Jignesh Kenia is a chartered accountant and has been an angel investor ever since 2018. He has invested over $250,000 in 50 startups and exited seven of them with an internal rate greater than 150%.
Jignesh has been an investor through the angel investment platform Inflection point Ventures (IPV), creating an environment that benefits both investors and entrepreneurs.
Gurugram-based IPV was established in 2018. It has maintained a narrative that startup investments do not pose a high risk and offers an opportunity to investors with comparatively low capital.
IPV was founded by financial professionals with decades of experience.
Ankur Mittal (Co-founder and COO of IPV) stated that “our core objective was to democratise angel investment.”
The early-stage angel investing platform currently has a investor base of more than 7,200 people. More than 60% of these investors are CXOs from around 45 countries.
Ankur claims that the co-founders, which included him, created their own channels to access funding.
Founding partners realized that early-stage investments in startups were often personality-driven. This means that they were based on decisions made and supported by an individual with a high level of network within the ecosystem.
Ankur says that this investment philosophy was influenced by who is investing and not whom.
IPV created its own network, consisting mainly of CXOs from companies. The network also included professionals who were experts within their fields, such as finance, tech, or HR. This led to the creation of startup deals.
Ankur says, “We deliberately built a CXO driven platform, which ensured better deal flow and deeper relationships within our ecosystem.”
IPV’s core objective was to generate a return on investment (RoI), as many investors were contributing some money from their salary to this funding activity.
Concentrate on the returns
IPV created an extensive due diligence procedure for any startup investment to ensure higher returns. This was supported by its CXO network which included sectoral experts.
Ankur states that IPV has created a proprietary scorecard. It looks into over 400 questions and examines 30 variables. It receives inputs from investors based on feedback received by startup founders.
Ankur says, “We combine science and art of investing but one cannot overlook the element of luck.” Ankur adds that “we are continually improving our selection process which has reduced failure rate for startup investment.”
Ankur claims that out of the 132 IPV investments, only four startups have failed capital return, and 55 have received exits or follow on funding.
Winter funding is not available
Ankur believes that IPV is making more deals this year, despite the current funding slowdown.
The platform adds about 100 investors per month. 80 percent of these are referrals.
Ankur says, “This environment works well for us because people will invest in opportunities which are well-researched.”
This has had an impact on the amount of investment IPV makes in each startup. In 2021, the average cheque size was Rs 2.5 crore. This has risen to Rs 4 crore by 2022.
Any investor can join the platform today with a minimum of Rs 2.5 lakh. IPV currently has more than 7,200 investors and has made 132 investments totaling Rs 520 crore.
Angel investing platforms can be thought of as crowdfunding, but they are structured differently. Deals are sourced from the market and presented to investors who decide whether or not to invest.
Ankur also mentions March 2020 as an example. This was when the first nationwide lockdown to combat COVID-19 was announced. Startup cheques were then cut off. IPV invested in Otipy and Samosa Party startups, BluSmart, Toch, and all have since raised their next round of funding.
Ankur says, “We were willing and able to write the cheques but we did not abandon our due diligence process.”
Both investors and entrepreneurs will benefit
Both investors and startups have benefited from IPV’s investment philosophy. Investors have the opportunity to invest in good assets, which Ankur believes has created an equal playing field.
Startups get access to more than just the money they raise through the platform. They also have access to market connections and strategic inputs thanks to the CXOs on IPV.
Ankur says, “We identify areas where startup founders require help and our network helps them.”
IPV is an investment platform that can be used to invest in startups. It is typically at the pre-series and seed stage of funding.
IPV is competing with other angel investing platforms such as Mumbai Angels (IAN), Ah! Ventures as well as incubators or accelerators.
Ankur believes that IPV’s strong diligence process and support after investment gives it an advantage in the market. It has strong relationships with universities, family offices, and other VCs which help to support its startup portfolio.
An investor stated that IPV’s lower investment threshold is the main difference. This is in contrast to other platforms where the investor must invest more than Rs 5 lakh.
Ankur is very clear on the startups IPV would like to invest in, given the current funding environment. It will not invest if they cannot show a runway of 18 months in terms capital availability.
He mentions that IPV advised its startups during the boom period of 2021 to raise as much capital possible because you never know when things will change.
This platform also launched a new VC Fund called Physis Capital in the early part of this year. It has a $50 million cap to invest in pre-Series B to Series A startups.
Ankur states that Physis Capital will permit it to invest in startups in the IPV portfolio which are absolute winners.
Ankur says, “We have never believed that FOMO (fear-of-missing out) investing is a good way to invest. IPV has created an environment where one can earn the trust of investors.”