Sadeesh Raghavan has been investing in Indian startups as an angel investor for about four years through the Delhi-based Indian Angel Network. His most recent deal was a seed round in WebEngage (earlier known as WebKlipper), which offers online feedback and survey tools to websites. Prior to becoming an angel investor, Raghavan, led Accenture India’s domestic business as managing director of the company. He also sits on the global advisory board and investment committee of Acumen Fund, a US-based venture philanthropy firm. Raghavan, who shuttles between Singapore and Mumbai nearly every week, spoke to Startupcentral about his experience with angel investing here. Edited excerpts:
What made you turn to angel investing?
I became an angel investor by accident. In fact, I took up my last assignment at Accenture because I wanted to get to know the Indian market and move into private equity investing. Then I invested in a couple of friends’ companies and realized that angel investing was more my cup of tea. Private equity is a very spray and pray business. I can’t deal with that. If I invest in a company, it has to be because I care about the business. I can’t go in thinking that it wont work. I have to get involved in some manner.
Apart from IAN, you’re also involved with Acumen Fund. How did that come about?
I actually got involved with Acumen while I was still with Accenture. CSR (corporate social responsibility) was a big topic at Accenture and I reached out to people in the US to find out more. That’s how I got connected with Acumen. They have an employee internship programme with Accenture. I like Acumen’s for-profit model and I think the real breakthrough organizations in India will come from the bottom-of-the-pyramid. I sit on the boards of several of their portfolio companies and get involved at the micro level on the operations side.
Isn’t the focus of investments at IAN very different?
Yes, many of the angels who invest through IAN are interested in technology. IAN, in that sense, covers the top end of the market. But now it has started moving towards bottom-of-the-pyramid businesses. Young graduates are jumping into these businesses, which is something you would not have seen two years ago. It is an encouraging sign.
What kind of companies interest you in the Indian market?
I’m always interested in companies that address the local market. They may have the potential to go global, but the dominant target market should be India.
Do you have a checklist or process for evaluating an entrepreneur prior to a deal?
If the entrepreneur is just looking for money, then I am most likely not going to be interested in the company. The way I think about it is that if his business is so good and he only needs money, why can’t he find a financier? I like to make an entrepreneur think of what they are doing. This usually involves spending a lot of time talking to the entrepreneur. The good ones will always push back. They will not entirely accept everything that you are telling them.
How long does it take to close a deal?
As much time as it takes to really get to know a business. It could be weeks. You have to do site visits, crunch the numbers and really see the business on the ground.
How many companies have you invested in so far? What kind of stakes do you prefer?
About 20, of which maybe 10 are through IAN. I try to keep the stake small. If you take too much then you become the owner of the company and I know that I will never be a good owner. Better off as an advisor!
Image Courtesy: IAN
