Invests in Promising Startups at Every Stage of Growth Lead Angels evaluates high conviction ideas that, among other things, have a notable amount of traction, a valuable offer, a high entry barrier, and a good founder pedigree.

With a sector-agnostic approach, the SEBI-registered angel fund Lead Angels has backed transformative startups in every area, enabling innovators in technology, healthcare, fintech, drone technology, and more. Having said that, it evaluates high conviction ideas that, among other things, have a notable amount of traction, a valuable offer, a high entry barrier, and a good founder pedigree.

"We always hope that the startups for which we obtain funding never have to deal with this runway issue, but naturally some of them do in spite of our best efforts. During these times, in addition to locating funding sources, cost reduction and—most importantly—standing by the founders when things become rough could mean the difference between success and failure. Our portfolio management team gets involved when it becomes crucial for the startup to hunt for an M&A target to sustain or increase shareholder value. Many of our businesses, including Supr Daily, Belita, and AHA Taxis, have been acquired throughout the years, giving investors an exit," according to Founder and CEO Sushanto Mitra.

Capital is essential to any business. While it is expected for startups to be capital-efficient, they often require a small amount of funding to develop their product or gain entry to a crucial market before they become self-sufficient. As long as the business is able to generate growth and draw in funding, this cycle will continue. "In a time like this, we would prefer that our portfolio companies have enough liquidity to last without having to raise money at low valuations. As a result, Mitra added, we usually invest in businesses that have at least 12 to 18 months' worth of capital on hand."

As per Mitra, the competition for Series B and later-stage finance is still very fierce, even if firms that are successful in raising Series A capital sometimes have an easier time obtaining subsequent rounds of financing. "Investors at these stages expect startups to demonstrate considerable growth, market traction, and a route to profitability. Financing businesses that don't fulfill the required standards for financial success and scalability is now increasingly difficult," he shared.

Mitra believed that predicting a crisis is difficult. "The founder is the only "mantra" that we can use to combat this. In any industry, if the entrepreneur is nimble, agile, strong headed, and driven to succeed, he or she will pivot and make all the necessary shifts. At Lead Angels, two successful instances were ZFW (now Ziffy), which began as a ghost kitchen before changing its focus to become a full-stack cold chain logistics company, and Planet Spark, which swiftly switched to online classes post Covid lockdown to reach a far wider audience in the hinterland. This still serves as our resilience plan."

Stats:

No of Startups Invested in: 80 companies overall, invested in 30 companies in FY23

No of Exists: 5 exits overall, 1 exit in FY 23

Focus Sectors: B2B SaaS, Healthtech, AI/ML, Agritech, Deeptech

Fund Size: Lead Angels Fund (INR 300 crore)

Ticket Size: USD 100,000 to USD 200,000 (INR 80 lakh to INR 1.6 crore)