As part of our ongoing quest to get you meaningful stories and insights from the startup ecosystem, we invited seasoned investor and entrepreneur – Mandar Joshi, for an exclusive interview with BrilliantRead Media. He is an Early Stage Startup Investor, Mentor, Keynote Speaker, Thought Leader, and Business Strategist. His contribution to the startup ecosystem is unparalleled. He is extremely passionate about empowering entrepreneurs through his mentorship and investments.
Some of his key highlights are:
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Successfully negotiated / structured high-value strategic alliances [partnerships, joint ventures, mergers, acquisitions and seed investments into start-up projects]
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Executive / Non-Executive positions on the Boards of Directors / Management Committees / Strategic Task Force.
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Lived in 4 countries, well-travelled across continents, presently based out of Dubai.
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Speaker and panelist at International Conferences on topics related to economics and finance.
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Post-graduated with Double Masters (Management & Commerce) and Chartered Accountant Certified by Institutes in UK as well as India
Let’s learn more about his inspiring journey as an Angel Investor and his advice for the startup ecosystem!
Excerpts from our exclusive interview with Mandar Joshi:
We are aware of your contribution to the startup ecosystem, talk us through your journey, please
In 2015, I left my last corporate job as Group CFO and started boutique advisory in Dubai guiding clients in the process of negotiating mergers, acquisitions, joint ventures and other forms of strategic alliances.
During the early months of advisory, I structured a few VC funding transactions in start-ups. I realised here that the mindset and thought process of start-up founders is so different than that of CEOs of large established corporates.
While start-up founders have big dreams and they put in relentless efforts in sustaining and growing their venture, they sometimes lack financial, legal acumen and strategic wisdom which prevents them from structuring and negotiating ‘winning’ investment deals with angel investors or VCs.
I noticed a huge gap here and a need for strategic advisory for start-ups.
Coincidentally in 2015, I went on a charter train journey across India for 15 days organised by Jagriti Yatra. The train journey focussed on social entrepreneurship with the motto ‘Building India through Enterprise’. Jagriti Yatra happened at the right time in my life and certainly pushed me even harder towards the start-up ecosystem. Guiding start-up founders soon became the purpose of my professional existence.
I started focusing only on start-ups, gradually reducing other structuring engagements. I started mentoring them 1-to-1 and also became part of the core management team of a few start-ups. My equity shareholding in first few start-ups did not happen by investing my money. It happened because I had no choice but to accept equity shares due to the tiny budgets those bootstrapping start-ups were operating on. I exited these ‘sweat’ equity, if I may call it, at excellent multiples in value and soon started investing funds as Angel Investor around 2016.
Till today, I have done Angel Investing in 17 companies, out of which 6 are already exited. I lost money in 2 and made big gains in the other 4.
Apart from Angel Investing, I still mentor and guide start-up founders to achieve the success they deserve. I am publishing a video series of short episodes right now on LinkedIn talking about one challenge per episode. Working on a few other initiatives… too early to discuss them right now. Contributing to the ecosystem whichever way I can.
[LinkedIn Video Series Link – Episodes 5 and 6: Must Watch]
Click on the links below to watch Mandar Joshi’s most popular Startup Video Episodes.
Click on the link below to watch Mandar Joshi’s most popular Startup Video Episodes.
What key factors do you look at before investing in a startup?
First, Founding Team. Second, Business Model.
My investment decision process usually has two stages. If you add up personal meetings with founders and reviewing pitch decks received through LinkedIn, around 100 start-ups approach me every month. I take 5-10 minutes to discard 90% of them. This 90% of rejection has no scientific basis. It’s just my intuition developed from the experience of meeting founders with different personalities and attitudes. If I am meeting the founder personally, observation of 5-10 minutes of his or her behaviour and communication mannerisms is enough to conclude. If I receive the pitch deck, the way information is explained and presented reveals a lot about the founding team.
My simple principle is: If the founder cannot be successful in his life, he cannot be successful in any business, no matter how profitable or scalable his idea is. If you give a stupid business model to a brilliant founder, I am sure, he or she will make something good out of it. But if you give a great business model to a wrong founder, it is almost certain you will lose money.
Now from those 10% start-ups not rejected… yet, I spend a lot of time reviewing the business model, usually a few days or weeks. Here I review everything from market size to competition, revenue streams, cost structure, profitability. I also consult my professional network of experts in that industry sector. Probably meet the founding team 2-3 times with new sets of questions every time. It is a lengthy process, but it is important to go through it to make the right decision.
