The IIM-CAN Way
Angel Funding is the 1001st step in a thousand miles journey of an entrepreneur
We at IIM-CAN recognize that even though getting Angel Funding is a major milestone for entrepreneurs, the journey is still fraught with the danger of premature startup demise. So, to ensure the survival and growth of the small baby into a vigorous young one we created a whole Ecosystem to ensure survival and growth.
That is why our Angel Network does not seek to facilitate funding only but provides the following:
- An Investment Process: This process is inspired by one of the leading Ivy League college with some modifications unique to our IIM Cal mental outlook
- A Growth Process: With the help of C-Marketplace (A Network of Entrepreneurs and Business leaders), the Startups selected by the IIM-CAN Members are provided support in gaining traction, toolkits, high-level introductions, a “Quora” of CEOs and much more
- An Exit Process: From the outset, IIM-CAN will prepare the groundwork for a profitable exit for its Members from all their investments through IIM-CAN
A. Investment Process
IIM-CAN members recognize the importance of our investments and related activities in affecting the livelihoods of others. This document summarizes our investment process and is used and understood by everyone within our organization. For every investment opportunity, we follow a five-step process, as outlined below.
The five key aspects of our process are:
- Deal Sourcing
- Company Shortlisting
- Company Evaluation
- Post Pitch Diligence
- Deal Execution
We source deals through three broad avenues:
- IIM-C Members: Proprietary deal flow sourced through our members
- Affiliate Network: Partner with incubators, accelerators and investment funds and advisors to generate additional deal flow
- Events: Organize webinars, attend and organize events across India to meet potential founders and learn about new opportunities
The Investment Committee (IC will be supported by Hackstrap Technologies) tracks and maintains a database of all the companies that are interested in raising capital and meet our investment criteria. Every opportunity is evaluated by the IC and any potential conflicts are identified and highlighted at this stage. Companies are judged on the quality of the team, adoptability of the product, size of the market and leadership potential, among other factors. A strong emphasis is also placed on the willingness of the team to allow IIM-CAN to work closely with the company and play an active role in helping it grow in its initial stages.
Companies that expect to be shortlisted must also fulfill our basic investment criteria:
- Valuation range of Rs. 5 Cr – Rs. 20 Cr
- Funding amount of Rs. 1 Cr – Rs. 7.5 Cr
- Presence of a co-investor with relevant domain expertise (desirable)
IIM-CAN will utilize the services of Hackstrap Technologies to shortlist the companies that are sourced or apply directly. Hackstrap has developed a system wherein points out of 100 are allotted to the companies submitted to them.
Sectors of Interest:
- AgriTech, CleanTech, BioTech
- Deep Tech
- Domestic consumption theme (brands)
The best companies that meet our investment criteria are then invited to pitch to our angel network at one of our pitch sessions. Pitch sessions will be held once a quarter in Mumbai, Delhi, Bangalore, Calcutta or online. Each session has between 2 – 4 potential deals for the angel network. Each opportunity will be introduced by the pitch sponsor, who sourced the deal for the group. The pitch sponsor will introduce the team before they present and will have the option to lead the deal (“deal lead”) on behalf of IIM-CAN. If the sponsor chooses against being the deal lead, S/He will introduce the team to the chosen lead if the group decides to pursue the deal.
In addition to the pitch sessions, the leadership team will also inform the network of other potential deals that did not make it to one of the sessions. The leadership team may also call for an ad-hoc pitch session if there is a company that meets our investment criteria that is looking to raise capital in a short timeframe.
Post Pitch Diligence
Once appointed, the deal lead will be in charge of leading all post pitch discussions with the company. The deal lead plays an instrumental role in managing all communications between the IIM-CAN members and the company. The lead is also in charge of managing the due diligence of the company which extends, but is not limited to, maintaining a due diligence request list, setting up follow up calls with the company, visiting the company offices, managing valuation related talks and setting expectations related to the company’s growth.
The deal lead should aim to complete the due-diligence process within 4 weeks of the initial pitch. The process must include a follow up call between the company and the IIM-CAN members to give members the opportunity to ask any additional questions that may have arisen post the pitch session. S/He will keep the leadership team and all interested members informed of any material events of findings that occur during the diligence process. For his/her role in managing the negotiations, the deal lead is entitled to receive a lead incentive that will be explicitly defined in the investor documents at the time of investment. Hackstrap Technologies & Edge IB Services will get a share of this lead incentive for their respective support.
Following the diligence process, the deal lead will submit a final assessment that discusses whether to go ahead with the deal or not (Edge IB Services will provide support in this step). The lead will also manage all investor expectations/queries around commitments. Once the deal terms have been agreed between the lead and the investor, the deal lead will be in charge of managing all investor documents such as the Term Sheet and the Shareholders Agreement. S/He will also lead all communications between IIM-CAN and any other investor group that is participating in the round. After completion, the lead will send out a deal announcement to the other IIM-CAN members. The decision to invest through a SPV (LLP) or directly would be taken by the deal lead.
B. Growth Process
Most Entrepreneurs struggle not only with getting adequate funding but also with 100’s of teething problems in keeping their startups alive and growing. C-Marketplace which is a key stakeholder in IIM-CAN will provide the following support in their quest for growth:
1. Traction: At present we have a network of 200+ companies founded & run by IIMCians along with 90+ senior alumni spread in several large organizations across the world who are providing the necessary support to startups in our ecosystem.
As our network grows within the IIM-C alumni circles, this will translate into more support for the companies in the C-Marketplace Network.
Most importantly for startups, getting anywhere from 2-10 major clients or partners in this Network within a month becomes a norm. This facilitates the startups to gain that holy grail of ‘Early Traction’ which can make or break startups.
2. Toolkits: Thanks to an existing network, startups can get trusted companies run/vetted by their peers to provide all the needed products/services to get started. From legal advice to Conversational AI to proven Sales & Digital Marketing support to any kind of Software Development services.
3. Introductions: Access to almost any person/organization is at most just 2 degree of separation away and unlike more famous Social Media platforms, Entrepreneurs in the IIM-CAN Ecosystem will always get warm connections.
4. CEOs’ “Quora”: An active and accessible community of CEOs (of all kinds of companies) is available for any kind of question that an Entrepreneur may be struggling with. A veritable “Quora” to help with the kind of questions that most people don’t even know who to approach. Best of all its Free in the best spirit of ‘Pay it Forward’.
C. Exit Process
Even before the ink dries on the term sheet of the Startup which gets funding by our Angel Investors, IIM-CAN will initiate the process of facilitating a profitable exit for our Angels. This will be achieved by
- Assigning boutique Investment Banks at the very outset of on-boarding a startup in the IIM-CAN Ecosystem
- The assigned I-Banks will work closely with Family offices, pre–Series A, Series A investors and other such investors
- Keeping the investors in the VC/PE space apprised of the milestones being achieved by the startups of IIM-CAN
- Capitalize on C-Marketplace and tap the network of our alumni for a direct trade exit
We at IIM-CAN recognize that even though getting Angel Funding is a major milestone for entrepreneurs, the journey is still fraught with the danger of premature startup demise. So, to ensure the survival and growth of the small "baby" into a vigorous young one we have created this whole IIM-CAN Ecosystem.