Where to invest. 

How much to invest. 

These are the two most common questions in the mind of any angel investor.

Before delving into what’s an ideal strategy to invest, it’s pertinent to recognize the nuances of the startup industry in general. Startups are innovation engines, and any innovation would entail a higher risk than a ‘tried-and-tested’ investment. However, people are still drawn to startup investments for several reasons that include disproportionately higher returns on successful investments. So the trick is to recognize that despite the best analysis in the world, ‘predictability’ of startup returns would always be lower than usual. Hence, diversifying risk by building a portfolio of startups is important.

Here’s how this can work:

• Plan for total investment in startups over a 10-15 month period. Start with at least 25L. Make sure you’re comfortable with this amount being illiquid for ~3-5 years.
• Decide on your diversification preference, remembering that min investment in 1 startup would be 5L, and can go to 10-25L
• Share with Ecosystem Ventures Partner/Analyst any specific preferences you may have (industry-specific, size-specific, stage-specific etc.)
• Plan to co-invest in the ventures we are personally investing in (typically 6-9 investments / year)

Additionally, we also have some special-situations deals in which we are able to structure a redeemable debt instrument with equity upside. [combination of fixed-income with coupon and equity rights]