Angel Investing is an opportunity to pay it forward: Madhusudanan R, Co-Founder, M2P

Madhusudanan R , Co-founder of M2P Fintech , talks with Sagrika Shah about his journey as an angel investor, including how he raised funds from angel investors during the initial days of M2P. He sees it as an opportunity to pay it forward, and invests only in companies he understands and can add value. If these two don't tick the box, I will pass it, he said. Edited Excerpts:?

Q. How was your experience of raising angel rounds?

We were lucky because of angels whom we went to kind of understood, but my advice to founders is actually to test out with micro-VCs and angels. Founders can use them to refine their pitch, every investor out there is spending time to understand business, and it's their job to take meetings and they might turn it down. It's okay to be turned down.?

When Covid-19 hit, I spoke to 45 VCs, collectively spending 7500 minutes to refine my pitch. It is always about founders talking about their story, making sure they can connect to their investors. It is more iterative, and the founder has to learn this by himself. Prepare for the bad outcome, and you can only get better from there.?

Q. When should founders seek funds from Angel Investors??

Different businesses have different capital requirements, which entirely depends on how much runway founders have with their own capital. For instance, if it's a B2B business, one may not need any significant money to reach product market fit. So it is contingent on those factors, but if you are at a point where something special you're working on and confidence is demonstrated with product market fit, founders can go out and seek capital.?

Q. How does strategic angel investing work?

There are three aspects: Expecting certain returns on a standalone basis, directionally if you're confident you end up investing. Second, When I invest, I always ensure what value I can add, unlike financial investors who only look for returns. Money is available in plenty; why should the founder choose me? There are aspects which are beyond financial capital. Third, just a stamp that you are backed by the right people and validation. The fact that Amrish, Jiten, and Kunal have been founders themselves and backed us gave us a lot of credence to the business.

There is merit in looking at operators who are also angel investing; that's why you see this wave of successful entrepreneurs investing or paying it forward by backing some of these companies.?

Q. How's the relationship between an angel investor and founder?

In my experience, an angel is not someone you seek advice by not paying for it; they are paying money to get a seat at the table. That relationship is unique in so many ways.?

We have had many conversations with Amrish Rau in our journey. It was not required for him to spend that time or for Kunal Shah, when I'm in Bangalore, to spend some time with him just talking about our business, life and much more.?

In some ways, it is paying forward when you help that founder to feel in a zone of comfort and talk about things often not spoken.?

Q. Do you have a checklist approach for angel investment?

For me, it is essentially the founder and the founding team. As we are in a position to see many fintech ideas implemented in our platform, we can relate to that business idea. So we have a vantage point of view of what will work and what will not work, so that's the second element. Can it become large? Or will it be acquired by someone looking for an adjacent opportunity. Lastly, how much of you believe in that particular idea.