Information Technology ‘Veterans’, Management Gurus, amongst other ‘veterans’ of corporate services have two great assets – ‘experience in their subject matter’ and ‘angel money’. They qualify to be one of the smartest combinations around. With more than a decade and half of experience, there are many reasons for this ‘smart capital’ to be deployed and the veterans to have a second innings with start-ups.
a) It’s about your legacy: After the contributions to growing a large corporate, being a big fish in a big pond, and all the laurels and plaudits of fellow corporate almighties, you finally have reached either a plateau or ennui. This is the time to look at the minions and then create your own legacy. The legacy is about being the big fish in a small pond, helping the youngsters getting it right. Beyond the money that was made and the battles that were fought, and relentless quarters that were crossed – come to the meadows of the light green sprouts – the startup world. The ‘experienced gardener’ needs to tend the sprouts. A legacy of mentorship and a story to be told to the world – these are stories that you can reminisce happily, later.
b) It’s about giving back: You had spent all the time learning the ropes, tricks and then made it big. Sometimes, all of us wonder, had we got that little advice, a little rope, little nudge – we would have corrected our course and set forth in the right direction. Now, it is your turn to remove the feeling from the folks who are starting up. A bit of nudge, a little rope, a little pat on the back and a small whisper in that ear, can set alight a lamp in the minds of those minds which might need your wisdom. It is time to give back what you had learned.
c) After life: Do you think there is life after corporate world? Very much yes. With gas in the tank, in terms of energy and zeal, some of you might be interested in pursuing a ‘second innings’ – as my colleague calls it. Participating in a startup is one of the most invigorating ‘after life’ experiences one can have.
d) Smart Money: The startups need not only wisdom but smart money. The ideas to business journey are fraught with the need for capital and enterprise. The angel investor that you are, or want to be, would be more effective if you participate. As an investment, if you are able to contribute and help ‘control’ the growth and the risk, the possibility of both return of capital and interest is much higher. We call this smart money.
e)Shot at Entrepreneurship: Not all of us can ‘start up’. But we would want a ‘dose of entrepreneurship’. I am not saying ‘for the heck of it’ – but as a genuine effort from your side. If somebody has started up, your journey is half done. You only have to jump in the boat.
Now, these are reasons enough. How do you start?
- Decide what are your core competencies and what is the minimum capital that you can invest. Decide what is the ‘sector of interest’.
- Look for forums and investment advisory firms – ‘watering holes’ where startups are around. Meet, talk, listen and network – educate yourself.
- Involve a Chartered Accountant and a lawyer. They are key to your safety in terms of financial and legal advice.
- You can form a pool of like-minded investors with complementing competencies and capital. A legal formation can be all the more useful.
- Invite pitch-decks and start evaluating them. Ask questions. Remember ‘Investments in startups’ is a caveat emptor situation. It is upon your own judgment and risk.
- Follow the standard steps to the T: Term Sheet – Due Diligence – Shareholder’s agreement – Advisor’s agreement.
- Do not chew more than you can. Say ‘No’ firmly to start-ups that might not fit your time, capital and interest.
As a veteran, it is time to discover life. Well, being an angel is one of those ways. Time to pad up.