In the latter part of 2017, LetsVenture started engaging with early stage VCs (looking to invest USD 100K - 3Mn). Via our regular engagement with them, today we have unlocked a capital of USD 500Mn+ through these funds.
In 2010, when the startup ecosystem in India was prepping up for transformation, there were only a handful of Venture Capitalists to support the Indian startups. And the list of VCs looking at early stage startups at that time was even smaller.
Fast forward to 2016 - we saw an emergence of many micro-funds interested in the early stage market, willing to put in check sizes as low as USD 100K. We saw this trend early on and started working with these funds in 2017. Today at LetsVenture, we have 150+ funds on-boarded, and regularly engage with 90+ funds, from India, Singapore, US, Japan, and Hong Kong. With this engagement, more than USD 500Mn worth capital has been unlocked via micro-funds and is being deployed in early-stage startups.
2018 was a pilot year for this engagement model and more than USD 2Mn was invested in LetsVenture deals through these funds.
Why is it important for LetsVenture?
LetsVenture has been enabling early stage investments for the last 5 years and has helped 170+ startups raise funds on the platform. This portfolio is maturing with time and many of these companies are in the phase of having raised or raising Pre-Series A and Series A rounds. Our engagement with micro-funds not only helps us support early-stage startups at the seed stage, but is also relevant to our existing portfolio.
The process of fundraising became a lot easier as well as efficient for us with LetsVenture's curated connects. We got connected with WEH Ventures and Sprout Ventures, both of whom have the expertise as well as the vision for our space. It's a known thing in the Startup community that it takes a lot of time in reaching out to investors, in establishing connects and finding out their initial interest in the given space. The curation was helpful that way, It definitely optimized our time.
Prashant, co-founder of Trell. Trell raised an angel round via LetsVenture in 2016 and then raised a USD 1.2Mn institutional round in 2018, again via LV.
Who are the micro-funds? How do they operate?
To define what we mean by a micro-fund - An investing entity which has raised USD 5Mn - 50Mn capital, with their primary investing focus targeted towards Seed - Series A startups.
The micro-fund investment methodology is very structured in approach. They have a pre-defined thesis, in most cases derived from the expertise of the partners in these funds. With a team of analysts, they perform their own due diligence on their investment and then take a decision. Typically they also take a board seat, and could have the thesis of either leading deals, or participating in a syndicate with other leads. While funds receive curated deal flow, they also refer their deals for syndication on the platform. We believe our fund engagement has created a good playbook for validation for angel investors too. Some funds allocate follow-up capital which is beneficial for the startup founder.
What is our approach going forward?
At LetsVenture we aspire to become the ecosystem were a founder can find an angel investor, a micro-fund, a VC, a corporate venture arm as an investor. The process of fund raise made efficient and easy. We will continue to be market enablers rather than market participants for early stage investing in India.
If you want to talk to us about Micro Funds, reach out to us at:
Apurva Chawla: apurva.chawla@letsventure.com
Ravish Ratnam: ravish.ratnam@letsventure.com
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