By Aashiq Hussain Andrabi
INSIDE his Jawahar Nagar office, Shabir Handoo is finally living his dream. The ex-banker whose media proficiency and income-tax vocation made him insightful about the fraught startup landscape of the valley is now running a promising network of angels—unlike the televised sharks—boosting the brainchild of many Kashmiri self-starters.
Handoo is a suave man, whose work-in-progress—a study on the role of Alternate Financial solutions in augmenting financial inclusion in J&K—is about to shape up as a telling treatise.
Before wearing the hat of an executive dealing with ideas, the Srinagarite studied Media, Interest-free Banking & Insurance and Mid-Career professional courses in Direct taxes and allied laws.
Back in the tumultuous 1990, he worked in the J&K Bank for over a year, before joining Income Tax Department till the year 2021, when as Assistant Commissioner of Income Tax he voluntarily opted out of the Government service to explore opportunities beyond his comfort zone.
“The few skillsets that I acquired over the period of time come handy while dealing with modern professional challenges,” he says. “My core area interests are in the fields of Alternate Finance, regulatory compliances and business planning.”
As an Associate Fellow with the London-based Institute of Interest-free Banking & Insurance, Handoo terms Kashmir Angel Network or KAN a cohort of highly experienced members who have excelled in their own domains.
“That is the edge which provides unique insights and access to resources for startups and also helps us to identify the startup that others may overlook,” he says.
“We are getting a huge response from all over the valley, wherein every query and comment encourages us to work harder and support them in every little way we can. We have been quite successful in a short period of time in creating a buzz around entrepreneurship and raising expectations of youth who hitherto thought of entrepreneurship as a leftover choice if other career options exhausted.”
KAN provides funding, mentorship, and networking opportunities to early-stage companies, helping these startups grow and develop into successful businesses and creating job opportunities and driving economic growth in the region.
In a detailed discourse with Kashmir Observer, CEO KAN talks about startups, self-starters, stimulus and sponsors in context with the valley.
Let’s begin with the cliché: What inspired you to launch Kashmir Angel Network?
As a co-founder and chairman of Kashmir Angel Network, I always try to learn something of everything. And therefore, after my educational pursuits and professional services, I could identify potential business gaps across various sectors of local economy. It was also visible that remarkable business ideas could not take off for want of professional mentorship, critical business strategy and financial planning, requisite financial assistance and dependable support in regulatory compliances.
So, a group of friends, who are experts in their own domains, and having similar experiences joined in. This joint venture led to the birth of Kashmir Angel Network (KAN).
Can you give us an in-depth overview of the comprehensive range of services and support offered to entrepreneurs and startups by KAN?
Though the main focus of KAN is to provide Investment and Funding support to Startups, however, in order for Startups to succeed, we provide support in a range of areas, including, regulatory compliances, registrations support and advisory, business strategy and financial planning, valuation Services, financial and legal structuring, support through mentoring as well as in technology development. KAN consulting services help with these areas and provide handholding to early-stage startups.
With so many startups vying for attention, how do you make the critical decision of which ones to invest in and provide mentorship to?
In line with its mission KAN is primarily committed to support aspiring entrepreneurs and early-stage startups turn their business ideas into reality. It also supports validated startups to scale up their business. Moreover, KAN is sector agnostic, thus opening up doors for every disruptive business idea. However, it doesn’t mean that each and every startup qualifies to be onboarded without going through the process of due diligence. The standard process that is applied for filtration looks for disruptive ideas which are technology driven, properly researched through TAM, SAM and SOM analysis. Other factors like scope for scalability, properly researched USPs, business strategy and financial model; how much clarity and passion the team members carry are key areas which are considered before onboarding a startup. Moreover, we have to discount red flags, if any, present in the aspiring startups.
What sets your approach to startup selection apart from others in the market?
Frankly speaking, we are the only ones in the private sector in J&K for the time being. But that doesn’t make our job any easy. It in fact is a challenge. While we indulge in the core business activities, our engagement also extends to building an enabling ecosystem around the growth of startups, creating awareness towards modernised entrepreneurship and digitization. Nevertheless, our approach is thoroughly professional in following the due process as per industry norms. We conduct research from our side regarding the sector of economy that the relevant startup relates to, call for the meet up with founders, evaluate the team and their pitchdeck, check the business model and the financial streams, conduct due diligence and review their business plan and take a call ahead. May I point out that the KAN represents a network of highly experienced members who have excelled in their own domains. That is the edge which provides unique insights and access to resources for startups and also helps us to identify the startup that others may overlook.
