Sharad believes faith is the cornerstone of any investment, especially for an angel. "We don't have the infrastructure to do complex due-diligence. The investor's goal is to see the value system of the entrepreneur and find the connection. How is he embedded in his or her network? If you know any of them, they can tell you a lot," says Sharad. For angel investors today, start-ups come with the learnings of failures as well as successes. Not to mention the sectorial choices for investment and geographical focus, which help in better understanding of the risk-reward play, than, say a decade ago.

Start-up funding has also seen first-time founders turn active angels, with an impressive portfolio of companies under their belt. For instance, according to data intelligence platform Tracxn, CRED founder Kunal Shah has invested in nearly 237 companies, including Zetwerk, Mensa Brands and Razorpay. Snapdeal co-founder Kunal Bahl has investments in nearly 187 firms such as Razorpay, Mamaearth, Ola and DealShare, among others. Anupam Mittal, founder of Shaadi.com, has invested in nearly 200 start-ups.

Raman Roy, ITES industry pioneer and chairman and MD of Quatrro, says entrepreneurs turning angel investors can also help mentor investee companies. Raman is a leading angel investor with investments in over 102 companies, including Uniphore. Founders of companies where he has invested do not hesitate to reach out to him on various issues. "Mentoring is very different from running your own company, it's a tricky business," adds Raman.

With instances of lapses in governance or information asymmetry between start-up founders and investors leading to skepticism, for those starting out as angel investors today, curating a deal, getting the right information, understanding and due-diligence are critical, says Raman.

The start-up sector has also seen government initiatives help in early-stage fundraising. Start-up India Seed Fund Scheme, launched by the Department for Promotion of Industry and Internal Trade, with an outlay of ₹945 crore, to provide financial assistance to start-ups for proof of concept, prototype development, product trials, market-entry and commercialisation, which is disbursed through incubators. That said, India remains a land of mostly part-time angels, unlike other markets such as the U.S. or the U.K., and investors are extremely bullish on India. The country's problems offer these companies a chance to build entire business models around it, along with a potential to go global. "What works in India or even a part of India, will work in some other country in the world," says Padmaja.

Angel Investors in India

Angels Hold Steady Amid Funding Winter