How to Impress an Investor, Secret Revealed by a Veteran Investor
Rajul Garg has set up an exclusive fund called Leo Capital that helps early-stage ventures having technology-driven models
With early-stage investments being the criteria, Entrepreneur India interacted with Rajul Garg who is an early-stage angel investor having recently been associated with Tripeur; a Bengaluru-based corporate travel management venture; that raised $600000 in a pre-Series A round. Rajul threw sufficient light on how he funds early-stage startups, and the key criteria that new ventures can consider if they are desirous of having Garg as a mentor.
A dedicated fund for early-stage companies
Being an investor who mentors early-stage startups , Rajul Garg has created an exclusive venture capital fund called Leo Capital that looks at early-stage, technology-centric opportunities primarily in India.
“We invest anywhere from $300,000 to $1.5 million in early seed rounds or pre-Series A rounds,” states Rajul.
“We have a flexible investment size that allows to invest in a company at any stage. We can invest very early, at a concept stage, or we can invest at a later stage depending on the space itself, traction, ability to scale and other factors,” adds Garg.
In addition to the above, Garg also re-iterated the fact that the key for Leo Capital (to invest and mentor new ventures) is persistent teams which have invested their time and energy in understanding the nuances and having a clear thought process of how they would go about building their businesses.
Involvements and exits
Currently, Rajul is an investor, on the advisory panel, and on the boards of ventures that are generally sector-agnostic. These include startups in the US, apart from those in India.
“Since I am in the business of investments, it’s hard for me to spend time with companies that are not in my portfolio,” stresses Garg.
As far as Tripeur (the corporate travel booking and expense management startup) is concerned, Rajul has been involved as an angel investor since 2016 along with participating in the venture’s latest pre-Series A funding.
In addition to the above, Rajul also optimistically shares the list of ventures from which he has made what he terms ‘positive exits’ with respect to holding equity. These are Qikwell, Babygogo, GlobalLogic, Helathkart.com, and Pine Labs.
Actual investing and mentoring new startups
“We look at your email and materials whether you approach us directly or via a reference,” states Garg.
To obtain funding from Leo Capital, Rajul Garg advises new ventures to approach him directly via a pitch that clearly states the key elements of the business consisting of aspects such as the market, team, and the current achievements of the venture.
“Every business has some uniqueness. It maybe in the market, maybe in the business model, or maybe in the product; and a good pitch articulates how that uniqueness has been demonstrated so far,” recommends Garg.
The angel investor also recommends startups to share slides or videos along with the first pitch email itself, before a personal meeting with the investors.
As far as the exact funding itself is concerned, Garg reiterates the fact that he is a mentor in addition to being an investor with preference laid on working closely with startups that are funded by Leo Capital.
“If you want a specific discussion around let’s say a product strategy, and if you have done enough homework at your own end that you know the right questions to ask, then it should reflect in your email. There are areas which are of interest to us and we might get engaged in that. However, there are others, which may not interest us at the time,” states Garg firmly.
The funding strategy
As far as Garg’s strategy is concerned, he states that his strategy is to take a quick decision.
“We would try to give ventures a term sheet in a month if we are interested. That’s the SLA we are trying to hold ourselves to. After the term sheet it may take a further 1-2 months to close, which includes getting the money in the bank, factoring in syndication needs, diligence, paperwork, and more,” adds Garg.
Finally, Garg adds that valuation of any business comes only after interest in the business is built.” The price is determined by the market and is a function also of the amount of money you are raising, how much the business needs, market interest and so on,” signs-off Garg.