It all started in 2014 when Abhishek Agarwal, then 29, was running a research firm called Fortune Interfinance. Tracking stocks and the market as a research analyst for eight years, he wondered what the next step was. The money was good, but Abhishek realised he wasn’t changing things, or adding value in any way.
“I was a regular on business media channels as a stock market expert, and I soon realised that all that media exposure was making me lose focus on what else I could be. It was not helping my business grow,” Abhishek says.
Having graduated in commerce from Mumbai, Abhishek studied finance at Lancaster University in the UK and returned in 2007 to start work in a stock broking firm. A few years later, he began his research firm.
Investing in startups
Abhishek’s investing dream began when he started reading about startups in 2014 and saw the rise of Flipkart and Snapdeal. He saw startups as a great asset class to spend in, provided he could bet on the idea and the entrepreneur. Abhishek then borrowed Rs 2 crore from his father to finance.
Next step? He went to the Indian Angel Network and sought to join the network. “Most of the VC world is built on connections and networks. Here I was, a stock market investor, walking up and asking to be a member of an angel network. They rightly took six months to verify my investing aspirations,” Abhishek says.
Soon after, Abhishek began to invest his money in equities. His first investment was Rs 10 lakh in Kwench Library Solutions; he is still invested in the company. Other companies that he spent in include Truckola, Insense, Loginext, Wellness Forever, 6Degrees, Wishberry, Growfitter and Insense.
Each of these companies is in the growth stage, and valuation details were not disclosed as he is one of several investors in the company.
By 2017, he had invested Rs 3.25 crore in 24 startups, with cheque sizes ranging from Rs 10 lakh to Rs 30 lakh.
“Fifty per cent of my startups have increased my returns; the rest will go under. Paytm has also acquired one of them, and it increased my returns 10x. But, I got paid in stock,” he says. He continues to be a shareholder of that company, which is run as a subsidiary, and is not a shareholder of Paytm.
Patience is key
Speaking on how he made his investments, Abhishek says: “When I invest, I look at India’s growth in consumption, PPP, and the fact that technology can solve B2B and B2C startups. I believe that just like equities and bonds, one can also invest in startups because in the end it’s a risk. Only, in the startup’s case, you need to be ready to lose money because a lot of things can go wrong. But when it works, you can make a lot more money. I believe in a balance between stockbroking and startup investing.”
He adds that being part of the angel network, returns would be small and that one needs to be patient to make big money. “An angel is successful if the investments get you a 100x return,” he says.