http://www.businessknowhow.com/money/angelinvestors.

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8 Tips for Finding Angel Investors

by Arnie Koss

One of the most daunting aspects of starting a business is finding others who believe in
your dream---and can provide the capital and know-how to help you achieve it. Learn
insider tips on how to find angel investors from one of America's legendary start-up
successes, the cofounder of Earth's Best Baby Foods.

Angel investors do what ordinary mortals will not. They have the financial ability to give life to
your start-up. But they don’t show their wings to everyone. Angels have to want to be
discovered. As an entrepreneur, you have to learn how to find them.

The ideal angel investor will connect to the vision of your entrepreneurial idea. Of most
importance, the angel investor will want to feel a connection with you, the entrepreneur, and
share some of your moral and socio-cultural values and aspirations.

Angels like money; they’re not above it all. While angel investors tend to be relational and allied
with the entrepreneur’s vision, they are also attuned to the financial upside of investing.

When my twin brother Ron Koss and I started Earth’s Best Baby Food, the nation’s first organic
baby food company, we relied heavily on angel investors. In many instances, they were not easy
to find. But we persisted, and fortunately we met several who were attracted to our vision of
promoting organic agriculture and providing high-quality, healthy food for babies and toddlers.

We learned a lot about angel investors during the tumultuous start-up period that went on for
three years. Here are eight tips that might help you in finding angel investors for your venture:

1. Start with a brutally honest self assessment. This includes the merits and timeliness of your
idea; the substance and professional appearance of an introductory document such as an
executive summary or business plan; and an introspective look at your motivations, goals, and
commitment to the venture.

2. Determine what you are willing to risk. Many early-stage investors are comforted by
knowing that the entrepreneur has and/or will make a meaningful cash investment in their own
venture. Sweat equity, while appreciated, does not carry the same weight as cash in and assets
pledged. Angel investors have acutely sensitive antennae that can scan the entrepreneur for any
signs of reluctance or doubt.

3. Seek noncash investors too. The entrepreneur needs a variety of champions who
cumulatively lend credibility and energy to the ventures prospects. Champions share vital
networks, levy unpopular but necessary criticism, provide free or discounted professional
services (legal or accounting, e.g.), and stay the course in the darkest hour. Look for champions
who connect to the idea and to you.

4. Family members may not be the best angels. Early on, when the risks may be the greatest,
family connections may be where easy money is found. Not so fast. Easy may not be best,
because easy may dull your alertness to the fact that you have actually failed to deliver a product
that is compelling and that will attract others who do not share your DNA. Family may invest for
the wrong reasons (guilt) and that spells trouble for most business relationships.

5. Be resilient and flexible. Angels are attracted to resilience, which means that the sooner the
entrepreneur learns to deal with rejection constructively and learns from that rejection, the more
interesting they become to the many hidden observers who may be intrigued by the
entrepreneur’s idea, passion, and tenacity. Enduring, bouncing back, and becoming better may
earn the respect of an angel who could become “the one.”

6. Choose your angels with care. Don’t accept someone’s investment until you have confidence
you want them in your life. Do not ignore your intuition, because accepting an infusion of cash
from a total stranger is like accepting a blood transfusion from that stranger. Discretion and early
detection are vitally important. In your weakest moment, think strength and be strong.
Entrepreneurs must do their own due diligence and screening in the same way that a potential
angel investor must assess the merits of an investment.

7. Don’t surrender your power and authority to an angel. Individuals with money are just
that: individuals with money. The angel may be relatively fresh and untested in the particular
sphere of entrepreneurial initiative they are cannonballing into. They may be quite sophisticated
and wiser in other realms of investment and/or life. Having money does not make them smart,
competent, or sophisticated in the particular area of business you are entering.

8. Remember that angels are always out there. Even in the most challenging economic times,
there are always investors looking for opportunities. The entrepreneur’s challenge is to identify
new ways to network and to introduce their idea to as many people and groups as possible. The
expression “one thing leads to another” applies to the entrepreneur’s reality. Even though it may
be invisible, once your idea is being discussed by others, most of whom you don’t know,
unexpected possibility is in play and surprising and amazing things can happen.

As you look for angel investors, remember that there are also demon investors. They are greedy,
but typically hide their darkness very well. They may understand the entrepreneur’s vision, but
definitely not the entrepreneur. When the illusion falls away, demons are about themselves and
their insatiable appetites. Fortunately, most are averse to the earliest start-up risks, but they are
out there even in the seed money stage, so beware.

Arnie Koss is coauthor, with his brother Ron Koss, of The Earth's Best Story: A Bittersweet
Tale of Twin Brothers Who Sparked an Organic Revolution (Chelsea Green Publishing, March
2010), a lively business memoir that recounts the founding of America’s first nationally
distributed organic foods company.
http://techcircle.vccircle.com/2012/09/17/online-food-ordering-sites-mushrooming-is-the-
market-ripe-enough/

Online food ordering sites mushrooming; Is the market ripe enough?

September 17, 2012  | Sonam Gulati

Working late in office? Left without provisions at home? Can’t dine out because of foul weather
or because you don’t know the local joints? These are all the reasons why US-based GrubHub
came into existence as early as 2004 and is still doing a roaring business. And these may be
reason enough for a few Indian startups to make foray into this niche space –
listing neighbourhood restaurants and allowing prospective diners to order through their
websites.

Started in April 2012, Rocket Internet-funded FoodPanda is in a similar space. It features

location-specific listing of restaurants on its site where you can check out menus (along with
special offers) and place order. One can also search restaurants cuisine-wise or by other
parameters such as vegetarian, healthy food and so on. According to FoodPanda, convenience
and choice of food are the only value proposition it offers.