When you have the money, there is no skill in writing cheque. The skill is writing the right name on the cheque.”
You are always positive and motivated, what keeps you going?
Look. I am a part of an ecosystem where 95% start-ups fail during the journey from business plan on paper to profitable business on the ground. With such difficult stats, I have to be motivated to motivate others. If I am not positive or motivated enough, I cannot survive in this ecosystem.
Also, I love seeing start-up founders succeeding and achieving their dreams. Their energy and motivation are contagious. I see them visualising things which I cannot imagine myself. I see their ‘leave no stone unturned’ attitude. This is enough to get me motivated.
What is one strategy that you believe has helped you grow as a person/investor?
There is no one single strategy to become a successful person or investor.
I think I have pretty strong intuitive powers when it comes to judging a person. By the way, I did some wrong judgements and lost considerable money during the first few angel investments. Probably I learnt from those mistakes and hopefully the skill to judge the founders is getting sharper with time.
I also research a lot. I read about different industry sectors, geographies, economies. I watch documentaries. I discuss with seniors in the start-up ecosystem and talk to experts in diverse fields… finance, technology, law, HR. The intuition or skill to judge the founders is useless if it is not supported by research.”
Lastly, I invest in start-ups which are simple businesses to explain and understand. Of course the underlying tech and strategy could be complex, but the business model must be straight forward. Let me give you some examples of my recent investments in India you can easily relate to;
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ClearDekho sells budget eyewear.
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AutoBrix cleans cars.
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OmBhakti provides cotton wicks for daily worships and prayers.
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InsuranceSamadhan resolves pending insurance complaints.
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Q-In-1 organises live online classes for kids.
So, I generally don’t get into overly complex innovations or extremely futuristic technologies or money-burning social networking models. There is nothing wrong about them. It’s just that I like simple businesses which have direct ways of making money in the immediate future.
In your opinion what are the keys to startup success?
Execution is the key.”
Business ideas can occur to anyone anytime. How many social networking platforms failed before Facebook? How many e-commerce portals failed before Amazon and Alibaba?
There is unnecessarily too much emphasis on innovation. Yes. Innovation is important but it is not everything. Execution has its own challenges which are sometimes underestimated by start-up founders.
I dedicated one of the episodes in the video series… I think episode 4 to this topic
Click on the link below to watch Mandar Joshi’s most popular Startup Video Episodes.
Another important point is, the start-up founder must have an attitude for infinite growth. I have seen many start-ups getting stuck at a point after initial growth. Either they get complacent or they have no clue how to scale beyond a point. Here the role of the mentor or Board of Advisors becomes crucial.
What advice would you give to someone starting out?
First, Estimate the size of the market for your start-up correctly. Understand the demographic criteria involved and segment customers accordingly, if necessary. I personally don’t invest or become part of the venture which eventually won’t operate in at least 10 Billion USD market.
Now that doesn’t mean you have to start big. Start small. Get complete control over a small section of the market based on geography, age group of customer, financial level of customer and only basic 1-2 services or products. Then grow gradually.”
And most important, secure yourself financially for at least a year. I have immense respect for founding teams which bootstrap till they reach a prototype or POC stage. You may not always be lucky to get an Angel to invest in you based on just a business plan on paper, or even worse, in your mind. I have seen so many founders who get financial stress and waste a lot of their time trying to get investors rather than focussing on the service or product they are building.
There is a dearth of women entrepreneurs in the startup ecosystem, what advice would you give to aspiring women entrepreneurs?
I feel both genders have complementary skills and talents equally important for a successful business. In developed countries and in big cities in India, both genders have almost equal opportunities. Women entrepreneurs in underdeveloped countries and in Tier 2, 3 and 4 towns and villages of developing countries still face acute social, financial and experiential challenges. Thankfully, this situation is rapidly improving.
For me, the gender of the founder doesn’t matter while investing. What matters is the attitude, communication skills and vision.
My advice to aspiring women entrepreneurs… throw away inferiority complex just in case you still have it. There are many examples of women who are global leaders today, in business, in politics, in sports. Get your business idea to the right incubator, accelerator, mentor and do everything that you can.
Just surviving or growing your start-up is not your ultimate objective.
You must thrive to become the role model for another aspiring woman entrepreneur.
Follow Mandar At:
LinkedIn – https://www.linkedin.com/in/mandarjoshidubai/
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