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Angel Investing

'Gujarat set to emerge as the next Silicon Valley of India'

'Gujarat set to emerge as the next Silicon Valley of India'
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You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Hailing from a simple family in Baroda, Kaushal Chokshi always dreamt of becoming an entrepreneur right from a very young age. It is this passion, which led him to become a serial entrepreneur and later, an angel investor. He has founded over 20 ventures across USA, Europe and Asia, with 3 successful exits and an IPO in 1987.

Chokshi is well-travelled and has seen new innovations, which intrigue and inspire him to invest in novel concepts and emerging start-ups. In 2006, he exited from all companies to focus on his big project - the Scaale Group - to implement a dedicated solution for start-ups, SMBs, Corporations and Governments through innovation, talent, sales, capital and exit. Scaale, a Venture Resource Group, has its headquarters in four key markets of San Francisco, London, Barcelona & Mumbai, and with offices in four continents.

Furthermore, Scaale Group's angel investing platform Cross Border Angels (CBA) help investors co-invest in international high growth potential companies. The platform assist start-ups to raise funds with trusted and smart investors (angels, funds and family offices) in different markets.

In an exclusive interaction with Entrepreneur India, Kaushal Chokshi, Founder & Chairman, Scaale Group, talks more about Indian start-ups, the fund raising scenario in India, and how CBA help them explore international markets:

Tell us more about CBA, its operations and how the group is different from other angel network groups?

CBA is the first investment network dedicated to cross border investments. We help Investors to raise funds with trusted and smart investors (angels, CXOs, funds and family offices) in different markets. I want to make global investments possible and that is why CBA is here. A new start-up in Kenya can approach CBA for funds. We want to reach out to all talent and latest innovation in different corners of the world. With the technological boom, geographical limits are no more barriers and these days, start-ups can avail new techniques and help themselves. Further CBA is not just business, it is about giving back to the society.

What kind of Indian start-ups are you looking to support? Is there any pre-defined criterion to select these start-ups?

We organise an investment meeting with investors from our network, who may be interested in the investment opportunity. On an average, one company will meet around 5-10 focused investors interested in the preferred industry, market and stage.

After the meeting, we evaluate the interest of our investors and set up a due diligence process with the ones that are willing to pursue the opportunity. The due diligence process may take up to 2-3 working weeks. If after the process, our investors are interested in injecting the capital, we will provide the required term sheets and negotiation process that can take another 2 working weeks.

Moreover, CBA will advise its investors on how to invest in that particular country, vehicle of investment, or taxation issues. With CBA's process in place, every company will know in 4 working week’s time whether there's a real interest of investment from our members or not.

What kind of support and other necessary resources are provided once the start-up is selected at CBA?

CBA is dedicated to help companies grow through capital, sales and talent. Through the other capital platforms at Scaale, we equip entrepreneurs with the requisite tools to enable them in having more engaging and intelligent conversations with investors, whether strategic or financial.

What mutual objectives are you trying to achieve by partnering with Startup2Startup in India?

I want to give back to the society and lend a helping hand to ones, who have just started their venture. There has to be a start somewhere. This is the era of start-ups. Few of them have performed very well. However, everyone can have their say and CBA is a platform for it. It is a global venture that does not see geographical barriers. There is no bureaucracy involved. Earlier, when we wanted to start something, there many cumbersome processes involved. But now, the scenario is changing at a rapid pace.

What best practices would you suggest young entrepreneurs to follow from the Silicon Valley?

The timing of exit and market in which the business is operating defines its value. The same can be unlocked by the entrepreneur. Being into extremely competitive market, they should think of exiting sooner. Thus, a culture of ‘building value to exit’ is something that all entrepreneurs should introspect on.

Apart from Bangalore, which state/region do you think has the potential to become the next Silicon Valley of India?

The next will be Gujarat.

Almost 98 per cent of start-ups fail to raise Series A funding, what do you think is lacking? And what needs to be done?

Angel investment has always been local, constrained within a 20-mile radius. I'm trying to change that. CBA plans to close 12-15 deals in India this fiscal, each in the range of $250,000 to $2 million. A start-up may not need to secure Series A, if they are effectively able to raise multiple rounds of angel funding, especially if the business model is capital efficient.

According to you, what qualities does a start-up require to become mentorable?

The ability to think global, think value creation for all stakeholders and not just shareholders, and absolute awareness of one’s ecosystem are critical to attract the right mentors on board.

How can a start-up accelerate the process from idea to commercialisation?

If monetisation as a strategy is built into the core business model from the very first day, then there's no reason why commercialisation cannot be achieved faster.

Edition: November 2016

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