Inclusivity and diversity are critical in any industry. Can you highlight the importance of these values in your network’s investment decisions and initiatives to promote the growth of underrepresented entrepreneurs?
Inclusivity and diversity are critical for any industry to thrive and grow. In fact, it fosters innovation, productivity and profitability. In the context of startups, we understand that underrepresented entrepreneurs face significant hurdles to entry, such as lack of access to capital, mentorship, and networks. With this realisation, our initiatives primarily focus on handholding, imparting knowledge and making entrepreneurs aware of the opportunities and challenges in the market. We value the business idea, passion and vision of the team, and their commitment to the idea for us to team up with them. In this pursuit we have started a series of discussions at KAN, by the name KANversations, aimed at providing education, mentorship, and networking opportunities. Recently, we have tied up with Wadhwani Foundation, Bangalore, an important entity working for fostering startup ecosystem, to provide the entrepreneurs based in Kashmir a platform to scale up their ideas. Both these programmes are fully sponsored in order that the goal of inclusivity can be achieved.
What steps do you take to evaluate the potential of a prospective investor, and what key criteria do they need to meet in order to be accepted into the network?
An investor can get onboarded by registering on our website. There is a process in place for enrolment of an investor whose aspirations and ideas meet with ours. The investors are charged a nominal enrolment fee. Any investor who can invest annually with a minimum ticket size of Rs. two lakhs, and can be substantiated through his/her income tax return statements can become a member by submitting his KYC details along with requisite forms.
Let’s dive a little deeper into the benefits that angel investors can expect when they join your network.
Angel investors can trust the due diligence made by an investor committee of KAN before they are given opportunity to invest in a particular startup. This process benefits the investors as their risk gets minimised. Members are provided a comprehensive pre and post investment support documentation, monitoring and portfolio management services. The investors get opportunity to invest in the best scalable startups which are shortlisted through a process-driven approach.
KAN also helps create opportunity to interact with other angel investors and meet individuals experienced in working with young companies. Members also have access to in-depth reviews, video recordings, and legal and financial due- diligence reports of shortlisted companies. We understand that the startup ecosystem is an ever-changing reality which demands updating of knowledge and timely access to opportunities. Through various efforts, we indulge in active learning, investing and networking opportunities for our members.
How has your initiative made a difference in the entrepreneurship and startup ecosystem of the valley?
We are getting a huge response from all over the valley, wherein every query and comment encourages us to work harder and support them in every little way we can. We have been quite successful in a short period of time in creating a buzz around entrepreneurship and raising expectations of youth who hitherto thought of entrepreneurship as a leftover choice if other career options exhausted. But now many people see it as promising as a career like any other. By providing funding, mentorship, and networking opportunities to early-stage companies, help these startups grow and develop into successful businesses, creating job opportunities and driving economic growth in the region.
Measuring success is crucial in any business. Can you share with us the key metrics you use to evaluate the success of your investments?
If you are referring to the commercial returns for investments, then it is too early to delve into quantification in the initial period of investments. You know that angel investments are prone to risk as against debt finance from a bank or an institution. There are no guaranteed returns in equity-based investment that includes early-stage seed investments. However, the key performance indicators are definitely identifiable pointing towards success of an investment. It all depends upon the inherent scalable potential of the relevant startup which in turn depends upon its USP, sales strategy and success of the pilot launch/ MVP. Having accepted high risk, Angel investors usually expect their investments to grow a minimum of 3x to 5x if the startup lives upto its promise.
Would you mind sharing some inspiring success stories of startups that have thrived under your guidance and investment program?
Some really promising startups with disruptive and high potential of growth are onboarded with KAN which have been groomed and made investment ready. They have reached tipping point in their growth after intervention by KAN. Their mentorship sessions are being conducted by domain experts some of whom are sitting across the country. Investments in these startups are already happening. However, Non-disclosure clauses in our incubation agreements do not allow me to disclose the name of these startups.
Balancing the needs of startups in your portfolio with the expectations of investors can be a challenge, can you discuss how you navigate that balance and what it takes to be successful in that role?
It is indeed a challenging task to balance between the needs of startups and expectations of investors. But when you have a clear communication and transparency with both the parties involved; when expectations are set as such that both the parties understand the risks and the rewards of the investment, coupled with understanding of the startups SWOT, and maintaining regular communication are some important steps to maintain the balance between the needs of startups and expectations of investors.
