Yesterday I was at the AngelPad demo day, invited by my friend Thomas. 12 companies presented their products & traction in a breezy 3 to 3.5 minutes per startup. Overall, super high quality of presentations and a great set of companies.
Some initial impressions.
1. Each had 12-15 slides, crisp transitions and a really good flow to their presentations. Most 90%+ teams were 2 founders, but only 1 person presented when another was standing at the front with the co founder.
2. No live demos, and the pitches had a consistent flow to them. A one sentence “what we do”, a good description of the problem and some market stats, sizing. Some even had screen shots of their product.
3. It was a packed house and I had a chance to meet (and reconnect with) over 60+ investors. Most of the investors were impressed with the presentations and also with some of the ideas themselves.
I also had a chance to meet with 9 of the 12 founders. They had really excellent follow-through and I got 7 emails this morning to schedule time for follow ups to discuss their fundraising.
I also got to ask them what they really liked about the program, the schedule and the help Angelpad provided.
Many stated Thomas’s personal involvement and his passion to help companies first. They were so happy to have his time and guidance, that they had felt privileged to have him as their mentor.
A few of them mentioned the location and some of the other mentors as the second best thing in the program, followed by the group of other startups that were in the same batch as them. They felt they were truly motivated by the other teams and a sense of camaraderie was obvious.
As part of the Microsoft accelerator we have reached out to 28 accelerators in India over the last few weeks to get everyone together for a day of best practices and sharing. The event itself is a closed door, 1 day session at Bangalore, and over 20 of them have committed to being here. Our intention was to understand how other accelerators viewed success so we can help figure out our engagement with them and startups overall.
We get many questions about our accelerator and the top one is why we don’t give startups money.
In speaking to entrepreneurs, investors and other accelerators in the US, the TOP item they felt startups need is mentorship and advice to get many things right.
In my small sample of Angelpad startups they seeme to value the same thing.
In India, most (not all) startups only value money. Its a small amount really, ($10 – $25K), but somehow that small amount seems to indicate a sense of “skin in the game”.
I can totally understand that, but for an accelerator such as ours, that small amount does not really make us committed to the startups any more than without the money.
Second, the angel networks and investors in our mentor program don’t like the fact that Microsoft puts money in at the early stage, which creates a perverse incentive for us to “get a return from our investment”.
Third it creates an issue for other strategic investors (such as Qualcomm, which has looked at one of our companies for an investment) and venture investors, who prefer clean capitalization tables.
Unlike other accelerators which are not a corporate program, the key value to Microsoft from our program is startup engagement. We take pride in engaging with the startups and are extremely happy if they are successful, but the financial return from our investment is going to be largely negligible to us. Even if 1 of the 11 startups “makes it big” and we owned 6-10% of the company when it went IPO or got acquired, it would not be a significant dent to Microsoft by any means.
I understand why most Indian startups don’t value mentorship, the space, free food, customer traction, marketing planning, PR with blogs & press, full time design help and credits on technology platform.
I have learned from Angelpad that our primary motivation should be to ensure the next batch of companies value those things more than an investment of $10K to $20K.
I understand the bar is much higher to provide mentorship to the same level as Thomas, but that’s the goal we are aiming for.