In a candid chat with Franchise India, Ranjit Shastri talks about equity, his journey in India and abroad and the challenges faced.
Tell us something about yourself and your organisation.
I am a member of the Stern Fisher Angel Network. We get a number of applications from the food service industry for investment. We are here to learn about the opportunities in the industry. One thing that I have learned is that there may be a mismatch in the view of the investor and the entrepreneur. So, I am here to understand the mindset of the entrepreneurs.
Tell us something about the early stage equity raise for rapid growth.
The two common types of shares are common and preferred. Usually what an investor looks for are preferred shares. Angel networks believe in preferred shares because they have liquidity preference. First they get their money back and then the investor, so we prefer preferred shares.
We have a network and each member of the network invests a small amount of money and that is pooled and is invested in a project or a business.
Please explain about the anatomy of your organisation?
We at Stern Fisher Angel Network have a very simple structure. We are a group of CEOs and professionals in India, USA, Europe, Hong Kong and Singapore. Some of our members are ex-McKinsey consultants and successful entrepreneurs. All are brought together under an umbrella called the Stern Fisher Angel Network. We look at start-ups – companies that are small but aspire to become big. So, we are looking for companies that could have a long lasting impact on India.
Tell us something about your clients
We don’t have clients. We have members and our members invest directly into each company. We help our members invest directly in a company. Each transition is like syndication and there is a subset of members who invest in each deal. Similarly, the entrepreneurs are also not our clients. We call the companies we invest in portfolio companies. So we have members and portfolio companies.
What are your expansion plans?
The Stern Fisher Angel Network is an international channel for investment. There are around 300 angel networks in United States, while in India there are only three or four. We are very happy to be one of the leading angel networks in India.
We have tied up with CNBC TV 18 to run a programme called ‘Start-up India Challenge’ and in that over 400 companies have applied. This is a great opportunity for startups to show their capability. We like to do more of these programs in India every year.