- Avelo Roy is an India-based Startup Mentor and Computer Engineer.
- Upon returning from the US to his birthplace Kolkata, he noticed a lack of proper guidance for aspiring start-up founders.
- This sparked his interest in establishing Kolkata Ventures, an international Startup incubator serving nearly 500 revenue-generating start-ups.
- As part of our Start-up and Angel Investors Series, we spoke to Avelo to understand how Kolkata Ventures changed the appearance of the start-up ecosystem in Kolkata.
What inspired you to establish Kolkata Ventures and how has it grown since its inception?
I grew up in Kolkata and did my engineering at the Illinois Institute of Technology, Chicago.
My whole focus to go to the US was to study less and focus more on entrepreneurship. In fact. the first year itself, we founded a startup that did pretty well.
Fast forward to 2016, I returned to Kolkata permanently.
The very same week as my return, one of the colleges in Kolkata invited me to be a guest judge in a business plan competition.
There I noticed how the bright young competitors had no clue about starting their own venture. They were asking for ₹10 – ₹15 crores with just an idea and a PowerPoint presentation because of their lack of guidance. The other judges questioned their ability.
Feeling bad for those poor lads I made it my biggest priority to bring a solution to the problem. That evening, I bought the domain kolkataventures.com in the hope of changing the start-up ecosystem in Kolkata.
I requested Neeraj Krishna, an IIT Kharagpur gold medalist graduate, and an MBA degree holder, to join me as a co-founder in building Kolkata Ventures.
Beyond networking, the students had no clue what to do so, we decided to train them in that area.
Initially, we offered our services free of charge but later started charging a reasonable fee (even today, our fees are very reasonable).
We groom start-ups until they are ready and then connect them to three investors, to whom they will pitch their ideas. If they do well, we connect them to more investors. We provide this service as a “make your start-up investor-ready” package.
Currently, we are serving nearly 500 revenue-generating start-ups, and have expanded to other places in East India as well as over five countries across the globe.
During the pandemic alone, we raised over ₹13.5 crores.
Over the years, has there been any development in Kolkata’s start-up ecosystem?
The entrepreneurial culture in Kolkata is not as prominent as it is in Bangalore, Gurgaon, or Mumbai. But we are rebuilding it and over the last four years, it has shifted considerably.
The young generation is enthusiastic. I have seen so many medical and, engineering students wanting to move in this direction and they do. But the parents right before their graduation would be like “Go get a job. You cannot take a risk, you have your sister’s marriage to take care of ” and they pull them back.
For example, a guy from a tier-2 city ran away from home, because his parents did not understand him and his goal to establish his own start-up. We then helped him achieve his goal. His father never made more than ₹10,000 per month, but he is making ₹4-5 lakhs per month now.
They are not unicorns, but they have valuable ideas, and they are making them a reality, that is what counts.
What are the common mistakes start-up founders make when raising funds?
The first mistake founders make is poor team formation. For a team to succeed, the founders should aim to have various professionals with a varied wealth of experience.
The second mistake founders make is going to the wrong investor. This is normally the case because founders are out of options. Please note that each investor has their own strengths and weaknesses. Assess these carefully.
The third mistake is self-centeredness. Founders tend to talk a lot about themselves and seldom think from an investor’s perspective.
Remember that investors anticipate returns and in their pitches, entrepreneurs need to incorporate how they will achieve this.
What are the general mistakes you have seen start-up founders make in their entire entrepreneurship journey?
The first mistake is to follow the investors blindly while trying to please them. This often leads to immature and irrevocable decisions, and only the founders take the blame once something goes wrong.
Remember that the investors do not know your business model as much as you do. Filter their advice and consciously decide whether to follow it or not.
The second mistake is overspending the investors’ money unnecessarily. All of a sudden, founders book business class tickets and lose the bootstrapping mentality. Keep in mind to spend their money wisely.
The third mistake founders make is to ignore themselves and their personal needs. This normally leads to fatigue, burnout, and consequently, poor decision-making.
Remember Maslow’s hierarchy of needs; take a break, spend time with loved ones, look after your health and connect with your spiritual side. You will thank yourself in the long run.
The fourth mistake is ceasing to network after receiving seed funding. This is mostly attributed to the feeling that the next round of pitching will be easier, so there is no need to network.
Conversely, the next round can be difficult, so do not get comfortable.
Do you think entrepreneurs must have co-founders? Are co-founders essential for the success of a business?
Honestly, it does not matter. For me, as long as one finds a team that is willing to dedicate themselves to the company, the company could thrive easily.
What the investor is assessing is whether you can execute. And the answer comes from the team that you have.
Most start-ups are tech-driven, so the start-up world is dominated by engineers. What advice would you give finance professionals who want to launch their own start-ups?
Do not limit your startup ideas only to finance. You can spread your wings and fly outside the fintech space. With a solid team, proper planning, and good guidance, your company will thrive.
My advice for finance professionals is to write down their top two skills as well as their top two passions. Passion will define the market.
After defining the market, go there to find a niche and a problem. Furthermore, assess the skills to see how they can solve the problems that exist in the market.
Thereafter, write a list of all the skills lacking and build a solid founding team (a team that possesses the skills you are lacking).
Lastly, what is your advice to first-time angel investors?
Firstly, I would advise first-time angel investors to assess risks properly to avoid falling prey to start-ups that eventually shut down with little to no returns.
Secondly, look at the 3 to 5-year prospect. Invest in start-ups that solve forward-looking problems such as 5G technology, virtual and augmented reality as well as cybercrime, to name a few.
Thirdly try to understand the founder and ask questions to test their ethics, energy, and skill level. Ethics is the most important part after skills.
Unethical founders are going to get rich at the expense of the company and you will also go down with the company. Unethical people with brains are dangerous.