What comes to your mind when you say ‘Startup’? Let me improvise the question a bit. Whose image comes to your mind when you hear the word Angel Investors?

Chances are that when you hear the word startup, you might think of highly successful ones like Zomato, Flipkart, or maybe Cred. You might envision Artificial Intelligence, new innovations, raising funds, and most importantly Shark Tank. When you think about Angel Investors, you might imagine popular Shark Tank judges like Ashneer Grover or Anupam Mittal, or Namita Thapar.

Now, Have you ever wondered if ever these angel investors had a phase where their investment actually resulted in losses? Have you ever wondered what would they do if they find out that their investments turned into sunk investments? Have you ever wondered how many startups shut their shop within just 5 years of operations and the reasons behind it? Have you ever wondered what % of Angel investors fail every year in India?

Unlike many who believe that startup is a recent phenomenon, it’s clearly not. Infact if we see the history of the past 150 years, one can notice, every 20-30 years there has been a revolution. For instance, do you know that telephones were introduced for the first time in 1876 or the first car in 1886, or maybe the year airplanes were introduced was 1903? Ok, these were slightly tricky ones. Fast forward to the year 1938, when the world got introduced to a ball pen.

OK, enough of inventions, let’s talk about famous revolutions like the IT revolution of the 1990s which led to the IT Boom & lasted till the early 2000s. Infact, IT Revolution was a key driver behind uplifting the economic status of so many people, empowering them, and enhancing connectivity. Infact it won’t be wrong to state that IT has played a very key role in giving rise to the Startup revolution since the 2010s.

This brings us to 1 person who is not only an entrepreneur himself but has supported & continues to support many like him that are leading upcoming startups. Let’s give you a hint- He is the Founder of Shaadi.com but ironically is an eligible bachelor himself. Jokes apart he is 1 of the 5 judges in the popular reality show Shark Tank India. You might have guessed it by now, it’s Anupam Mittal.

Anupam Mittal is counted as one of the top angel investors in India. He has invested over ₹2.9 Cr. in over 240 companies including iconic startups like Ola, Cabs, Big Basket, etc. & today his net worth is around 20-25 Mn$.

Recently he claimed that, of the 240 companies he invested in, at least 60-70 have shut down their business which is a staggering 25% or ¼th of his total portfolio. Isn’t it surprising that despite 25% of startups failing he has made a fortune out of the rest of the investments signifying the importance of portfolio diversification?

Infact, taking you all back to 2022, according to NSE data, Angel Investors have lost close to 5.7 Bn$ which in Indian terms roughly translates to ₹47,000 Cr. So, in spite of all these investors having all the relevant information w.r.t startups, be it of management or the financial well-being of the company, why is it that investors are incurring such a heavy loss? Is there a problem in their strategy or is there a problem with their methodology or the fundamentals aren’t very clear? Maybe the reason is a combination of all of them. These are concerns that need to be answered before any potential investor plans to invest hard-earned savings into a business.

Too many questions to digest, right?...

According to Venture South.vc, at least 50-70% of angel investors face losses in the initial years. Infact many reports & industrialists like Anand Mahindra have claimed that 90% of startups in India shut their shops within 5 years of operations due to multiple reasons ranging from lack of funding to products not finding attraction in the market.

Yet the number of funding done by Angel Investment deals has only increased in recent years, from 308 in Q1 of 2021 to 506 in Q1 of 2022, showing a year-on-year growth of 64%. This shows immense potential for growth.

The question that is bound to arise is if there are so many failures around you then how do top Angel Investors pick the right startups & turn them into startups with market cap worth Billions of dollars? What strategy do Angel Investors like Ashneer Grover & Anupam Mittal use so that whichever startup they choose for investment turns out to be so successful? What do they see in startups that other ordinary investors aren’t able to see?

At Planify, we started your investment journey from Pre-IPO & Unicorns. When we started, we had only 12 investment opportunities, but as of today, we have over 250+ exclusive investment opportunities in which we have successfully had investors exit in 34+ instances registering returns of a minimum of 250%+ and at times as high as 1000%-2000%.

We ensured our investors achieved great success by investing in Planify-backed startups where they continue to gain returns up to 50%+ annually. All of you have highly appreciated our in-depth content on Pre IPO & Startups.

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