role of angel investment

Franchise Private Equity Conclave

Role of Angel Investment in

franchise and retail industry

Mumbai Angels

Sasha Mirchandani

Co-Founder, Mumbai Angels

Managing Director, Blue Run Ventures, India

http://www.mumbaiangels.com

Sasha Mirchandani – Mumbai Angels

Bringing operational excellence & scaling experience to funding start-ups

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What is an Angel Investor ?

Anyone who provides private capital to a (non family) start-up

• Usually the first outside investor

• Invest with the expectation of a financial return

• Invest usually locally and regionally

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• Participate actively in the investment process

• Usually care about the entrepreneurs and the companies

they invest in / interested in building personal

relationships with companies & employees

• Offer advice and guidance to founders

Angel Investors in the US

* Source: Angel Capital Association Presentation by Ian Sobieski, Band of Angels, Oct 2007

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Estimate Of

Informal

Investors

Estimate of Active Angels

(Center For Venture Research)U.S.

Millionaires

225,000

Rising Popularity of Angel Investing

3x Growth in North American Angel Organizations in 7 yrs

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Angel Investing – Investment FocusInternet / Software lead other segments

* Source: Center for Venture Research (pre 03 data) and Kauffman Foundation/ACEF (04-06 data)

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Angel Investments in Perspective

In the Context of Venture Capital

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* Source: University of New Hampshire Center for Venture Research, Price Waterhouse Coopers

Venture Capital is Highly ConcentratedSilicon Valley (40%) and NY (7%)

account for nearly half of venture investment

* Source: NVCA Research 2009; PriceWaterhouseCoopers

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Silicon Valley Success Story“Internet is the Greatest Legal Wealth Creation in History”

* Source: NVCA Research 2009; PriceWaterhouseCoopers

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• Consumer internet still offers best path to high multiple returns

• Key differentiator: capital efficiency

• Virtually all the big successes were first backed by angels

Where should Angels invest ?

Finding Great Companies is the Basis of Angel Investing

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What Does It Take….

……To Be A Successful (Angel) Investor

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Growth is Key to Successful InvestingKey: Target the Fastest Growing Internet and Mobile Markets

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Growth is Happening FasterExample: Disruptive Platforms - Time to Success much Shorter

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Next Big Things

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Drastic Changes in Exits

Start-ups Need Less Capital, Exits Shrinking…

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Food For Thought

What will it take to have an entry from India here ?

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Sasha Mirchandani

sasha@mumbaiangels.com

sasha@brv.com

Mumbai Angels