Selecting the Right Venture Capital Firm for your Startup

Tandon VC 823x315

Selecting the Right Venture Capital Firm for your Startup

  November 26, 2019

When looking to raise funding, there are many factors you need to consider before choosing a venture capitalist partner. Many great startups have been thrown off course by choosing an investor for the money and not for the other assets they bring to the table. While capital is important, it’s only a small part of startup success. That being said, here’s a list of things you need to consider before choosing an investor (or group of investors):

  • Availability: Knowing how many companies a firm is currently invested in can give you a better idea of how much time they’re going to be able to devote to you and your business. Ask the venture capitalist directly how much time they anticipate devoting to your startup each month. You don’t want to get into a situation where you have either an overbearing investor or one who isn’t involved whatsoever in the operations of the company. Most startups need to find a “happy medium” where they get the advice they need but also have the freedom to operate the business in the same manner that brought them success up until now.
  • Connections: Most startups don’t raise capital just one time. Partnering with a venture capital firm that can introduce you to future funding options is something you want to think about from the outset. Look into their funding history and see what their past funding rounds have been like. How were they structured? Who did they bring on-board for additional capital? A semi-celebrity venture capitalist might have more overall connections but a lesser-known investor might have more relevant connections in your industry. A great question to ask while meeting with investors is, “who do you know that can help us grow this company faster?”
  • Cultural Fit: Do you have the same values, ethics, and morals as the venture capitalist you’re speaking with? If there’s a clash of fundamental beliefs between you and your funding partner(s) there will inevitably be larger problems down the road. Decisions can become extremely difficult when you put yourself in the shoes of your investor. There’s a tendency for all investors to be more shortsighted than company founders. Short-term focus on ROI can sometimes mean the death of a promising startup. If Facebook had started charging customers for access or started advertising sooner, we might not be talking about them as a global superpower like we do today.
  • Integrity: Over the last few weeks, there have been widespread stories about sexual harassment and gender inequality in the venture capitalist community. While it’s disheartening to see this kind of behavior, it’s also a part of human nature. There are always going to the unethical and untrustworthy people conducting business in the world. It’s important that you do background research about each individual that manages a venture capitalist firm. Do they have a history of unprofessional behavior? Taking the time to do this could save your startup from an embarrassing scandal or expensive legal trouble in the future.
  • Intelligence: Emotional intelligence is harder to quantify than other factors on this list but it’s just as important as the rest. You should do your best to find out how a particular venture capitalist firm handled emotional situations in the past. Whether it’s replacing executives, firing ineffective employees, or any other event that causes high tension, a venture capitalist’s ability to communicate and understand the situation is paramount. The most effective course of action for a startup is to talk with previous company founders and get their opinion on the firm’s emotional intelligence.
  • Knowledge: Almost all venture capital firms have their areas of expertise. Usually, it’s a certain industry or group of industries. For example, at Tandon Group we specialize in the EMS, IT, healthcare, defense, and consumer industries. We feel that we have the highest chance of success when we stick to our domain of expertise. Other VC firms might specialize in industries like fintech, cryptocurrency, or any other number of specialized industries. While knowledge of the industry is extremely important, it’s only the starting point for finding your ideal venture capital partner.
  • Location: It’s common practice for venture capital firms to set up funds that are specifically used for different geographical areas across the globe. Make sure you do your research to ensure you’re talking to someone who’s interested in investing where your startup is headquartered. This isn’t always a deal-breaker but many investors feel more comfortable when they invest in companies that operate where they’re familiar. As an example, the Tandon Group has offices in San Jose, California, and Mumbai, India. While we’re open to investment pitches from all across the globe, we put a special precedent on companies that are headquartered in either of our locations. It gives us the ability to provide guidance and work directly with company founders.
  • Performance: It’s a common saying that success breeds success. That being said, how much success has the venture capital firm you’re considering seen in the past? Some firms prefer a widespread approach, investing in many companies, hoping for a few big successes. Other venture capitalist companies take a more exclusive approach,  working hand-in-hand with each company they invest in. Either way, these firms are going to have past successes and failures. It’s in your best interest to know about them. At Tandon Group we’re proud to say we have a large portfolio of successful investments and one of the largest mergers and acquisition deals in Indian consumer internet history.

