So you want to invest in a startup. You have spent days, maybe weeks studying the firm's business model, products, financials and market share. Maybe you have also reached out to the firm's employees or clients to get a sense of the business, work ethics etc. But is that all you need to make the big decision? I guess not.
There are no shortages of investment options being pitched out today and as an investor, you ought to be particular about who you are funding. Perhaps most importantly, look to partner with someone who is going to stick it out, never quit and who will make good decisions, with their interests in mind.
Widely considered one of the most successful investors of all time, Rata Tata sticks to some of the basic parameters when evaluating investment opportunities. For him, the concept is key.
"The thing that I am intrigued by first is a start-up that has an interesting concept which excites me. If it doesn’t excite me, I really don’t need to make an investment in that company," Tata said in a candid conversation with Kunal Bahl, co-founder and CEO of Snapdeal, at TiECON Mumbai 2016.
While Tata invests in only those ideas that excite him, he also needs to get a good impression of the team backing the venture, the 81-year-old said.
"The second is what I feel about the founders. That is his first impression as such. A founder that is only in for the short-term, has no passion for the sector that he is in or the business he is building, doesn’t give me a great deal of comfort."
Tata, an industrialist, philanthropist and a former chairman of Tata Sons who now serves as its Chairman Emeritus, is a serial investor. He was an early backer of Ola, the ride-hailing platform, and Paytm, an investment he made in his personal capacity way back in 2015. He picked up a small stake in One97 Communications, which owns and operates Paytm, and took on the role of an advisor to the firm.
"I feel that if that founder has the passion and has the innovation, he needs to be supported ... Underlying all of that, I am more intuitive than a numbers person and I also recognise that not all investments are going to be positive, some may fail and some may have problems for different reasons but that is life," Tata told Bahl.
Snapdeal was the first e-commerce firm that Tata invested in. While his exact investment has not been disclosed, the corporate czar has now become the most high-profile individual investor in India's e-commerce industry.
His other investments include CureFit, a health and fitness startup; ClimaCell, a provider of accurate weather forecast; CarDekho, the flagship portal of GirnarSoft; UrbanLadder, an online furniture website; Lenskart, an online retailer that sells eyewear; NestAway, a home rental startup and Dogspot, an online pet care platform.
First Published: Sept 13, 2019 12:02 PM IST
