Investor Talks: “It is very important for the startup to understand the profile and background of investors”, Megha Jain

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The startup ecosystem globally looks extremely promising with innovative and technologically advanced businesses coming into existence. This is the first time when the people of the world are looking to give their idea a shot and take the leap of faith rather than sticking to their 9-to-5 jobs and killing their dreams. With first-time entrepreneurs entering the world of business, the role of mentors and investors becomes very important. They can help them avoid many mistakes and also come up with better approaches to solving problems.

Megha Jain, the Director at Hem Securities Ltd. has around eight years of experience in the world of financial markets. She also has diversified exposure across various fields and is currently overlooking Hem Angels where she interacts with numerous startups and budding entrepreneurs. In a conversation with team Sociobits, here’s what Megha Jain shared when it comes to investing in the startup world:

What do you think is the future of the startup culture globally?

The startup ecosystem is on a boom and is blooming at a tremendous pace! It is driven by a pipeline of new ideas and entrepreneurs who are majorly supported by a strong education system, a research institution, incubators, and investors along with the constant support of a favorable regulatory environment and policies that encourage funding. This is not only creating a great entrepreneurial culture across various countries but also driving the bootstrapping spirit and removing the old-age tendency to prioritize jobs over charting new innovation courses. Many more Unicorns are on the way!

The startup ecosystem is on a boom and is blooming at a tremendous pace! It is driven by a pipeline of new ideas and entrepreneurs who are majorly supported by a strong education system, a research institution, incubators, and investors along with the constant support of a favorable regulatory environment and policies that encourage funding.

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Is there anything that we can change to develop or give a boost to the startup ecosystem?

While the public sector plays a huge role in launching innovative hubs in various cities of India, the private sector can join hands in improving the startup ecosystem by focusing on the connector’s role. The more connected it is, the more robust the startup ecosystem will be perceived. Hence, it is important for private sector organizations to show interest in local projects and get to know all the people within an ecosystem. Consequently, by using this network resource, they can easily connect relevant people and projects with one another.

How important is the role of mentors when it comes to guiding budding entrepreneurs?

Mentors can play a key role in your business’s success by assisting you in creating a roadmap with a futuristic vision with the help of insights and expertise in the respective domain.  Mentors not only give guidance based on their real-world experiences and networks with other advisors but also help startups in getting physical aid for their startups.

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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?

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Just focus on your innovation, tech, or product with excellence to keep your business sustainable. Funding is just the beginning! Capital shall be available in abundance for the right business. Begin with a long-term vision with global visibility and then there is no stopping.

Funding is just the beginning! Capital shall be available in abundance for the right business. Begin with a long-term vision with global visibility and then there is no stopping.

What have you learnt in your journey as an investor?

Diversifying one’s investment in multiple asset-class especially when it comes to startups, invest in multiple startups who are passionate and have the right amount of traction. Eventually tracking their developments and understanding the venture’s maturity level to be able to incorporate resources in the right manner definitely doubles down your investments in the winners.

How did you get into the investing or funding space?

Our parent company Hem Securities has been associated with being a financial service provider for four decades to an award-winning Investment Banker for ten years. So this has been our area of expertise for long. The idea of something new which could transform the lives of millions of people across the globe always caught my eye and many startups in the fintech space have opened innovative ways of doing business which has led us to learn, mentor, advise, implement forward integration strategy in our business as well and back them with funds.

What are the easiest thing and toughest things about being an investor?

The easiest thing about being an investor is to share an opinion or a piece of advice with the startup whereas the toughest thing as an investor is to share an experience and not advice. Successful angels bring a lot more than money to the table and they do so not by telling founders what to do, but by sharing their experiences, strategies, tricks of the trade, and the outcome that was seen when they were in similar situations.

What is the common mistake that businesses make while pitching to investors?

Too much use of jargon. It is very important for the startup to understand the profile and background of investors before pitching and accordingly align your pitch in a way that the respective investor is able to understand all the nitty-gritty of the business.

It is very important for the startup to understand the profile and background of investors before pitching and accordingly align your pitch in a way that the respective investor is able to understand all the nitty-gritty of the business.

How do you spot a good founder?

  • Educational background of the founders
  • Passion and skin in the game
  • Founders’ Business Values along with their long-term vision
  • Founders’ reaction to failures.
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What are some of the red flags that you have faced in your investing journey?

  1. The distribution of equity to a large number of members, especially if they are relatively inexperienced, can cause future problems and money mismanagement down the road.
  2. Subcontracting technical skills – The majority of startups have an element of technical development, such as website design, product design, or app development. A company that farms out technical skills to third parties, which are not wholly invested in the business, greatly increases the cost and time consumption for them to adapt to the actual need of the business.

A company that farms out technical skills to third parties, which are not wholly invested in the business, greatly increases the cost and time consumption for them to adapt to the actual need of the business.

Would you like to mention your investments?

Hem Angels is the newest addition to our boutique of services and have been India’s one of the fastest-growing Angel networks. We have actively invested in a wide range of startups through our Hem Angel Network syndicate. It has a proprietary curation process and fast-track closure in terms of syndication and fund mobilization which we believe is our USP, scaling up Hem Angels. In the last 18 months, we have invested in 29 early-stage revenue-generating startups investing approximately INR 33CR+ in Financepeer, Edugorilla, Ingenium, Kerala Banana Chips, Expertrons, eBikeGo, Klassroom,  Banksathi, FundFina, Clesnta International, Kredily, Tiea Connectors, Gully Network, Oorjaa, HealthySure, Barneys-Barbew, Doctco, We360ai, Catloging.ai,  The Gaming Project, Immersive Labz, Truly Madly, Trainman, Nutrioze, Collekto, Raskik, Snackible and Jarvis Invest – to name a few.

Today, startups need to focus and believe in their innovation and have faith that their idea has the potential to be one of the ideas that shine at the top of their industries. For ideas like there, investors and mentors will always be available.

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