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“I don’t invest in paper planes”

What does Sunil Chandiramani, angel investor and CEO, NYKA Advisory Services, look for in a startup? Shweta Gandhi finds out.

Sunil Chandiramani is a name and a force to reckon with—currently the CEO at NYKA Advisory Services, he works with enterprising entrepreneurs, helping them design and implement initiatives in the areas of corporate strategy, governance, capital management and operational effectiveness.

Prior to this, he worked at Ernst & Young LLP for 25 years, where he was responsible for heading the Advisory Practice, while also leading the development of the Global Innovation Strategy for EY Global. Regarded as a visionary, thought leader and strategic innovator, Sunil is also an active angel investor with the CORE Angel Network (CAN).

“I’ve been an angel investor for over 18 months now and it’s been a rollercoaster ride,” Sunil says. “It has been interesting; I have some investments which are doing well and some which aren’t. So I’m not sure if I’m paying for the thrill or the nervous excitement that comes with a churning in the stomach,” he laughs.

So far Sunil has invested over Rs 1 crore in what he calls “a fairly mixed bag of investments.” The list includes Atlanta Healthcare (an air purifier company), Instasafe (an online security company), NextGen (providing cloud-based solutions for sustainability and CSR), Jarviz (a mobile security company), the popular Android app, PayTunes, and a retail shoe store Heel & Buckle among many others.
So what questions does a seasoned investor like Sunil Chandiramani ask himself before signing that cheque?

Is the idea unique?
“The first part of my research involves looking at the uniqueness of the business idea. It must solve a problem that will delight people, the value proposition is clear and there is a revenue model that I relate to. Finally, I also see if the solution is scalable and if it will capture market share. I also evaluate the competition and assess the failures that may come.”

Do the entrepreneurs have a plan?
“The second part includes looking at the people who are presenting the idea. I assess how much they really know about the business and what it will take to deliver. I am not attracted to dreamers who have no idea of what it will take to get to their goal.”

Are the entrepreneurs passionate about it?
“The third part is to see how passionate they are about their idea and how well they are able to discuss their ideas in-depth. Ideas are always large but implemented in parts and hence being clear which is piece first and which next demonstrates clarity.” The other background research he conducts is double-checking the credibility of the entrepreneurs.

How much have they invested in the project?
Sunil also looks at what the entrepreneurs themselves have invested in the project, since it showcases their conviction and drive towards their company. “They must have invested upfront. What I also consider is: why is it so necessary for the investee to succeed? Why does the investment and idea matter to them? What does it personally mean to them? I need to see that commitment in the entrepreneurs,” he explains.

Is this just a paper plane or a sound business idea?
He also emphasises on the fact that he likes to see a proof of concept and a clear, visible plan that will generate revenue. “I don’t like funding paper planes. I like to invest in a sound business or in someone who’s trying to build a good business—and I do value the entrepreneur’s maturity as well. I avoid businesses which are built on cash burn—there is difference between investment and cash negative businesses.”

What do the other co-investors have to say?
The final tick comes from brainstorming with industry people. “Evaluation plays a fair bit of a role. I like to see who the other co-investors are and discuss the idea with them. Sometimes we have the same thought processes and that’s the final check in the list,” he says.
Though there are a lot of startups coming up, Sunil is of the view that there are more entrants in the services sector than the product sector. He also stresses on the fact that large companies need to do much more to encourage and promote startups by adopting their solutions and working with them. He continues to be excited about startups and in his words, “Startups are here to stay, they will create new business, business models and innovate. Working with them gives me a high!” 

Categories:   People, Interviews

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