• Meet Mahavir Pratap Sharma, a serial entrepreneur, mentor, angel investor and co-founder at Rajasthan Angel Innovators Network (RAIN).
• After graduating in the mid-80s, he went to the US to further his family carpet business started by his mother.
• Unfortunately, his mother passed away suddenly and since she was the pillar of the business, Mahavir’s brother wanted him back. So he returned home for good in the mid-'90s.
• While expanding his family business, he joined TiE in the early 2000s. Here he learnt about start-ups and angel investing, thereby gaining a deeper understanding of the ecosystem and growing his passion for start-ups.
• As part of the Startup and Angel Investor Series, we spoke to Mahavir to understand how he developed from a carpet selling business to angel investing in 17+ start-ups.

How did you discover your passion for entrepreneurship?

My mother was a first-generation entrepreneur who ran her own carpets business. For obvious reasons, I joined her business while I was still in college.

My father was in a government job. He retired while I was in college and was trying to dabble into my mother’s business while so was I. We both did not get along with each other and there was no way that I could be in India and still be part of the business.

Hence I grabbed an opportunity to go to the US with the intention to learn and grow there. I continued to import & wholesale carpets from India and other countries.

Unfortunately, my mother passed away suddenly and since she was the pillar of the business my brother wanted me back. I returned home for good in the mid-'90s.

In the midst of challenges, I saw an opportunity. With my connections and knowledge of the US wholesale business, I created a whole new way to do the carpet business from India.

Over the years, I expanded the carpets business, added jewelry, marketing, branding, events, etc. So, various verticals came up because of pivoting and evolution.

My never-give-up attitude and desire to evolve helped me in my journey.

How and when were you introduced to start-ups, and why did you decide to be an angel investor?

TiE came to India in the early 2000s when entrepreneurship was not a buzzword yet. As I was part of the business community in Jaipur, I was asked to join it.

In the first 5-6 years of joining TiE, I was not active in start-ups or investments. However, when I became the President of TiE Rajasthan, it proved to be another turning point in my life.

During my presidency in the years 2008 & 09, we were lucky to host the TiE Global retreat in Jaipur. It was here that I interacted with various global leaders and successful investors where much of their success was due to technology.

I realised that no business would survive without it.

So, I dived deeper and got more involved with TiE globally as part of the Global Board of trustees leading several committees and subcommittees.

It gave me first-hand experience of the startup world and I wanted to be a part of it…and I knew the only way to enter the start-up world was by investing my own money.

In 2013-2014, after closely watching the success of other angel networks and my desire to become an angel investor, we launched RAIN, an angel network. 

RAIN was founded on the premise to support young entrepreneurs in Jaipur by funding them with small amounts between INR 10-20 lakhs each (approx 20-25k USD). This started to improve the startup ecosystem in Rajasthan and today when I look back, I think we have succeeded as Jaipur is on the map for Startups and Technology.

We started small but grew to 17 start-up investments in the last eight years and I continued to invest in my individual capacity too.

It has been a great journey.

How do you balance your family business along with the various start-up investments?

After my mother’s passing, my brother and I were both running the business. He was the designer and I was the marketer. Sadly, I lost my brother also, an early death.

Because I could not do everything on my own, I delegated my senior team members and gave them a share in profit or equity, and thereby making them partners, so I could focus on other parts of the business.

It was challenging but I became a better entrepreneur and a stronger person. So, challenges are a part of everyone’s life and it all comes down to how you deal with them and how you evolve after that.

Today, I think I am more of a techie than a regular businessman. 

With so many start-ups seeking investors, what factors do you consider before investing, taking the high risk of angel investing into account?

The problem, solution, the idea, the market fit all these checkmarks are required, but what is very important is the team. We assess the team’s ability to deliver as well as their strength, knowledge, versatility, and tenacity. Lastly, we analyze the numbers, valuations, and cash flows. These convince me to invest.

I must mention that I follow my gut as well, but in certain times, it is not just my intuition but my desire to learn new technologies or domains which encourages me to invest in a particular startup.

Like right now, I am keen to know about blockchain and NFTs. I am watching out for founders who are building products in this domain!

From your experience, what are the biggest mistakes you see start-up founders make?

I think everyone has their share of challenges and mistakes. These are the broad and generic mistakes that I think people make.

1. Not having a cohesive team. I have seen great people not being able to work together and that is because they do not decide on sectors and verticals within the company that each co-founder will have to handle.
2. Not letting go of people and money. Sometimes founders fall in love with their own ideas/team and focus on the inside and refuse to pivot.
3. Only looking at the direct competition. There are many indirect competitors that will continue to get into commerce, social media, technology, AI, machine learning, Blockchain, etc. Startups at times tend to ignore all these indirect competitors such as Googles, Amazons & other biggies and do not realise that they have to move fast to become start-ups to reckon with.

How as an angel investor do you deal with wrong investment decisions? 

One thing is for sure that strong people and good entrepreneurs do not regret it. That is why I do not regret wrong decisions or let them bother me.

But to answer your question, yes I have committed several mistakes in my life but as I said, the wrongs do not deter me.

Whatever I have done, I do it based upon today, my present knowledge and circumstances, gut feeling or intellect combined, which is fine and despite mistakes, I would still do the same. Yes, one grows, evolves, and learns from their mistake, but I continue to live with that and I enjoy it and move forward. It is part of growing up and learning.

Having said this, it does bother me, when my assessment of a team/people is wrong, which is not very often.

Investing is investing, with its mistakes, and one learns from them.

A lot of Finance professionals are now open to angel investing. What would you tell these first-time angel investors?

I think when you come from a CFO or finance background therefore an audit background suddenly numbers become larger than anything else. It has been proven that startups are not about the bottom or top lines or just numbers.

Consider more than just numbers when you assess a start-up’s viability.

Furthermore, join angel investing groups and not invest individually. The group will have a numbers person, a finance person, an entrepreneur, and a techie. More brains are better than one.

Any startup business ideas for finance professionals such as CAs?

I think fintech is a huge field. India’s penetration into the fintech world at the rural level or tier 3/4 level is minimalistic.

With the Indian stack of the UID as well as the Aadhar card, the government’s policies on various unemployment or the NREGA, and their collaboration, I think there is huge potential at the bottom of the pyramid in fintech. I think CAs and financial professionals are well equipped to do that because they can crack the code.

I would also like to mention that for any Tech Startup, we need technology but if I were to split the whole ambit in what spheres would make a good team I would put - technology at 40%, marketing, branding, and sales at 30%. 20% in finance and 10% in HR and operations.

So technology is the biggest, but it is a combination where technology is one component along with other components that make the company thrive.

They should also become team players, and help with fundraising, negotiations, backward and forward integration, and small acquisitions.

Lastly, what should start-ups consider when seeking angel investors?

1. You do not want just the money at this point. Instead, you want money and an investor that would bring a lot more on the table so you need to have a strategic investor. He or she should understand your domain, be connected to the network for your market outreach, be able to help you in raising the funding. It has to be a combination of all these things.
2. Investors need to align with your goals and roadmap. So you really have to see that this is the right match for your startup.
3. The analogy that I want every start-up to think of when looking for your first angel investor is like looking for a parent. When looking for a  co-founder or founding team is like looking for your siblings. It is a critical piece because bad angel investments or bad money would make it difficult to survive in the long run. In terms of the short term, you might get lucky but in the long term not so much.