If you’re a startup founder looking for funding, the Tandon group is always open to hearing promising investment opportunities. If you work in any of our areas of expertise (mentioned at the beginning of this article) you can contact us to discuss potential investments. If you’re already apart of a successful startup and you’re looking to expand your business offerings to the Indian market we’re also interested in speaking with you. We have 40+ years of business expertise in the Indian market and are perhaps the best company to partner with if you’re looking to grow there.

Tandon GroupSelecting the Right Venture Capital Firm for your Startup

What to Look for in an Angel Investor

Tandon Capital 823x315 1

What to Look for in an Angel Investor

  August 1, 2015

There are important differences between an angel investor and a venture capitalist. For starters, the typical investment size for angels is smaller than that of a venture capitalist. In general, an angel will invest between $20,000 and $250,000 (of their own money) in exchange for a private equity position. VC’s pool together resources and invest on behalf of a “fund” in most cases. Venture capitalist (VC’s) don’t usually have a cap on the amount they’ll invest but they have a range they prefer.

Angel investors are more common for early-stage startups because these companies (usually) have less of a track record and are still validating their business idea. Angels like investing in early-stage startups because they get in “on the ground floor” and receive a higher equity position.

While the term “angel” might conjure up images of a business savior and someone who whisk companies on to success, the reality is most angel investments fail. Startup founders need to take certain things into consideration before bringing on an angel investor. Remember, this person will be with the company for the foreseeable future.

In this post we’ll look at the most important things you need to consider before taking on an angel:

High-Risk Tolerance

Perhaps the most important thing startup founders need to consider when looking at angel investors is their level of risk tolerance. Startups are inherently risky because it’s almost impossible to know whether or not a company will succeed. There can be indicators of success but only time will tell. Angel investors that don’t have high-risk tolerance can cause all sorts of problems for startup founders.  In general, you need to make sure your potential angel is in a position to lose their entire investment. While your goal is to make the company a huge success, you can’t risk having an angel investor breathing down your neck, asking when they’re going to get their money back.

Long-Time Perspective

If an angel investor expects to get their money back in 6 months or less, you need to take that as an indicator they’re not the right investor for you. Professional angel investors know that it can take multiple years before a startup provides a return on investment. Having a long-time perspective means that an angel investor’s willingness to wait years before even anticipating a return. Be upfront with any potential angels and let them know that you’re in this for the long-haul. It can even scare off potential angels if you tell them that you’re going to pay them back in an unrealistically short time frame.


One common theme seen in successful entrepreneurs is that they almost always have regrets about equity and control. While you have to be willing to give up some amount of control to raise capital, you also don’t want to give up too much control before you know where your company is heading. If an angel investor is overbearing on the amount of control they want, sometimes it’s best to simply pass on that angel.  Before ever going into any investment negotiations, make sure that your startup co-founders are clear on the amount of control you’re willing to give up.


A less quantifiable benefit to bringing on an angel investor is the professional connections they’re able to provide to an early-stage startup. Startup founders should reach out to angels who have specific industry connections in the field that their company operates in. An angel who has 10 years of experience in your field is far more valuable than an angel who has 30 years of experience in a completely unrelated field.  Do background research on any angels you’re speaking with and figure out who they know and how long they’ve known them. Tools like LinkedIn, Google, and good old-fashioned telephone calls are your best bet here.

If you’re a startup founder looking to find potential angel investors for your company, Tandon Group might be able to help. Tandon Group has invested in many startups over the last 30+ years and is always interested in meeting new startup founders (even if we don’t invest ourselves). We have one of the strongest networks of Indian and American entrepreneurs in the world. If you want to find out how we can help, reach out to us and let us know what you’re working on!

Tandon GroupWhat to Look for in an Angel Investor