Pushkar Chatterji, Founder & C.E.O., AiVA
During what phase of your startup development have you started to work with angel investors?
I started working with angel investors from the inception of the start-up idea. AiVA’s first round of
funding was within a month of our incorporation, and this was supported entirely by angel investors.
Did you choose your angel investors? What were the thinking and criteria behind?
Our intention from the beginning was to look for smart money. As an early-stage start-up, the funds themselves are critical. However, for a successful commercial return on these funds, we were looking for angel investors who could leverage their existing professional experience and network not just to make warm introduction to potential clients, but also to advise us on the technical and organizational aspects.
As a start-up we knew that we would not have the market presence, track record or credibility that clients look for when they engage with providers. This would have led to a huge amount of time and money (both very precious resources for a start-up) being put into cold sales campaigns that have a next-to-zero conversion rate.
Having the support of angel investors in making a warm introduction changes the game at an early stage, opening doors and creating opportunities that, perhaps, would not have existing if we tried to go at it alone. There is a clear co-relation between having a high number of potential leads and the possibility of increased revenue growth. And revenue growth is the sole focus for us at this stage of our journey. A big shout out to Vlad Sarca (TechAngels), Mariel Petric (T.A.N.), Emmet King (T.A.N.), Florin Pop (T.A.N.) and Smaranda Ignat (PropTech Romania)!
In addition, working as a small team focused on bringing our idea to life, we are often likely to miss the forest for the trees. The furious focus on the day-to-day and short-term objectives leaves us with little time to step back and consider the longer-term. Having angels with experience in both business and technical domains allows us to benefit from their inputs and keeps our short-term and long-term goals aligned. They help us identify things we are not thinking of right now but will impact us soon if we don’t address them. In hindsight this has been invaluable for us. Andrei Bara (T.A.N.) and Cristian Stancalau (T.A.N.) for their help!
Did you choose to work with one or with more angel investors?
We chose to work with multiple angel investors rather than just one. The idea was to try and expand the diversity in experience, background, and network that AiVA would have access to.
Looking retrospectively how was your cooperation with the angel investor(s)?
AiVA has been fortunate with the level of involvement and cooperation of our angel investors. While the degree of engagement has varied – this is to be expected as not everyone always has the time -, we have had the privilege of informal access to almost all our angel investors. Whether this is in the form of text messages at 00:30 or Zoom calls on specific concerns/hurdles or unscheduled phone calls. The most valuable part has been the shared goal of AiVA’s commercial success that the angels and I continue to share.
How did the angel investors contribute?
I would bucket the contribution from our angels into 3 categories:
- Commercial: The most important contribution has been the introductions to potential clients and new sales channels that AiVA has received over the months. This directly impact the growth and expansion possibilities for AiVA which in turn drives shareholder value.
- Technical: Having a clear roadmap for our technical journey is critical to our success. But there is just so much foresight that a small team can have. AiVA’s angels have helped fill this gap by drawing from their professional journeys and helping us stay pointed in the right direction.
- Corporate: Whether it is helping with fund raising, or advising on governance, AiVA’s angel investors have played an active role in helping us line up the ducks and stay prepared for what is to come. While this is often seen as a ‘boring’ administrative category, it has been key to our success so far.
In what areas was the cooperation the most useful?
Commercial. The key parameter for a startup at our stage is revenue growth. The potential that angel investors have helped create has been the most useful by far.
In what areas you couldn’t get specific help from your angel investors?
It would have been ideal if all our angel investors would have agreed to work full-time for AiVA. For free! Jokes apart, there has not been an instance, so far, where we have looked for help and not received it from our angel investors. Again, not everyone can or will step up collectively – that’s an unrealistic expectation. But we have always had multiple angels answer our SOS.
If it would be to start all over in this relationship, would you do the same? What would you change?
Staying closer to our angel investors. Investor relations is not a function only reserved for large organizations. It is key for even early-stage startups like us to communicate frequently and keep our shareholders updated with what is happening. I say this not because it is the best practice from a corporate governance point of view, but also because well-informed, updated investors are able to give us better advice.
Would you say that the angel investors supported you in a significant way, or it was difficult to gain access to them as a resource?
Over-all the support AiVA has received has been very significant. At an individual angel investor level this will vary – but again, this is not unusual. Different angel investors bring different skills to the startup and not all skills are needed at all times.
Do you have now a preferred way to work with an angel investor?
Keeping the interaction informal with our angel investors helps. Not only does that help creativity but it also helps break down any potential communication barrier(s). And communication is key.
What advice(s) you could provide for a startup looking to find angel investors?
Don’t be afraid to say “no” to potential angel investors (politely, of course). Actively seek your preferred profile – particularly how would that profile help your startup. The angel investor who writes the largest cheque may not always be the best fit for you and/or your startup. Seek angel investors who share your enthusiasm (if not your passion) in your endeavor. Look for angel investors who you can connect with personally and have a shared value system– it’s a very close-knit family especially at the early stage and any potential founder-investor misalignment can be very distracting and detrimental for the startup.
Once they identified the investors, what would your advice be for your fellow founders to engage with angel investors?
Be open to advice. Even if it is critical advice. As much as I hate to admit it, a founder is not a God. We don’t know everything and cannot see all possible perspectives. Use your angel investors not just as a sounding board, but also for critique. The final decision will be yours as the founder – but you owe it to your startup that you have looked at all possible aspects. Use your angel investors to make sure you are doing this.
Communicate, communicate, communicate. Keeping your angel investors updated with progress is not just what they expect from you. But it also comes back as benefit for you as a founder as better, more focused advice / help from them.