Anup Kuruvilla has 30 years of experience in arranging debt for corporate clients across emerging Asian markets. He has been based in Mumbai, Singapore, Hong Kong and Jakarta, working with Citibank, Chase Manhattan and ABN Amro / RBS. His last assignment was as the Managing Director and head of RBS’s Loan Syndication activities in Hong Kong.
How does crowd-funding for start-ups work and what is unique about the 1Crowd model?
Crowd funding as a concept started gaining traction from the United States when a Boston musician and computer programmer launched AristShare in 2003. Crowd funding has since evolved into funding for creative projects, non-profit campaigns, and other social causes. Today, crowd funding is seen as another platform to encourage and promote entrepreneurship. Ours is an equity-based crowd funding platform where a pool of investors looks for investment opportunities into a host of promising Indian startups. What makes us unique is our state-of-the-art ecosystem, created around the core business of fundraising for start-ups and early stage ventures. We, at 1Crowd, go a step beyond connecting startups with investors. We co-invest in start-ups and early stage ventures that raise capital through us. We provide extensive support before, during and after fundraising for both investors and start-ups.
How does one become a member of the 1Crowd network of co-investors? Is there any eligibility criteria?
Registration on 1Crowd is an easy process where an investor provides basic information along with the standard KYC documents. Yes, we do have eligibility criteria, in accordance with the discussion paper on crowd funding circulated by SEBI.
What is the minimum and maximum investment that a member can make?
The minimum ticket size for an investor in a particular investment opportunity is Rs. 5 lakh, but there is no maximum limit.
Are co-investors expected to get involved in monitoring the performance of a business they have invested in?
No, co-investors don’t get involved in the subsequent monitoring; that responsibility is undertaken by 1Crowd. Once the funding round is closed, 1Crowd acts as the bridge between investors and investee companies. The company updates their progress on the platform through presentations, financial models, videos, etc. We are also introducing a feature where the investee company will have a webinar with the investors at intervals to apprise them on the progress and the way ahead.
What happens if one co-investor is not happy with the performance of a business and wishes to exit, while others don’t?
1Crowd Investors sign a common Shareholders’ Agreement (SHA) whereby they irrevocably authorise 1Crowd to present them in all matters, including shareholder meetings and potential exit opportunities. In the unlikely event that an investor subsequently wishes to renege on the agreement, he can theoretically do so but in reality, there will be a buyer only if there is a block sale and so, to a large extent, it is only a theoretical possibility.
Are there any specific sectors or kinds of businesses that 1Crowd is focused on?
We at 1Crowd are sector-agnostic and do not restrict ourselves from investing in any sector. As along as the company falls within our investment framework, we are happy to invest and take the company on board. Scalability is critical. Generally, the startups we raise equity for are capital-light and use technology to reach out to clients.
What have returns on investments been by crowd funding platforms overseas?
Typically, a 20-30 per cent on a portfolio basis is considered as an adequate return for the asset class. Difficult to predict, but generally if the startup is doing well, it should be able to raise institutional funding in 18-24 months. Angel investors such as ourselves are generally taken out in these rounds; maybe not Series A but likely by Series B or thereafter. So, the likely timeframe for an exit is two-three years from initial funding, if all goes well.
What rate of return does 1Crowd target and over what period?
Same as above.
Who does one need to reach out to at 1Crowd to join the network?
Ours is an open platform and anybody who fulfils the eligibility criteria can join by registering on our website. Additionally, you can reach out to Haripriya Rajan (haripriya.rajan@1crowd.co) from our team who can guide you with additional information.
Are there other ways for individuals to participate in 1Crowd besides through investment?
Yes, we provide startups with access to a pool of mentors, other partners, and leading service providers to help boost their businesses. Accomplished individuals can participate in these initiatives.
What investments has 1Crowd made so far and what are the expectations from these ventures?
We are a relatively new platform; having been operational for a little over six months. We have completed four transactions; have two on the platform, and a healthy pipeline. Typical transaction sizes have so far been Rs. 1.5 crore to Rs. 2 crore.
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