The Startup Dealmaker
The information asymmetry, that exists in the dealmaking landscape in India, for start-ups to connect with right investors and vice versa often leave performing ventures bereft of funding, and investors of tapping a disruptive idea early on. Chartered accountant, Himanshu Kumar, realized the need for democratizing the dealmaking procesFns and launched Angle Paisa last year, for investors to spot curated and investment-ready ventures. For start-ups, it helps them to find likeminded investors. Kumar elaborates it further in a chat with Entrepreneur.
What problems in the start-up dealmaking scenario in India, led to the launch of Angle Paisa?
My objective is to provide my clients with a hassle-free atmosphere to do business. I have been running my chartered accountancy firm, Himanshu Kumar & Associates in New Delhi for almost a decade now. We offer compliance and taxation consultancy to national and international firms, including start-ups in setting up or running their business. There is no dearth of entrepreneurial talent or capital for start-ups, however, they are scattered currently. I realized that there is a need to bring the start-ups and investors on a common platform. Hence, I launched Angle Paisa.
Take us through the process of fundraising on Angle Paisa?
Through Angle Paisa, start-ups can raise equity investment from friends, family members, likeminded community and individual investors. The process begins with an entrepreneur providing details of his/her business idea and its viability, how innovative is the idea, the target market, growth strategy and the amount of investment required. The business plan is evaluated by Angle Paisa’s experts, who primarily ensure that the fundraising campaign is not misleading for the investors. After this, we internally valuate the idea before it is listed on the platform for investors to study and evaluate, and decide whether they are willing to invest. As far as investor selection is concerned, anyone who is interested to buy even a single share in a startup is an investor for us.
Are you different from the other existing similar platforms in any way?
Yes. Other existing platforms act as an intermediary by receiving funds from investors and then transferring it to start-ups, after deducting their commission from both, investors and start-ups. At Angle Paisa, investors give money directly to start-ups, meanwhile, start-ups transfer their equity shares directly to investors in dematerialized form. We charge our investors only when the start-up becomes profitable. From start-ups we charge facilitation fee.
What about providing value protection to the investors, investing through your platform?
To provide value protection to the investors, we ensure that start-ups have all the support, in terms of back office, accounting, and compliance support etc., in their gestation periodat an economical cost, so that they can survive the initial phase of their journey. This increases their chance to grow further, eventually benefiting our investors.
Do you mitigate start-ups’ concern about their idea being copied by others, after getting listed on the platform?
The risk will always remain there, even if the idea is not listed on our platform. Angle Paisa supports startups with a suitable funding option, and we perceive that if the idea is innovative, then the chances of it being copied are minimalistic.
Do you see online dealmaking platforms as competitors to traditional angel networks in tapping the best ideas to back?
Certainly, in fact the competition has been increasing over last one or two years for these angel networks, with the launch of platforms like Angle Paisa. That’s because apart from funding, we also offer the start-ups other support, including accounting services, tax and compliance matters, valuation services, back office support etc.
(This article first appeared in the Indian edition of Entrepreneur magazine October 2016 Issue)