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Angel Investments
Understanding Angels, Valuation and Regulations
Definition
• Who is an Angel - Profile
• Motives
• Round Structures
• Ticket Sizes – INR 30,00,000 to INR 6,00,00,000
Startup Stage Parameters
• Idea – Innovation vs Execution
• Validation - Traction
• Team – Experience and Credibility
Terminologies
• Pre-Money and Post Money
• Stock Option Pool
• Liquidation Preference
• Preference vs Common Shares
• Exit
Valuation Methodologies
• Scorecard Valuation – Average Market Pre-Money Value X Weight
• P/E Ratio – ( Expected Earnings X P/E Ration) / ROI Multiple
• How it actually happens – Yes/No vs Value
What do you watch out for
• Expected Dilution over lifecycle of the business
• LP Clause
• Option Pool Dilution
• Legal and Statutory expenses
The regulation barrier
• CASS – Computer Aided Scrutiny Selection
• Section 56.2.vii.b and Section 68
• Alternatives:
• Country of registration
• Bonus Shares
• Don’t raise
Thank You

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