So You Want To Be an Angel Investor? The Issue Is Exit

Asia's Tech News Daily

Arvind Khaalibaithnewala shifted his considerable bulk on the sofa and absent-mindedly flipped channels on his television. Known as Khaali to his friends, he was in his fifties and had recently quit his job with a multinational corporation to “pursue other interests”, as he explained to his wife. He had a comfortable lifestyle: his own house in a decent locality, club memberships, enough money to take a foreign vacation from time to time. The stock market was doing well, and provided him with the funds to live the kind of life he did.

So You Want To Be an Angel Investor? The Issue Is Exit

Unsplash

Things should have been hunky dory. But a keen observer of human nature would have noticed that they were not. There was something missing. Life was too boring: no excitement, no challenge, same old parties, the same Black Label every evening.

At that moment, Sanjiv Paisabhai–or simply Paisa to his friends–walked in. Another ex-MNC guy, and a good friend. “Khaali, why don’t you join me for this month’s Winged Angels meeting?” he said.

“Angel meeting? Angel investing? No way Paisa! I do not have a few spare crores lying around to put in,” was the immediate response. “Leave that to guys like Ratan Tata.”

“Boss, you don’t need to be a Ratan Tata to be an angel investor. This is the age of the ‘aam aadmi angel’. Do you know, even an investment of INR 5 lakh is OK?”

Khaali sat bolt upright, as far as his bulk would permit, of course. “INR 5 lakh? That’s all?” The television remote was forgotten, and his eyes gleamed. “Tell me more.”

“Just come with me to the meeting. It’s on this Saturday.”

So Saturday saw the two friends walking into one of the conference rooms at IIT-Delhi, all set for the monthly Winged Angels meeting. There they met several other angel investors, and Khaali was able to speak to them over coffee. “Why are you into angel investing?” was his favorite question. And the answer was varied. “I get a chance to be involved in running a business. Without the stress of managing it 24×7”. Or, “These are bright youngsters, with great ideas, lots of energy and enthusiasm, but very little experience. I can use my 30-odd years of experience to mentor them. So it’s a great win-win”. And so on. And with each person he met, Khaali became more and more convinced that angel investing was the way to go. In his mind he was already looking at it as his next career – perhaps till the age of 90. His visiting card would say, ‘Arvind Khaalibaithnewala, Angel Investor and Mentor’. Already he began to feel more active.

And so the meeting started. The first presentation was by a company called Greatstay, which was in the area of service apartments. They would rent out large spaces in residential areas, furnish them, and then lease them out as service apartments where they would manage everything from maintenance to the plants to cleaning, etc. In other words, the standard concept of service apartments.

Khaali felt himself getting excited. The market for such an offering was huge, and the venture appeared to be profitable. Mentally he started figuring out which fixed deposit he would break to invest in this company. However, he had to drag himself back to the present because the presentation was over, the founder had left the room, and the angels sitting round the table were discussing the deal. There were many viewpoints shared, but one particular comment struck a chord with Khaali. One of the angels said, “Boss, in today’s COVID times, service apartments are a bit of a question mark. When I make an investment, I expect it to appreciate, and get an exit. But I don’t see myself getting an exit in such a company, at least in the foreseeable future.”

“Therefore I am not investing,” he said loudly. “So there.” And he promptly got up to get a cup of coffee (beer, unfortunately, was not on the menu) as if to close the discussion.

After the meeting, Paisa explained to Khaali. “You see, when you invest in the stock market, you buy shares that are listed. Which means you can always sell them later. We call this an exit. But in this game of angel investing, shares are not listed. So we would need to find someone – perhaps a VC – who is interested in buying your shares. And why would this VC invest? Because they are confident that they, in turn, would be able to sell their shares to some other VC. And that’s the key: VCs will only invest if they are confident of getting their exit when the time comes. But with COVID around, and the third wave threatening to hit us any time, you will find it tough to find a VC to invest in such a business.”

And as they walked into their favorite pub for a beer, Paisa had the last word. “Remember, one of the key issues to keep in mind as an angel investor is, “Are you likely to get an exit?”

Khaali was impressed. Today he had learnt something about angel investing. But he had a lot to ask, “Paisa, what about valuations? And scalability? I’ve read about these terms in the papers. And if I decide to invest, how do I go about it?”

Paisa smiled. He had got his friend hooked onto a second career. “Patience my friend. All in good time. Keep reading Entrepreneur, and you’ll get your answers. Right now let’s focus on our beer.”

“Cheers!”

