In the expansive landscape of angel investments, few possess the seasoned insight and strategic finesse demonstrated by Chandrashekar Kupperi, affectionately known as Shekar. In this installment of our exploration into the world of startups and angel investing, Shekar unveils the investment thesis and principles that form the bedrock of Peaceful Progress, the venture through which he channels his passion for fostering innovation.
Co-Investment: A Collaborative Approach
At the core of Peaceful Progress’s modus operandi is the principle of co-investment. Shekar emphasizes the importance of not being the first investor; a venture should already have secured backing from a VC fund or an angel fund. This collaborative approach ensures a more robust foundation for startups, leveraging the collective wisdom and resources of multiple investors.
Focus on Revenue-Generating Startups
Shekar delineates a clear criterion for potential investments—Peaceful Progress exclusively invests in revenue-generating startups. Steering clear of pre-revenue-stage ventures, Shekar underscores the significance of a tangible financial track record as a testament to a startup’s viability.
The Crucial Role of a Balanced Team
The human factor is paramount in Peaceful Progress’s evaluation process. Shekar emphasizes the importance of a balanced team, delving into the nuances of team dynamics. Beyond the leadership, he scrutinizes the second line of command, observing their communication, behavior, and attitude through various channels, be it email, WhatsApp, or oral correspondence.
Market Size, Innovation, and Understanding Competition
Shekar places a strong emphasis on evaluating a startup’s innovative prowess and its understanding of the market. How a startup explains its market and its comprehension of the competitive landscape play pivotal roles in the decision-making process at Peaceful Progress.
Ticket Size and Scalability
The ticket size for investments ranges up to 1 crore, with a minimum size of 25 lakhs adhering to SEBI’s minimum investment requirements. Shekar reveals that there’s no strict turnover expectation; instead, Peaceful Progress looks for a 24-month turnover projection with geometric progression and scalability.
Challenges Faced: Mitigating Risk with the 4 M Framework
As an experienced angel investor, Shekar confronts challenges head-on, mitigating risks through the 4 M framework—Market, Model, Management, and Momentum.
- Market: A well-defined problem is half-solved, Shekar asserts. The market should be popular, urgent, frequent, growing, and expensive to qualify as a significant problem worth solving. Understanding the root cause and ensuring user acceptance are crucial steps in the early stages.
- Model: While ideas seldom fail, business models can. Constantly revisiting and challenging the business model, ensuring differentiation, and assessing the capability to execute are fundamental aspects of Peaceful Progress’s due diligence. Profitable monetization and defensibility are key considerations.
- Management: Passion and effort are essential, but Shekar places significant emphasis on a team’s ability to learn and execute. Enthusiasm, he notes, ignites greatness in a founding team.
- Momentum: Metrics and a credible business plan form the basis of assessing a startup’s momentum. Quick iterations, early launches, and a focus on profitability contribute to the momentum.
Challenges in Angel Investing: Networking and Time Management
Beyond evaluating startups, Shekar sheds light on the challenges in angel investing. Securing good deals requires constant networking with VCs, and time is of the essence. Limited funds can sometimes pose constraints while awaiting consent from investors.
Investment Trends and Future Aspirations
Looking ahead, Shekar shares insights into the investment trends observed at Peaceful Progress. While they have yet to heavily invest in deep tech, it remains an area of interest. Shekar expresses a penchant for deep tech, considering potential investments in space tech, biotech, quantum computing, drones, and generative AI. He reveals a keen eye for emerging trends like edge computing, autonomous vehicles, and blockchain startups.
Portfolio Investments: Diverse Ventures
Shekar delves into some of Peaceful Progress’s noteworthy portfolio investments:
- Bombay Shaving Company:
- Overview: Bombay Shaving Company has witnessed a remarkable rise in turnover, approaching 300 crores. With IPO plans on the horizon, they strategically position themselves for a significant market impact. Their exit strategy may unfold through subsequent investment rounds, IPO, or a strategic buyout.
- Future Plans: Shantanu, the founder, envisions an IPO by 2025, underlining their commitment to sustained growth and market leadership.
- Zypp Electric:
- Overview: Zypp Electric operates as a marketplace for Electric Vehicles (EVs), gaining significant popularity in the NCR region. Ambitious plans include deploying 2 lakh vehicles and expanding to Mumbai, Pune, and Hyderabad. Last year’s turnover of 125 Crore sets the stage for a threefold growth this year.
- Expansion: Their vision extends beyond regional boundaries, emphasizing their commitment to transforming the EV landscape on a national scale.
- BankSathi:
- Overview: Positioned as a fintech startup, BankSathi focuses on financial inclusion in Tier 2 and Tier 3 cities, emerging as the third-largest credit issuer in India. Their endeavors contribute significantly to bridging financial gaps in underserved regions.
- Financial Inclusion: BankSathi’s emphasis on financial inclusion aligns with the broader goal of empowering communities through accessible credit facilities.
- SkinQ:
- Overview: SkinQ, with a recent influx of orders from the USA, operates in the field of dermacosmetics. Their foray into global markets showcases the scalability of their offerings and the international demand for their dermatological products.
- Global Reach: The export of dermatological products signals a growing global footprint, underscoring their commitment to providing skincare solutions beyond geographical boundaries.
- Sheru:
- Overview: Sheru, with a focus on EV batteries, stands out by exporting power to the grid. Engaging in a pilot with the Government (BSES Rajdhani Power Limited in Delhi) demonstrates their commitment to innovative energy solutions.
- Pioneering Innovation: Sheru’s pilot project signifies a pioneering approach to energy export, contributing to sustainable practices in collaboration with government initiatives.
- TESSOL:
- Overview: TESSOL, a cleantech startup, extends its focus beyond Indian borders, emphasizing overseas expansion. Their IoT device for energy conservation positions them as key players in the global cleantech landscape.
- Global Sustainability: TESSOL’s international focus highlights their commitment to global sustainability, addressing energy conservation challenges on a broader scale.
- Gaurda:
- Overview: Gaurda specializes in Agri drones, contributing to technological advancements in agriculture. Their dedication to agricultural innovation positions them as key players in the agri-tech sector.
- Agricultural Innovation: Gaurda’s focus on agri-drones aligns with the broader goal of leveraging technology for increased efficiency and sustainability in agriculture.
These portfolio startups not only reflect the diverse sectors Peaceful Progress invests in but also exemplify the fund’s commitment to supporting innovative and impactful ventures. Each startup’s unique trajectory contributes to the broader narrative of Peaceful Progress’s investment prowess.
Conclusion: Shekar’s Investment Odyssey
In conclusion, Shekar’s journey through the intricacies of angel investing and startup evaluations unveils a strategic symphony at Peaceful Progress. His commitment to fostering innovation and contributing to the startup ecosystem echoes not only in the successful ventures Peaceful Progress has backed but also in the mentorship and guidance he provides.
Experience the full conversation with Shekar by watching the comprehensive video on my YouTube channel.
Stay tuned for the next episode, where Shekar shares invaluable advice for aspiring angel investors and entrepreneurs. Learn about the delicate art of balancing a deeply involved professional life with personal well-being. Shekar’s wisdom continues to illuminate the path for those navigating the dynamic world of startups and investments.