Sep 11 2011 , Hyderabad
Hyderabad Angels, a group of high networth individuals who pursue investment opportunities in start-up companies, will soon close funding deals in two or three companies.
The funding will be in the order of $ 1,00,000 to $ 5,00,000 in technology, energy and agri-based business in a month or so. However, the funding will be provided by individual members and not through the common platform.
“Every month about six to seven deals are put to the investment screening committee,” JA Chowdary, a member of Hyderabad Angels and executive chairman of Talent Sprint, which imparts training to engineering graduates to make them job ready, told Financial Chronicle.
“We are vertical agnostic. The proposals are coming in technology and energy areas. Mobile technology and internet too are seeing a lot of buzz,” he said. The companies coming for funding are not necessarily from Hyderabad.
Hyderabad Angels was formed about a year ago with an objective to provide funding for start-ups and about 60 firms have angel investors. One member takes the lead to do the due diligence on profit margins, firm profile, market potential, team in place and other aspects of the proposals after they are okayed by the investment screening committee, he said.
Based on this information, other angel investors commit their investments in the venture in return for a stake in the company based on the valuation they arrive. There might be multiple investors investing in a same project.
“Many start-ups are not in a position to provide collaterals to the bank. Venture capitalists, as the funding model demands, are not attracted to the project unless the prototypes are ready and the revenue model is visible. Same is the case with private equity funds,” he said about the difficulty start-ups face in raising funds and the need for HA, which will also provide mentorship to start-ups.
“We are even open to funding even Rs 50 lakh for a venture,” he said.
Typically, the investment period is for three to five years and Angels exit when the company raises Venture capital or goes through a merger and acquisition process.
In March this year, HA members invested Rs 2 crore in Hyderabad-based custom RFID manufacturing company, Identis Private. Other members have invested similar amount in a Mumbai based solar energy company.
Recently, Indian Angel Network, a network of business angels which so far made investments in 24 firms and made full or partial exits from five companies, in a Series A funding invested under $1 million in a real estate group buying pioneer, GrOffr.com, to help the latter expand to other cities in India.
GrOffr’s competence lies in forming groups of buyers in any city so as to be able to get a better deal.
Another start-up, ZipDial, based in Bangalore, received Series A investment of over $800,000 from both Indian and US angel investors, led by Mumbai Angels.
ZipDial’s patent-pending missed call concept offers varied services like polling, generating sales lead and more, according to Valeire Wagoner, chief executive office and one of the founders of Zipdial.
Large customers such as Proctor and Gamble, KFC with Pepsi, Sanofi-Aventis, Videocon have used Zipdial services for their campaigns.
The funding will be in the order of $ 1,00,000 to $ 5,00,000 in technology, energy and agri-based business in a month or so. However, the funding will be provided by individual members and not through the common platform.
“Every month about six to seven deals are put to the investment screening committee,” JA Chowdary, a member of Hyderabad Angels and executive chairman of Talent Sprint, which imparts training to engineering graduates to make them job ready, told Financial Chronicle.
“We are vertical agnostic. The proposals are coming in technology and energy areas. Mobile technology and internet too are seeing a lot of buzz,” he said. The companies coming for funding are not necessarily from Hyderabad.
Hyderabad Angels was formed about a year ago with an objective to provide funding for start-ups and about 60 firms have angel investors. One member takes the lead to do the due diligence on profit margins, firm profile, market potential, team in place and other aspects of the proposals after they are okayed by the investment screening committee, he said.
Based on this information, other angel investors commit their investments in the venture in return for a stake in the company based on the valuation they arrive. There might be multiple investors investing in a same project.
“Many start-ups are not in a position to provide collaterals to the bank. Venture capitalists, as the funding model demands, are not attracted to the project unless the prototypes are ready and the revenue model is visible. Same is the case with private equity funds,” he said about the difficulty start-ups face in raising funds and the need for HA, which will also provide mentorship to start-ups.
“We are even open to funding even Rs 50 lakh for a venture,” he said.
Typically, the investment period is for three to five years and Angels exit when the company raises Venture capital or goes through a merger and acquisition process.
In March this year, HA members invested Rs 2 crore in Hyderabad-based custom RFID manufacturing company, Identis Private. Other members have invested similar amount in a Mumbai based solar energy company.
Recently, Indian Angel Network, a network of business angels which so far made investments in 24 firms and made full or partial exits from five companies, in a Series A funding invested under $1 million in a real estate group buying pioneer, GrOffr.com, to help the latter expand to other cities in India.
GrOffr’s competence lies in forming groups of buyers in any city so as to be able to get a better deal.
Another start-up, ZipDial, based in Bangalore, received Series A investment of over $800,000 from both Indian and US angel investors, led by Mumbai Angels.
ZipDial’s patent-pending missed call concept offers varied services like polling, generating sales lead and more, according to Valeire Wagoner, chief executive office and one of the founders of Zipdial.
Large customers such as Proctor and Gamble, KFC with Pepsi, Sanofi-Aventis, Videocon have used Zipdial services for their campaigns.
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