Many suggestions and analysis on Groupon’s IPO filing. Interesting points, and I think they hit many of the key questions that any knowledgeable person reading the S1 should have. Lets look at it from 3 different perspectives a) potential investor b) customer and c) merchant.

I was speaking at a start-up event on Saturday when an entrepreneur came up after the event to talk to me about ‘how slowly investors move.’ He had been in discussions with three investors and although the time invested was about 40 hours, the elapsed time was close to four months. There was still no term sheet available. The investors had expressed an interest to participate but they were not ready to pull the trigger. In short, there’s no pressing need for the investors to move quickly was what I learnt from my discussion with him. The solution is to create a sense of urgency.

In sales, we often call this creating a ‘compelling event.’ When doing deals with customers, most sales professionals realise that customers have both time and money on their hands. So, customers move quickly if there is a trigger event by when a decision needs to be made. Here are some examples of driving a compelling event in sales.

a) Expiration of certain discounts which will not apply beyond a certain date. This may include promotional offers or freebies, which will no longer be available after that date.
b) Resource non-availability to implement the solution by a certain date, since other customers may sign up early.
c) Competitive advantage for the customer by a certain date. They may be the first to procure the solution and hence, gain the benefits earlier than their competitors.

The same strategies work well with investors as well. Keep in mind that the key emotional motivators of investors are greed, fear and herd instinct. Use these to level the playing field and help move your deal faster.
Using greed: If your true valuation, as expressed by recent competitive deals, is X, offer a 10-15 per cent discount on X as your valuation if the deal gets done quickly. Savvy investors know the ‘market value’ of companies and if they see a potential ‘steal’, they will move quickly.

Using fear: Creating competition among investors (make sure you really have competition for the deal, else it backfires on you) usually works well for both higher valuations and for moving quickly.

Using herd mentality: This is mostly not in your control, but you can leverage this as well. If e-commerce deals are the flavour of the month, most investors want ‘one of those’ in their portfolio. The other way to leverage this is to let investors know who the others are who have committed and when the train leaves the station (i.e. when you are closing the round).

Finally, thanks to my investor friends Rajesh Rai and Anuradha Ramachandran for helping me refine these thoughts.

We (my wife and I) have reviewed 57 start-up ideas by budding Indian entrepreneurs over the last six months who are looking for angel investment. While 35 per cent of them (the highest number) were related to education, 24 per cent were in services (marketing, IT, security) and 17 per cent were e-commerce ventures specific to India. The source of our deals was VCCircle events (11), NASSCOM regional meetings (9), Morpheus demo day (7) and the rest happened to be introductions from friends and other entrepreneurs. We ended up with five term sheets and two investments. The reason we invested in only two was a combination of our interests (we don’t like services companies, have little knowledge about the education vertical and so on) and valuation concerns.

Before that we were LP’s in Zodiac Ventures (USA) and another venture fund, which is now defunct.

However, here are some overall patterns and some pointers to entrepreneurs on how to obtain angel investment in India. These do not apply to all angel investors, though, but we think that these criteria are important.

Show The Short-Term Roadmap

We prefer to review 30/60/90-day business plans rather than five-year projections. Show us exactly how you are going to use the money to reach the milestone you have promised (whether it is shipping product, paying customer or hiring team).

Clarify Your USP
Think about what makes your business unique. Indian entrepreneurs spend very little time trying to be different. The theory I have heard multiple times is: The market is very large and I just have to fulfil the demand.

That you have a unique website name is not good enough differentiation. We reviewed four e-commerce companies that all showed the same – 100 transactions per day at the end of the year, 1,300 per day at the end of the third year and over 10,000 at the end of the fifth year. They were all different e-commerce companies – one is in the mom-baby space, another is in apparel and the third in in travel (hotels).

Will Angel Investors Help?
Ask if the angel investor would help syndicate your deal. Most companies we looked at were looking to raise between Rs 20 and Rs 40 lakh. We have no problem writing a quick (1-2 week) Rs 20 lakh cheque, but at Rs 40 lakh, the due diligence and legal processes become more arduous.

Get To Know Your Investors
It is mandatory before you take money from them. Much as you would like to get funded quickly, focus on execution and grow your business, it is important to get the right investors on board. Four companies that I know have suffered slow, painful growth because they have investors who were more interested in capital preservation and removing risk, rather than gunning for growth. I would recommend at least 3-4 meetings (most of these should last about 45 minutes) with your investors before you close the round.

This is more important in India than anywhere else, since investors tend to have multiple options for their money and most of these opportunities promise lucrative returns. But in case your investor has unrealistic return expectations, move on.

Follow up with personalised e-mail

We had three promising start-ups that we did not hear back from within the first week of meeting them. We did hear from them much later, but by that time, we had forgotten about them altogether. Sending a cut-and-paste generic e-mail cannot help one unless the communication is prompt and personalised.

Even if your e-mail follow-up boils down to 4-5 sentences with specific mention of the conversation with the investors, it is more valuable than a generic 4-5 paragraph message.

If you have been following cricket, there’s a new star in town: Paul Valthaty. After 2 tremendous innings with the Punjab Kings XI, his stock has risen several fold.

Read a very timely post from zillow on 6 common mistakes made by home sellers. There’s a particular piece that I found very interesting:

IAMAI along with IMRB just completed a Digital Commerce report for India. Some highlights:

The # 1 thing I like to tell most technical founders and entrepreneurs who want to learn how to sell is to “build strong relationships“. This usually leads to the question – “How do we do that?”.

In a large company, sales professionals, each have a quota to achieve each quarter (some monthly). The way their compensation is structured, nearly 60-70% of their total take home pay (On target earnings or OTE) is base and the rest is commission. For startups its usually 50% base and 50% commission if bootstrapped and 70% base, 30% commission if funded.