When someone chooses to become an entrepreneur, they know how hard it will be to make it to the top. But eventually, they stumble upon many people on their journey who give lend them a hand. Investors and mentors are the most important ones and can make or break your business.
Mr. Agnelorajesh Athaide is a Serial & Social Entrepreneur, Real Estate Developer, Educationist, Angel Investor, and Motivational Speaker. After being an entrepreneur for a long time, he thinks that choosing the right mentor is very important for any entrepreneur.
In Sociobits’ Investor Series, team Sociobits connected with Mr. Agnelorajesh Athaide to gain some insight into his investment philosophies so every entrepreneur can learn something from it.
What do you think is the future of the startup culture globally?
The world, especially India, is seeing a huge surge in startups and I feel this is a great trend. Countries have developed purely because they created an environment of startups, which ultimately grew into large companies and many of them became unicorns. That’s the story of a developed country and India too is moving in that direction.
An individual becoming an entrepreneur has better productivity for the economy than an employee. This propels the growth of the economy. We will keep seeing huge growth in entrepreneurship across the world and people and enterprises who make money will keep investing and boosting startups.
Is there anything that we can change to develop or give a boost to the startup ecosystem?
We need to coach the startups before we fund them. A startup needs total clarity on its way forward. A good idea is good if the idea can have longevity enough to earn good dividends for all the stakeholders.
Thanks to platforms like Shark Tank a lot of wannabe entrepreneurs are getting great insights into becoming an entrepreneur. They have started understanding the language of being an entrepreneur and the ingredients that are required to become a successful entrepreneur.
“Choosing the right mentor is the key. It’s just like making the right decisions in life. Every super star is successful because he has the right manager who also plays the role of a mentor.”– Mr. Agnelorajesh Athaide
How important is the role of mentors when it comes to guiding budding entrepreneurs?
A mentor is a requirement of every single human being. Even Sachin Tendulkar had a coach till the last day of his retirement. A mentor is a coach who can see beyond visible distance. As entrepreneurs, we are always engrossed in managing current situations. A mentor builds the entrepreneur to define and design short-term and long-term goals and creates an alignment between them.
A mentor motivates, shows the right path, gives solutions and helps to convert obstacles into opportunities. Choosing the right mentor is the key. It’s just like making the right decisions in life. Every super star is successful because he has the right manager who also plays the role of a mentor. He guides what not to do.
If you would like to give one piece of advice to all the budding entrepreneurs who are looking to raise funds, what would that be?
- Raise funds as late as possible at as high a valuation as possible.
- Don’t make a business plan to raise funds. Make a business plan where investors would chase to invest.
- The majority of the companies which succeed in raising funds very early, close down. The reason is, that too much money too early, leads to wild decisions and spending of the funds in formats that will never justify the business model. Cash positive businesses, when funded, grow tall.
What have you learnt in your journey as an investor?
- Always ensure that the entrepreneur you invest in is only focusing on that single business.
- An entrepreneur who is focused and has access to resources that can be leveraged to generate better returns on the investment. is only focusing on that single business.
- Always invest in cash positive businesses and make them grow bigger in a shorter time and take them to bigger geographic territories.
- Monitoring the deployment and usage of funds help a lot.
- Mentoring the entrepreneur along with investments helps.
- Get into investments where you know you can connect your current resources to the newly invested company.
How did you get into the investing or funding space?
I have been an entrepreneur all my life. With age, you have earned a lot of relationships, experiences, and exposures. When you are young, you grow by hiring good employees. When you mature with age and experience, it’s better to engage with entrepreneurs and empower their growth. This thought made me get into investing.
“When you mature with age and experience, it’s better to engage with entrepreneurs and empower their growth. This thought made me get into investing.”-Mr. Agnelorajesh Athaide
Identify passionate entrepreneurs, check their processes and systems, ensure that they are profitable and invest in them as a strategic investor and drive their growth. This is my line of action today as an investor.
What are the easiest thing and toughest things about being an investor?
The easiest thing is to invest in perception and the toughest is to make a wrong choice become correct. Again, the easiest is to invest because someone whom you like has suggested you to co-invest and it’s disappointing when you realize that it’s a wrong investment and then the toughest issue is to exit.
Easiest is to invest because of the aura of a person and then when you face reality, you realize that the aura is way different from the actual outcomes. And then the difficulty is to exit and recover your investments.
What is the common mistake that businesses make while pitching to investors?
- They show an extremely rosy picture.
- They make tall claims.
- They never explain the negatives.
- They overestimate the market.
- They show the incomplete impact of the competition.
- They don’t have a plan B.
How do you spot a good founder?
- He is already cash positive.
- He has an effective, well-performing team in place.
- His team has clearly defined roles and responsibilities.
- His offering is unique.
- He has mapped his growth and the resources required for that growth.
- He has complete domain knowledge.
- He has powerful testimonials in place.
- He has studied the market well and has mapped his competitors well.
- He has small term goals and long-term goals in place with measurable milestones.
What are some of the red flags that you have faced in your investing journey?
- Never invest on the basis of perception or aura.
- Past success is no guarantee for future success.
- Most of the people who get a lot of appreciation don’t get investments or collaborations in reality. The same appreciating people give excuses and stay away. So if you have invested in expecting the entrepreneur’s ecosystem to support growth, you might get surprised that none of them come forward.
- Don’t self convince an investment. Be logical, practical, and realistic about the opportunity.
Mr. Agnelorajesh Athaide has given a guidebook that entrepreneurs as well as other investors can adapt and use to choose their next investment. Investors like him give wisdom and encouragement to entrepreneurs so they can keep moving forward.