Dalal st has a new portfolio

1. Dalal St has a New
Portfolio: Startups
Entry of regular stock market investors
fuelling a new frenzy in startup funding in
the country

2. Contd..
For Ashok and Anirudh Damani, the meeting with the 18-year-old -one of
those self-styled `futurepreneurs' one keeps hearing of these days -seemed
futile. Nonetheless, the father-son duo obliged as this tête-à-tête was lined
up by Venture Nursery, the angel investor group that the Damanis were a
part of.
Minutes later, a lanky high schooler walked in. His tattered jeans, casual
stone-wash shirt and a stubble masked all sense and purpose of highstreet
business. “We were discussing business and capex with a schooler. At first we
weren't sure; but as we progressed, this guy made sense. After a few more
meetings, we decided to invest in Oyo Rooms,“ says Anirudh Damani, whose
father Ashok holds trading rights on major stock exchanges in the country
and runs a few proprietary trading books.

3. Contd..
For decades, the Damanis have been tracking the stock-ticker.They knew the traps
and pitfalls of investing in listed equities. But startup funding was a new animal.
Along with a few other investors, hey worked out a valuation ma rix and wrote a
cheque of ` . 3 crore o bankroll the young man. Oyo Rooms, an aggregator of rooms
in budget hotels, was valued at ` . 1,400 a share. The entry of regular stock market
investors like Damanis is uelling a new frenzy in startup unding. In 2014-15,
Mumbai Angels, a platform for angel investors, screened more than 500 business
proposals -the highest it has handled in a year till now. About 10% have received
funding as against 1 or 2% in the past, said a Mumbai Angels member.
In a portfolio of 10 startups, 3-4 investments have to perform exceed ngly well to
make up for other bets hat backfire, says Sanjay Sinha of Citrus Advisors, which
recently nvested in 2 technology startups.
The numbers and arithmetic are amiliar. But it hasn't slowed the rush of investors.

4. THE LURE & CHARM
In less than two years, Oyo Rooms raised three more levels of fund . 6,000 a share, then at
ing-first, at ` . 36,000 a share and the last one at ` . 1.10 lakh per share -multiplying ` the
value of Damani's stake over 100 times.
“Angel investing is tougher than picking listed stocks... The risks are larger; so are the
gains,“ says Ashok Damani, who currently holds shares of more than 30 startups in his
portfolio. Few listed equities, according to him, ride on new businesses or ideas. “Besides,
you are aiming at 5-10 times higher gains if you are investing in startups. The best that
equities can give you is 15-20% a year,“ he said.Startups like Oyo Rooms, online beauty
store Purplle.com, selfdrive car rental provider Zoomcar.com and credit scorer Inventure,
among others, are attracting fund ing assistance from investors, who otherwise parked
money in listed equities, bonds and real estate.
They are drawn by comparatively small-ticket investments and lure of higher returns.
Most of these companies have turned two to seven times more valuable in the past two
years, post ing significant gains for sharehol ders.

5. Contd..
Take the case of Purplle.com: the share has gained from ` . 2,000 a
share in 2013 to ` . 6,000 per share currently. Zoomcar.com has al ready
received institutional fund ing from Sequoia Capital at eight or ten
times valuation. Start-up watchers expect businesses like In venture to
gain 30-40 times in value over the next few years.
“Angel investing is no longer the hobby that it once used to be. It is
now an emerging asset class for HNIs, who up till now invested in
equities and bonds,“ says Padmaja Ruparel, president of Indian An gel
Network. “Angel investing would probably offer the highest gain among
most asset classes. The returns here are real and not MTM-linked,“
adds Ruparel.

6. SUCCESS RATE
Angel investing is about betting on ideas and a bunch of dreamers.
Investment horizon is about five to seven years but a profitable exit could
take longer.
“Success rate of startups could be plotted on a bell-curve. In a portfolio of 40
startups, about 10% end up giving blockbuster returns often as high as 20-
100 times. Almost 20% would perform fairly well, about 50-60% would just
yield principal plus 10% interest and 10-15% would simply fail. When I say
fail, I mean we'll have to simply write off those investments,“ says Anirudh
Damani.
Picking an idea is critical. There are times when investors park their funds in
grandiose business plans which may turn out to be either unrealistic or
commercially unfeasible. Such investments may be a drag on the portfolio.

7. Contd..
“Most startups we find in India are copy-paste ideas from the west.
In fact, you'll be able to find parallels in 90% of the cases presented
before you,“ says Ajit Surana, managing director of Dimensional
Securities, who started investing in startups five years ago and holds a
portfolio of 20 companies. Startup investors check promoter
background, growth opportunities, and scalability of business just as
they do before putting money in an IPO.But while startups bank on
ideas, veteran stock market investors lay equal importance to
credentials of men behind such new outfits before committing funds.
“If the management is no good, it's no different from investing in a
penny stock,“ says Surana. After all, no Dalal Street man ever dreams of
ending up a broken angel.

8. For details and bookings contact:-
Parveen Kumar Chadha… THINK TANK
(Founder and C.E.O of Saxbee Consultants & Other-Mother
marketingandcommunicationconsultants.com)
Email :-saxbeeconsultants@gmail.com
Mobile No. +91-9818308353
Address:-First Floor G-20(A), Kirti Nagar, New Delhi India Postal Code-110015