Angel Conversations | With Srinivasan Sridhar

We caught up with Srinivasan Sridhar, a former banker & consultant turned angel investor who is an active member of 1Crowd investor community as well as a mentor, for his thoughts on start-ups and angel investing.

Srinivasan-Sridhar-PictureSridhar is a financial services expert with over 30 years of experience gained internationally and in India. He was with Citigroup for 28 years and has worked in 6 countries across Asia, Africa and Europe. Some of the leadership positions he held with Citi included being CEO for three countries, Corporate Bank Head for India, Transaction Services Head for Africa and Bank Services Group Head for Central, Eastern Europe, Middle East and Africa.

Having been away from India for 20 years, he was keen on returning and finally made the move in late 2012. In early 2013, he joined Oliver Wyman in India. While globally a large organization, it was relatively small in India at that time and almost had a start-up kind of mind frame. He worked across multiple roles including as Partner and as India Head. After spending 4 years in these full-time positions, he transitioned to a part time role as an advisor. He spends the rest of his time in advising and being a board member at various companies as well as mentoring companies, primarily in the financial services space.

Q. What interested you to begin investing in start-ups? What were your motivations behind angel investing?

In the early days of my career, even before joining Citi, I was very keen to be an entrepreneur myself. I wanted to do something on my own, I did fool around for a few months trying to do a start-up but eventually moved to a more traditional career. Deep down there was always this urge in me and this way of supporting start-ups (angel investing, mentoring) is a vicarious way of doing it myself. Having come back to India, I had a deep rooted emotional connection and desire to help young entrepreneurs in their start up journey. My motivation was never money; I wasn’t hoping to invest in the next WhatsApp or Apple (if it happens, wonderful!). But the key driver is about helping young people.

Q. How long you have been active in this space? How did you get started? Tell us about your most enriching/ rewarding experience in angel investing. And the worst experience.

My brothers are entrepreneurs as well, and I helped them by chipping in as an early backer, though those may not strictly qualify as angel investments – in the sense that you do not critically evaluate the business parameters in a professional way, but if you do count that then I started around 15-20 years ago.

Most enriching experience and the worst experience – frankly both are out in the future. When I got involved with 1Crowd – it was primarily because my friends were starting this company and I was excited to reconnect with them; it was an enriching experience reconnecting with Anil and Anup (co-founders at 1Crowd). Anil and Anup are not exactly young which also drew me into this field and so the process of getting into angel investing was enriching in itself.

Q. What do you typically look for while selecting your investments? Is it the team, idea, scale, market, IP, business model or something else?

It links back to the first question on the motivations behind angel investing. I want to help India, its people, in my own small way. It is more a vicarious way of pursuing what I’ve wanted to in the past. As a result, I focus on the team, I try to identify with them (not saying that I’m looking for a Sridhar 30 years ago!). But the kind who I am comfortable with and want to support. Team is number one. Second is the theme or what problems are they trying to solve. Is it something I’m passionate about or feel interested in? So rather than focus purely on IRRs and ability to make money, I typically look for the team and the theme that I can identify with.

Q. This leads us to our next question – what are the kind of start-ups that you would like to back?

What I’m interested in and what resonates with me is what I have recently invested in – healthcare and education – it links back to my motivation to help people. I’m also inclined toward fintech as it is something closer to my previous life.

On the team, apart from what I said earlier, I would also like to see some work experience – have you rolled up your sleeves and seen how things work or are you just an idealist. There is no substitute to real world experience. I mean they may be the smartest people around, but to fall and endure the pangs of real life, that is completely different.

Q. What are your views on how the Indian start-up landscape has panned out?

I’m not sure if I know a lot about this, but as an investor I can share my two cents on this (do take it with a pinch of salt, though!). Start-ups that seem to be get funded are mostly in tier 1 and tier 2 cities. I don’t know if this is because the ecosystem is not strong enough elsewhere, or the ideas are not sound compared to bigger cities, but most statistics and case studies on start-up funding point at metro cities and one level below. There must be something going on somewhere in smaller cities as well, but they never seem to come up or get funded. I just keep wondering where are the Meeruts and Agras and Ballabhgarhs.

The other thing I have noticed is that there are almost no women in this space. Even for 1Crowd, I would love to see start-ups being championed by women.

And finally, what strikes me is that the teams of start-ups in this day and age do not have any real experience. It is usually comprised of people who think start-ups are glamorous and jump into it right after graduating from illustrious institutes. From what I have observed outside India, start-up founders usually have a few more battle scars and a lot more experience. India on the other hand has a lot of young people starting up.

But things are changing as these guys fall, fail and realise that real world experience matters a lot more than just being smart.

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