NOTE: Applications to IR7 are now closed. We will soon open applications for IR8. Please watch this space for more info.
Startups meeting the following criteria have a higher chance of getting funded. The startup must:
- Have at least one BITSian co-founder.
- Have sufficient traction to be eligible for angel funding
- Be at the seed stage, looking for funding in the range of INR 2.5 million – 20 million.
- Online applications are submitted via website
- Steering Committee(SC) to conduct screening over Skype/WebEx & phone call
- Subsequently, SC will conduct Q&A with startups (if required)
- Finally, SC will be up with the shortlist
- Shortlisted startups to get a slot to pitch to Angels via Skype/WebEx.
- Startups will be given an opportunity to add detailed information for the final pitch
- Steering committee collects interest level from the angels using an online survey
- Final Investment Decision is made
How does Spark Angels influence investment decisions?
Spark Angels only provides a platform for bringing together interested angel investors and startups who seek funding; the Angels support team plays an active role in facilitation and support services during the entire process.
The final investment decision is made by the investors who are a part of the angel network.
What is the range of equity, and other key agreements that are pertinent to the process?
Since this an angel network, the range of equity that the startup would have to give up would involve a discussion between the individual investors and the entrepreneurs running the startup.
Is there a non-disclosure agreement signed between the angels and the start-ups during the initial phase (pre-due diligence phase)?
No, as is common in most such angel forums. Startups are encouraged to be as open as they wish to while interacting with investors. Intellectual property concerns can, and do come up during the due diligence process, in that case the startups would seek legal advice on how to proceed.
What is the corpus size?
Spark Angels is an angel network, not a ‘fund’ per se, which means there is no corpus to speak of. This is how it works. A startup states a monetary requirement, say Rs. 1 crore. The Spark Angels then come together and review the final list of companies. The final amount/equity is decided during the due diligence process.
What exactly do you mean by showing traction?
Traction can be estimated by any one of these metrics :-
- User adoption
- Customer base
- Key partnerships
- Existing revenue streams
- Prior funding. Prior funding is not a requirement by any means, it’s just one of the ways to show traction
Make no mistake, this is by no means an exhaustive set of parameters, but these are the ones we have most commonly employed in past..
Why haven’t you given any numbers to suggest the amount of traction you are looking at?
We understand that traction tends to be a rather subjective metric, given its variance across industries. And that is why we feel it best to leave it to the judgement of the entrepreneur. One obvious suggestion is to look at the facts realistically –
- How many users are you seeing?
- How do you see them growing, and how many of them pay for your services?
- What kind of strategic partnerships do you already have?
- How many of them are in the pipeline and how realistic conversions do you project?
What is the range of funding that the network is looking at providing?
The category is ‘seed funding’ for Indian start-ups. Seed funding in India is in the range of INR 2.5 million to 20 million. That is what Spark Angels targets as well.
What is the Spark Angels Steering committee and what do they do?
The steering committee comprises of 4-6 angels who have volunteered to conduct the initial due diligence and screen startups, which will finally get to pitch to the entire Spark Angels network.
How is it feasible to conduct an angel investment decision online (e.g WebEx, Skype) ?
Given that the angels are spread out geographically, we decided to conduct the investment process online using WebEx and Skype. We have already conducted 4 Investment Rounds using the same process and are confident that IR 5 will be conducted just as smoothly.
Will I receive mentoring and advice along with funding as well?
All angels come with years of industry experience across sectors. Apart from the angels, we also have a large number of BITSians who have pledged to help BITSian startups across various functional areas.
What support will Spark Angels provide through the process?
The Spark Angels team along with its strong network will help the startup in a number of ways. These include access to experienced angels, facilitating the startups in preparing their submissions, legal help, tie ups with a number of incubator and accelerators such as The Hatch, Aegis, etc.
How will the Investment Round be made a transparent process?
Spark Angels is committed to making the whole process transparent. The minutes of the meeting, the results of every round, as well as invitations/reminders of every investment round will be made public.
How many investors can participate on a single deal? How is the process conducted to decide the amount that each investor invests?
The Spark Angels steering committee will present the final shortlist of startups to all the angels. For instance, say one of the startups wants to raise INR 20 million, and it attracts exceptional interest from one of the investors. This investor then takes the lead on this investment and along with other interest angels, invests in this startup. A member from the Spark Angels steering committee moderates the process to ensure smooth functioning.
How many startups are you looking to invest in per round?
The entire process funnels the application right up to the final shortlist which will be revealed after the final round of filtering.