Suneel Aradhye, management consultant, ex-Group CIO, RPG Enterprises, and CIO Angel Network investor, explains why CIOs mustn’t be motivated only by ROI when investing in startups. By Shweta Gandhi
Suneel Aradhye has been with CIO Angel Network (CAN) since day one, and has seen the network grow and establish its roots in the startup and investor community. A CA by education, Suneel brings a unique blend of finance and technology experience to the table having worked in diverse businesses as the Group CIO at RPG Enterprises, CIO at Essar, GM – IT at Lupin Pharmaceuticals, and AGM – IT at Cadila Pharmaceuticals. Having heard pitches from about 60 startups in the last year-and a-half, Suneel says the journey so far has been exciting and enriching. He says quite a lot of proposals are mere improvements of what has been trending in the global scenario; genuine originality has been rare.
That’s when Suneel realised that as an angel investor his duty was more than that of an accredited investor providing financial backing. “As a group of CIOs, we have invested over a crore each in three startup companies in the last 16 months—InstaSafe, PayTunes and Anakage. A couple of startups have also benefited from our validation of the idea and term sheet by leveraging it to get better terms elsewhere. We have been choosy because we have been looking for some differentiation—we want propositions that we can add our value to and help them grow,” he says. He explains why it’s important CIO angel investors bring more than just money to the table.
1. It’s an opportunity for mentorship
“The investor is able to lead the way for the entrepreneur. He is able to connect the entrepreneur to the right people and provide the significant support and hand-holding that is required. So far, my experience as a mentor has been good—but there is a fine line that we need to draw between providing advice and leading the execution. As investors and mentors, we play a limited role in their business. Even being equity shareholders doesn’t give us the right to force our opinions on them. They have the right to accept the advice we provide, and they are prepared for it, because they know our wealth of experience. We have to play the role of a catalyst. CAN is already in Delhi and CIOs from other locations are also keen to come onboard, I am sure we will add couple of more locations this year. The CIO fraternity is very close-knit—together, we bring in industry and tech experience and get startups exposed to the needs of different business verticals while also bringing a customer perspective into their offering and approach.”
2. You’re helping sustain someone’s dream
“Startups must learn how to position themselves. Entrepreneurs may be from a strong tech background, but they don’t have the experience of running a business. I come from a finance background—I’m not a techie—but I am able to tie business and tech knowledge together as I’ve been handling IT for the last 10 to12 years. I look at business development, strategies, pricing and costing aspects in the startups. The ideas I have come across are very fresh, but entrepreneurs often fail to fathom the scalability of their project—finance and tech help in many ways, but startups need to have a commercial aspect as well. They are always in a hurry to raise money, grow in valuation and often lack the right skill set to sustain and grow in a steady manner. Investors can help entrepreneurs sustain their business and build it by thoroughly integrating all the aspects of the organisation. Enterprise business especially doesn’t come easily, and startups need some patience.”
3. You can be a support system for businesses
“It’s important to remember that through our funding we are helping develop the spirit of entrepreneurship and help this whole ecosystem grow. Earlier, entrepreneurs had to figure out their plans on their own, or take advice from friends and families, which may or may not be the right thing to do. Now, investors hear their pitches, gives unbiased opinions and judgements to help the entrepreneur follow his/her dream. Moreover, CAN is a group of CIOs from different industries—banking, pharmaceuticals, engineering, etc—and we are able to bring in multiple experiences that will help the startups grow without floundering. We always inculcate the practice of first building a sustainable business and then developing that into a profitable one.”
4. Your unique perspective will be appreciated
“Handling IT operations for large companies helps CIOs bring a perspective to the everyday IT affairs of a startup. The entrepreneurs could be simple techie guys with no understanding of financial risk management. Applying the knowledge gained from CIOs can be a huge learning for them, but it is also important for us investors to understand the psyche of the entrepreneurs. They are a highly enthusiastic lot, fearless and ready to do anything. It is vital to not dampen their spirits with practicality, but channelise it in a way that benefits both, the investor and the entrepreneur. Don’t try to run their business for them—keep the spirit of entrepreneurship alive.”