After investing in around 9-10 startups, Rajasthan Angel Investor Network (RAIN) is now looking at investing outside India. The angel network has already initiated the process and is in talks with angels and funds abroad. RAIN also participates in further round of its portfolio companies, Mahavir Pratap Sharma, its chairman said in an interaction. Recently, it invested in online media company Blue Box Media Pvt Ltd in its second round of funding. Sharma is also the founder of Oscar Exports, a company which exports silver jewellery, woolen carpets and carved furniture. He is also the founding member and past president and trustee of TiE Rajasthan. Edited excerpts:
What is your angel member base?
We have a member base of 31 members as of now. All committed to invest a minimum of 20 lakhs per year.
How do you decide on lead investor in a funding round?
We decide the lead member on the basis of his or her domain knowledge, ability, intention, past track record and available time at hand. They should be able to give 3-4 hours a week if need be and should be able to connect, and should have the outreach, for the startup with the right kind of network in that domain.
Since its launch in 2013, RAIN has invested in nine startups, what is the plan for this year?
We look at investing about the same number this year or more. We are targeting about Rs 10 crore ($1.5 million) for the rest 2016.
How do you decide to invest in a particular startup?
We look for a team, idea, technology, traction, scalability and most importantly our ability to contribute.
What is your ticket size, are you increasing it?
Our average ticket size is Rs 1 crore and we do not exceed it to over Rs 2 crore. So far, we have invested Rs 6 crore and are also willing to co-invest with other angels or funds.
Any sector favorites?
We are not any sector-specific but staying out of e-commerce, social media, education sectors.
What are the exit avenues?
We dont expect anything in particular but will take a call when it comes.
What about investing in startups abroad?
We are looking at it and are open to it. We are already working with angels and angel funds outside of India.
What are the challenges of raising money?
The challenges of explaining the early stage investment ecosystem and the ROI (return on investment) on the same are there. The fact that the investment window is 3 to 5 years is also important for investors to understand. Lastly, it is also important to keep them informed and updated on the ever changing startup, angel investing ecosystem. The dynamics and rates of success of domains are ever changing and keeping abreast of the same is very critical and we have to keep everyone involved educated and informed.
Do you stay on after VC enters?
We have not reached that point as yet. But we are open either ways, but would ideally want to exit at that point.
What would be your advice to startups when they come to pitch to you?
They should be committed to their startup, have complete domain knowledge of their product and other products around that domain, should have back plans, should have concrete and tangible traction and/or market validation, should be realistic on valuation and market size, make the presentation to the point and pragmatic.