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

Jade Forest Raises $1 Million

Jade Forest, a non-alcoholic beverage brand, has raised $1 million in a funding round led by Mumbai Angels Network. Jade Forest The funds will be utilized for geographical expansion and ... Read more »

Parliament winter session: Shashi Tharoor, in selfie with women MPs, says Lok Sabha "an attractive place to work"

Parliament winter session: Shashi Tharoor tweeted a photo with women MPs. The winter session of parliament opened on a rather colourful note for Shashi Tharoor. The Congress MP from Thiruvananthapuram ... Read more »

Speed Vs Sustainability: How Rapid Expansion Plans Might Affect Your Startup Growth

Starting up is exciting but not easy. It is the most difficult career option and the most risky. But once the die is cast–product launched, customers started to buy, key ... Read more »

3 Resilient Blue-Chip Stocks to Buy Now

Resilient Blue-Chip Stocks Are Attractive in the Current Market Environment What are some of the typical qualities that make a company resilient? It’s usually a business that can generate profits ... Read more »

5 Reddit Penny Stocks To Watch This Week

Reddit Penny Stocks To Watch as November Comes to an End  With November almost over, plenty of penny stocks continue gaining momentum. Although it can be difficult to stumble upon ... Read more »

Should You Buy G-III Apparel Group (GIII) Ahead of Earnings?

Investors are always looking for stocks that are poised to beat at earnings season and G-III Apparel Group GIII may be one such company. The firm has earnings coming up ... Read more »

Bet on the Metaverse's Build-Out with a Stake in Matterport

InvestorPlace – Stock Market News, Stock Advice & Trading Tips Investorplace.com – InvestorPlace Ready to step directly into the metaverse? Or at least, get portfolio exposure to it? If so, ... Read more »

Gold IRA: Is This New Type of Retirement Account a Good Post-Pandemic Investment?

Today’s precarious economic environment makes a strong argument for alternative retirement investments for the post-pandemic era. This, at least, is the prevailing sentiment among many investors and market-watchers who fear ... Read more »

Polkadot Stands to Gain Now That the First Parachain Auction Closed

InvestorPlace – Stock Market News, Stock Advice & Trading Tips Investorplace.com – InvestorPlace Polkadot (CCC:DOT-USD) is a $38 billion market cap cryptocurrency that is ranked as the eight largest, according to ... Read more »

ShibaSwap Explained: Everything You Need to Know About the Shiba Inu Crypto Ecosystem

InvestorPlace – Stock Market News, Stock Advice & Trading Tips Investorplace.com – InvestorPlace Almost every crypto investor has heard of the Shiba Inu (CCC:SHIB-USD) token at this point. The altcoin ... Read more »

CrowdStrike (CRWD) Set to Report Q3 Earnings: What's in Store?

CrowdStrike Holdings CRWD is slated to report third-quarter fiscal 2022 results on Dec 1. – Zacks The company anticipates third-quarter fiscal 2022 revenues in the range of $358 million to ... Read more »

What to Make of the Recent Stock Market Pullback?

I had written up a commentary that I intended to send out this morning that was going to focus on some bigger-picture, strategic items related to market cycles and developing ... Read more »

Happy Ratio Raises $150,000 In Angel Round

Happy Ratio, a foodtech startup, has raised $150,000 in its angel round from ah! Ventures. Happy Ratio The funds will be used to launch a portfolio of all-in-nutrition products, strengthen ... Read more »

Do Options Traders Know Something About Endo International (ENDP) Stock We Don't?

Investors in Endo International plc ENDP need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 21, 2021 $3.00 ... Read more »

8 Outside the Box Strategies for Successful Brand Management

It is an undeniable fact that every business big or small wants to develop itself into a popular brand. For the success of a business, it is highly imperative that ... Read more »

Pinnacle West's (PNW) CAPEX & Clean Energy Aims Augur Well

Pinnacle West Capital Corporation’s PNW planned investments in strengthening its infrastructure and an increasing focus on renewable sources for power generation will help it take advantage of the expected demand ... Read more »

The Future Of Salestech: Here's What You Can Expect

In the last decade, the term salesperson has evolved along with the way they sell. Sales that started with casual conversations between buyers and sellers has become a lot more ... Read more »

Watch: Truck spills thousands of dollars on California highway. People rush to scoop cash

The freeway free-for-all began after a door of the armored truck flew open near San Diego. (Image credit: Screengrab from video Instagrammed by @demibagby) An armored truck spilled huge wads ... Read more »

Virgil Abloh, Louis Vuitton's first black creative head, dies; Priyanka Chopra, Karan Johan pay tributes

Virgil Abloh was picked as the artistic director of Louis Vuitton’s menswear collection in 2018. Virgil Abloh, top American fashion designer, died on Sunday after battling cancer. He was 41. ... Read more »

Realme 9i launch details leaked; could feature MediaTek Helio G90T

Realme 9i will be launched ahead of the Realme 9 and the Realme 9 Pro. Realme 9i launch timeline has leaked. According to a new report, the budget smartphone from ... Read more »

This Remote Productivity Hack Makes Working on the Go Easy

thrive in the cutthroat world of entrepreneurship. But as we adapt fully to the remote working world, you have to find new ways to be productive outside of the office. ... Read more »

