision making by
investment committee

49. Bitter truths
• Most startups fail
• No one knows which startups will fail
• It’s a numbers game
• What goes up usually went down first
• All companies always need more money

51. Books for Entrepreneurs
• Financial Intelligence for Entrepreneurs by
Berman
• Hot Seat by Dan Shapiro
• Disciplined Entrepreneurship: 24 Steps to a
Successful Startup by Bill Aulet
• Bootstrapping your Business by Greg
Gianforte
• Start-Up Guide for the Technopreneur:
Financial Planning, Decision Making, and
Negotiating from Incubation to Exit by David
Shelters

52. www.malpaniventures.com