For aspiring entrepreneurs seeking funding and support for their businesses, what advice do you have for them in terms of what they should look for in an investment network and how to prepare for that process?
This question is pertinent as it relates to the mission of KAN. The startups are in need of money and would normally accept wherever it comes from. But the angels that they look for should be experienced and transparent in declaring their investment goals. Startups must know in advance the terms of investment including the share of control that the angels are looking for and the return on investment that they expect. With this knowledge in possession, a startup could breathe easy while dealing with a potential angel investor network.
Our basic endeavour is to make the startups investment ready. Therefore, we would like that the aspiring startups should prepare a competitive and comprehensive pitch deck that clearly explains their business idea, the problem or the business gap they have identified, its solution in quantified terms, market opportunity, and clear projections of their growth. They should be mindful of their business and financial model. It is important for the team to be receptive, open to suggestions, willing to learn and build relationships. We would like them to be actively involved in building their network. They must attend events like KANversations that are being organized for this purpose. It will help them to get an insight into the procedure and workings of the ecosystem and the culture.
They need to be sure of the funds they seek and should be ready with a satisfactory explanation about the purpose for which the funds are sought. Lastly, their proposal should be backed with projections.
How do you plan to continue to grow and make an impact on the entrepreneurship and startup industry in your region?
KAN is backed by passionately driven professionals working across the globe in various leadership roles. Our mission is to be recognized as the trusted and resourceful angel investment network locally and nationally. So as to say, our goal is to expand our network of investors sitting over transnational boundaries, and reaching out to new geographies, create new programs (like the one we have tied up with Wadhwani Foundation) or better resources to cater to the needs of startups.
We would like to create the first private sector incubation centre in the Valley as also to create an angel investment fund in the near future to improve the quality and reach of our operations and make it easy to cater to the funding needs of the startups in J&K.
Can you walk us through the process of helping startups achieve scale and value for their ventures?
Angel networking is a tedious job but not when driven by passion and a team of likeminded domain experts who invest their time, energies, and expertise. When the team is driven by an urge to help startups in their journey to success, there is no looking back. Thankfully, this is our story so far.
We believe that the startups need to have a solid foundation which includes a clear vision and a properly researched business plan to achieve long term success; to better understand their target market and their competition to achieve their goals. They need resources which they have no access to. This access and support is being provided by the Angel network. We help them to refine and execute their business strategy, connect startups with investors, help them track key performance indicators (KPIs) and assess their progress over time. It is very crucial to measure progress to find the gaps and shortcomings if any and fix them in real time. When this process moves as per the laid down plans, startups can achieve promised scale for their ventures.
Challenges are inevitable, but they can also be opportunities for growth. Can you share any challenges you faced as the founder of an angel investor network and how you rose above them?
Angel network as a concept was hard to sell. The name resonates with one broker company and it took a lot of effort to make this distinction visible. Actually, the idea of a private player creating a platform for startup ecosystem was totally alien in our geography. Lack of awareness, insufficient technical expertise and mentors was another major challenge. Thereafter aggregation of resources was another. However, we got over these challenges by bringing together stakeholders working in different states as also as a result of relentless reach out.
What do you see as the future of angel investing in Jammu and Kashmir, and how is your network positioning itself to adapt and evolve with the changing landscape?
With every response that we get every day from the people of J&K and beyond the valley, be it on social media, or via calls, we feel that we have been successful thus far in creating our impact and influence on the business community and aspiring youth. Since angel investment is new to the Valley, a major challenge is to build trust around it by showcasing success stories in due course of time. This concept being new to the valley, people need to get awareness about its essence and its benefit. We are trying our best to reach out to most of the people/startups to help them. This will go a long way in fostering the entrepreneurship culture and help in creating jobs thereby adding vital value to the economy of scale. We see ourselves in the next five years as being recognised as pioneers of angel investing in Jammu & Kashmir.
Lastly, what advice do you have for entrepreneurs and investors?
‘Dare to dream’ and let the things around you conspire to turn your dream into reality. Dreamers are those who can plan to act. Therefore, smart planning, dedication, conviction and passion are the virtues that take you across the line. For entrepreneurs I would like to say KAN is and will be rooting for you always, we are here for you. You start working on the disruptive ideas, you dare to dream, we are here to help transform your dreams into reality; and to investors, I would like to inform that our youth has got enormous potential, what they require from you and us is support and handholding. Come forward and join this initiative for the symbiotic benefits.
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