Akhilesh Bali, co-founder of FoodPanda said, “We have noticed some typical traits when it
comes to online food ordering. We see good spike on weekends and repeat orders from people
who have opted for the service once. Compared to other countries (besides India, FoodPanda
also caters to Singapore, Thailand, Malaysia, Indonesia, Vietnam, Taiwan and Colombia), the
Indian market is still at a very nascent stage. But as far as Gurgaon is concerned, it can be easily
compared to our market response in Singapore,” he added.

Globally, the model has worked, though. As mentioned earlier, US-based GrubHub started its
business in 2004 and it is now a key player there, along with another oldie SeamlessWeb, which
was launched back in 1999 and has traditionally focused on corporate catering. Another recent
player in the US market is ChowNow, which is betting more on social media and leveraging
Facebook for order placing. Moreover, innovative play is taking place globally where these
companies are betting big on mobile apps and social marketing.

In tune with the global trend, this niche Indian market has also witnessed some interesting
activity. For instance, UK-based JustEat, a global major, has entered the country by buying a
majority stake in Bangalore-based HungryZone.com. HungryZone was set up back in 2006 and it
was probably the first Indian firm entering this space. Currently, the company is clocking
double-digit growth month on month and catering to three key metros – Bangalore, Mumbai and
Delhi-NCR.

“The market has completely changed since we started,” said Ritesh Dwivedy, co-founder and
CEO of JustEat India. “At that time, e-commerce did not really exist per se. And even now, the
India market is definitely a few years behind the developed countries. In London, JustEat does
about a million orders a month and in smaller countries like Switzerland, it is about to break
even. Compare this with our best data, from Bangalore, which orders in four digits a day. The
market has to catch up but it is getting there,” he added.
Dwivedy also shared with us that at JustEat, service level agreements are signed with restaurant
owners and those include clauses like delivery time and customer friendliness to make sure that
all their merchants have certain uniformity in service. JustEat has signed up more than 2,500
restaurants and has an online payment system in place. In contrast, FoodPanda is yet to activate
e-payment tools on its India site.

Another player that we have caught up with is Mumbai-based Deliverychef. Started by Ankita
Tandon and Aditi Talreja in 2010, it currently operates in just two cities – Mumbai and Pune.
Deliverychef is bullish on corporate catering and has tied up with various organisations in these
cities. . The companies who have tied up with Deliverychef make it mandatory for employees to
order via the Deliverychef site when they are staying late and ordering food.

“We only sign up restaurants that accept online payment although our customers can pay both
online and offline,” said Aditi Talreja, co-founder and director of Deliverychef. And the USP of
the business? She again stressed on the convenience factor.

Some other players in the market are Delhi-based Foodera.com and BigBite.com, and Pune-
based Tastykhana.com.

The revenue channel common to all players is the commission charged on every order. In
addition, restaurants are also charged a listing fee by some of the players. But in order to scale up
the business, there have to be more revenue channels like their global counterparts –mobile apps
for ordering, social media marketing and the likes.

Interestingly, online restaurant discovery site Zomato has all of these features – a database, a
web platform, brand recognition and also the technology. So why doesn’t it enter online ordering
as well?

“Currently, this space doesn’t have volumes. We have some common clients (restaurants) who
tell us that they only get 4-5 orders a month from those online food ordering sites,” said
Deepinder Goyal, co-founder and CEO of Zomato. “Of course, we won’t say it’s a complete no-
no for us. But it doesn’t make sense to venture into this space right now. We may look at it in the
future,” he added.

Can they deliver?

The promoters of these businesses might sound optimistic as there is another aspect to this
business. Most of these sites list local joints or those offering special cuisines – eateries that may
be local celebrities but without an online presence. In such cases, it’s good business for both. For
example, a Noida-based restaurant called Salt and Pepper, a popular little joint in the area where
it operates, neither has a portal nor has the expertise to leverage the internet or the social media.
So when JustEat approached the eatery to list it on its site, Salt and Pepper readily agreed as it
would be incremental business at no extra cost. Although orders from JustEat are all too few
right now, there is no listing charge or additional costs and the restaurant would continue to be a
part of JustEat, the owner told Techcircle.in.
A McDonald’s or a Pizza Hut would not be eager to grab customers via third party sources
because they already have more-than-adequate online following and standalone e-business
models. But for small or upcoming eateries, such sites would definitely mean an additional
channel for revenue generation.

Investors, however, want to wait and watch for now. The current business model faces a lot of
challenge and the biggest one, according to well-known angel investor Vijay Shekhar Sharma of
One97 Communications, would be to make customers understand that the portal is just a service
aggregator and not actually responsible for food delivery.

“In a business like this, consumer delight depends on many other factors. Can you make it clear
to your customers that you are essentially a dispatcher? How does one make sure that the food
will arrive on time and as per SLAs? These are some of the crucial questions that will also decide
the scalability of these businesses,” he added.

Rahul Khanna of Canaan Partners echoed similar concerns. “The model has been there for some
time in other countries but in India, it is still in its early days. Online food ordering is an
interesting urban phenomenon, but we are yet to see how the business model proves itself,” he
said.

Whether Indian consumers are ready to order food online in a big way is yet to be seen.

(Edited by Sanghamitra Mandal)

Tags: Aditi Talreja, BigBite.com, canaan partners, Deliverychef, Foodera.com, JustEat India, rahul
khanna, Tastykhana.com.