Angel Investor Groups, like the Applyifi Investor Network, are forums which enable individuals to co-invest with others in startups.
Investing as a part of a group has many advantages: the information about best deal flows and investment opportunities is often shared first with larger groups. As a part of group, it becomes easier to exchange notes on due diligence and the investment worthiness of a venture with other trusted members and also promote the growth of the startup by introducing the venture to other talented members within the group.
Applyifi helps individuals make angel investments in curated, high-potential startups. We review startups on their investment worthiness and provide our members a detailed assessment report, and a 36-point scorecard on various parameters that help them take better-informed decisions.
Once you decide on co-investing in a startup along with other investors, we manage the entire deal-closure process, including the legal paperwork.
Most importantly, we provide our members monthly updates on the progress of the startup, and seek follow-on investments with a view of providing exits to our members.
Once you express an interest to join the Applyifi Investor Network, our team will connect with you to understand your investment thesis and explain the various facets of investing in startups, including the risks and rewards.
Post that you will be requested to fill a short online membership form, and pay the registration fees. We will then set up your profile on Applyifi and create a username and password for you, which will allow you to review shortlisted, curated startups along with our assessment reports.
Applyifi will conduct regular sessions for individuals to understand the nuances of investing in startups. These will include webinars as well as knowledge sharing sessions and networking events in different cities.
Also, the Applyifi team will guide new members in addressing their queries, and also connect them with expereinced investors to understand the risks and rewards of investing in startups.
Investing in startups can yield good return on capital when you understand the dynamics of this asset class, yet we see few HNIs, successful entrepreneurs and senior professionals participating in the startup eco-system as angel investors.
Individuals who are keen to explore startups as an asset class, however, have to recognize that investing in startups is a high-risk, high-return game, and they have to get comfortable with the fact that they could lose their entire capital in some of the companies they invest in, and that most of the startups they invest in may not succeed. Investing in startups therefore needs a portfolio approach. With a diversified portfolio, investing in startups can provide superior risk-adjusted returns.
Investing in just one or two startups, no matter how promising the startup appears, is a risky bet.
As a first step, it is worthwhile to do as much research as possible on the subject (including resources on this site), connect with existing angels and entrepreneurs, be a part of Angel investing workshops, and get acquainted with how the process works.
For investors, Applyifi is a deal-discovery platform where they can find Startups that have been reviewed and rated on their investment worthiness by us, after a thorough assessment using our 36-point scorecard.
Our members are not required to make any minimum investment during the year if they do not wish to. However, when a member does wish to invest in a startup, the minimum investment amount in each startup is Rs. 250,000 (Rs. 2.5 lakhs or approximately $7600).
Investors will get a monthly status update (including a note from the board observer or the investor who will represent other investors on the board). They will also have a quarterly call with the founders for an interactive session.
How is my stake decided in a company that I invest into?
Each Startup declares the funding amount it requires at each particular investment round in lieu of a particular dilution of overall shareholding of the co-founders/other early investors.
An individual angel investors' stake depends on the total amount he/she has invested in ratio to the total funds being raised by a Startup in a particular round.
The transaction is agreed upon on the basis of a term-sheet which outlines the terms of the investment – amount, valuation, rights, etc. Applyifi has a standard term sheet, which you are welcome to review.
A transaction is concluded on the basis of a definitive Share Holder Agreement.
Applyifi will engage a lawyer from its panel of law firms to manage the due-diligence as well as the legal paper work in completing a transaction.
How do Angel Investors make returns on their investment into a Startup?
Angel investors can look at possible exit opportunities in either subsequent rounds of fund-raising by the Startup or as and when M&A event takes place in the life span of a startup business.
At Applyifi we will be announcing workshops and webinars to help new angel investors understand the nuances of investing and exits in startups.
We do it the old fashioned way. We begin by reviewing each application, and meeting or talking to shortlisted Startup founders.
We identify startups and review them thoroughly.
We then shortlist high-potential startups for one-on-one meetings or Skype calls. We then create a 36-point scorecard giving our view of the investment opportunity in that startup.
At Applyifi, we assess and announce investment opportunities to individual Angels and Angel Investor groups based on a "match" on basic requirements: growth stage, industry/sector expertise or preference as stated by an Angel/group and the investment corpus of an individual angel/angel investor group.
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