Indian Oil ad says fuel voucher "perfect gift" for weddings. How Twitter reacted

Indian Oil has released fuel voucher promotional messages for weddings, Diwali and Dhanteras. (Image credit: Photo tweeted by @IndianOilcl) Indian Oil Corp Ltd (IOC), the country’s top refiner, recently came ... Read more »

Indian Oil ad says foul voucher "perfect gift" for weddings. How Twitter reacted

Indian Oil has released fuel voucher promotional messages for weddings, Diwali and Dhanteras. (Image credit: Photo tweeted by @IndianOilcl) Indian Oil Corp Ltd (IOC), the country’s top refiner, recently came ... Read more »

Madhya Pradesh businessman builds Taj Mahal replica home for wife

Anand Pradesh Chouksey took three years to build the Taj Mahal replica in Madhya Pradesh’s Burhanpur. A lovestruck and historically minded husband has emulated the world’s most famous display of ... Read more »

How Success Happened for the Caden Sisters, CEOs and Co-Founders of Belly Bandit and Proof

Lori Caden, one of the co-founders of Belly Bandit, a brand dedicated to helping women look and feel their best before, during and after pregnancy, had recently given birth and ... Read more »

Maximize Marketing and Communication Strategies With the Largest Generation on the Planet

The Gen Z generation is on the cusp of becoming the most powerful and influential generation in history. While some marketers might be tempted to view them as a fickle bunch, ... Read more »

"The tyranny of the majority is not about demographics alone": Author Kaushik Roy

Visual thinkers would have no difficulty following the conceit in Alphabetica: A Satire on Majoritarianism – the first work of fiction by Kaushik Roy, president – brand strategy and marketing communication, Reliance Industries Ltd. For ... Read more »

Obesity rising among children, adults in India; experts raise concern

Representative image. There has been a rise in obesity among children under five years of age with 33 states and union territories registering a spike in the number of overweight ... Read more »

Author Anuja Chauhan on 'Dil Bekaraar': "You have to trust the director's vision"

Anuja Chauhan’s autobiographical novel Those Pricey Thakur Girls was first adapted for television as Dilli Wali Thakur Girls in 2015. In its newest version, the book has been developed into a ... Read more »

Here's looking at you, kid: A lot of happy accidents went into making 'Casablanca' a classic

‘Casablanca’ came out in the early 1940s. At the time, no one at Warner Brothers thought they making something special. (Illustration by Suneesh K.) Often, when at a loss about ... Read more »

New Year trip planner: Maldives

(Representative image) Try night fishing in the Maldives. Resorts sometimes offer drinks on the house to the first person who catches a fish or the person who catches the most ... Read more »

How to stand correctly (shh, it's important)

Start by planting your feet about hip distance apart. The weight on each foot should feel the same. The Indian body type is peculiar. Soft, round middles are the norm ... Read more »

Shahid Kapoor and Ranveer Singh set to resume their blockbuster run with Jersey and '83

Together, Shahid Kapoor and Ranveer Singh created history with Padmaavat which went on to score a triple century at the box office. Sanjay Leela Bhansali’s Padmaavat released in January 2018 after ... Read more »

Bangalore's Café Noir has a new outpost in Lower Parel, and it's just the spot for a good breakfast

The Parisian café-themed interiors of Café Noir in Lower Parel feature old world light fixtures, imposing mirrors and black and white photographs depicting the Parisian way of life. Once in ... Read more »

Here's One Way to Save Money When You Return to the Office

Small businesses are always looking for ways to save money. During the Covid-19 pandemic, many businesses have found massive savings by cutting out the office lease. But as things slowly ... Read more »

Easily Find the Apps You Need With Setapp, the Netflix of Mac Apps

Remember when Apple used to proudly advertise, “There’s an app for that”? Well, there’s a reason they don’t do that anymore. We’ve officially reached the point of app overload in ... Read more »

Why Every Entrepreneur Should Study the Austrian School of Economics

Over 50 years ago, economist William Baumol noted that economics was a theory of the economy that left no place for entrepreneurship. Economic models, simply put, were “entrepreneur-less.” Economics is ... Read more »

Google Fined $11.2 Million By Italian Regulator Over Data Use

Google – Alphabet Inc (NASDAQ:GOOGL) – has been fined by Italy’s antitrust regulator over “aggressive practices” linked to user data’s commercial usage. The ruling comes after the General Court of ... Read more »

‘Gaming industry is poised to be this century's dominant form of entertainment': CarryMinati

Ajey Nagar aka CarryMinati recently crossed 30 million subscribers on YouTube. In 2019, Time magazine called Ajey Nagar aka CarryMinati a ‘Next Generation Leader’. The popular YouTuber, who started his career as ... Read more »

Continue Your Professional Development with 10 Courses on Sale for Black Friday

One of the best things that an entrepreneur can do is to commit to learning new things. The world is constantly changing and innovating and it’s up to you to ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic