AAN funds the Business which are covered under following lines of business
- Business which add value to Automotive OEMs and Tier 1/Tier 2 suppliers
- Business which focus on the technology and within the auto industry – Tech centers, R&D, and advanced engineering
- Business which focus on gaining insight and strategic relationship on US – India for Automotive and connected transport sector.
- Business covering areas of artificial intelligence, autonomous vehicle, security, IoT, RADAR and LIDAR would be reviewed on accelerated basis.
B. Source for Deal Flow
A primary source of deal flow for AAN is through Automotive and allied industry, member referrals, and members are encouraged to refer deals that they find attractive to the Network.
- Automotive and allied industry Entrepreneurs -who can submit their business plans directly on our website i.e. Elevator Pitch
- Member angels
- Investment Bankers, Angel networks and other partners
C. Secretariat Screening
Business plan of applicant is reviewed based on following criteria’s,
|Sr. No.||Selection Criteria|
|1||Business model matching with or in line with requirements of Automotive and Connected transport sector|
|2||Status of Prototype (Pre-idea, idea, Proof of Concept, Launch, Growth)|
|3||Founders & Quality of Leadership Team|
|4||Quality of advisers or board & key partnerships in place|
|5||Technical and Operational Feasibility|
|8||Market Opportunity (Size)|
|9||Key USPs (e.g. disruptive technology)|
|10||Go to Market / Sales Strategy|
|12||Financial Plan (Viability)|
If the Secretariat believes it is an attractive investment opportunity, entrepreneur will be invited to deliver a 30-minute pitch to our members either personally or via Skype, Video conferencing, etc.
We receive a substantial number of applications and most of them are turned down without AAN meeting them in person. Only entrepreneurs who have convincing and realistic probabilities of securing funds are only invited to pitch at the session.
D. Formal Presentation
Pitch Deck, Required Investment, expected valuation and dilution details are posted on the AAN exclusive portal for comments and remarks from AAN members.
AAN meeting is held on once in every month / quarter where usually three-four companies are selected to present. Each company is allocated a 30 minute slot, (20 minutes to pitch and 10 minutes for Q&A session). A thorough discussion of each investment opportunity (i.e. presenting company) takes place.
All members present will then discuss and debate each investment and any concerns they might have, any additional information required, etc. Each positive investment group will nominate a member (the “lead member”), who will be the party to all discussions along with the Secretariat on deal valuation, structure and closure with the entrepreneur. Each Network member will be free to make his or her individual decision on investing in any given opportunity.
In order to proceed to the next stage in our process, the company will need to secure sufficient interest from members of the AAN and Investment Group formed with a provisional subscription commitment.
E. Term Sheet Negotiation
After successful completion of the business due diligence process, AAN will share a term sheet with the entrepreneur that defines the structure of the investment deal – including the amount / type of equity, rights of Autonebula Angels post investment, amongst other things.
F. Due Diligence
If a company receives sufficient interest from the members, the Secretariat proceeds to perform a detailed business due diligence. This is to ensure the sanctity and the hygiene of the company with regard to the business plan, team background, track record, financial projections, industry overview, competitive landscape etc. Secretariat, covers the Legal and Financial due diligence of the Company. In case if the proposed Investment requirement is about more than USD 1M Legal and Financial Due diligence is executed through external agencies. All cost w.r.t due diligence are to be incurred by Investee company.
Once the due diligence process is through and no adverse findings are noted, the Secretariat prepares an investment memo which is circulated to the members. Member provides their hard commitments after reviewing the investment memo based on their risk appetite and interest.
When all parties are satisfied with the terms and language contained in the Term Sheet and Shareholder Agreement, the deal can be executed and Secretariat move ahead with the execution of documents and fund transfer process.
H. Investment Monitoring
All investments are done in tranches with specific milestone to be achieved, Autonebula Angels Network Secretariat, Nominee Investor Director call for the monthly / Quarterly MIS from the investee company and analyses the same for the progress made w.r.t milestones and change in business model if any. Also, the same is confirmed in limited views from internal auditors and statutory auditors. Autonebula Angels Network in consensus with other large investors group if any dictates the terms of appointment of Internal and Statutory auditors of the Investee Company. Updates w.r.t above are shared with Investment Group on half yearly basis.
I. Post Investment
- It is expected that the AAN Members will work jointly with the entrepreneur to make the venture successful, where they have put time and money.
- The AAN member’s investing in a company along with the investee company and the Secretariat will select a Board member among the investing members. This member may or may not be the Lead Investor(s).
- Closing the deal is only the beginning of the involvement of Autonebula Angels in the company. The investors would proactively leverage not only their own network of contacts, but also the contacts of every other Member of the group. We would also help to arrange discussions with other investors for “follow-on funding”.
- Network members are collectively committed to contributing money as well as their time and expertise in businesses that they consider worth investing:
- Network members, when investing in an opportunity, will identify who, from within their group would be most appropriate to represent them on the Board of the company based on the ability to mentor and guide the company at strategic / operational levels as also availability of time to do so. The investment groups of Network members investing in an opportunity are encouraged to find ways to appropriately incentivize / reward those amongst the group spending disproportionately more time and effort on mentoring the company from within the equity negotiated by them but this is purely at the discretion of the investment group.
- Such Advisors / board members may be given stock options in the company by the entrepreneurs, provided these are over and above the deal negotiated by the investing group of the Network. However, such arrangements would need to be agreed by the investor and promoter groups and the secretariat kept informed.
K. Investment by Network Operator
- Autonebula Incubation Services Private Limited i.e. the Network Operator will invest limited amount with each investment group so as to act in protecting shareholders rights by becoming shareholder itself.
- Autonebula Capital Advisors Private Limited an Asset Management Company under the group’s umbrella can invest as an Institutional member subject to approval by its Investment Committee.
- No employee of Autonebula Group will be allowed to invest or subscribe for directly or through network or under any other form in any of the Portfolio companies of AAN, except for indirect investment from Fund/s operated by Autonebula Capital Advisors Private Limited.
AAN acts as a single point coordinator for end-to-end transaction documentation process on behalf of its members. Original share certificates post investment are handed over to Investor member and soft copies of common documents such as Terms Sheet, Share Purchase agreement, Share allotment resolution and forms and other relevant documents are provided via email to Investor Group.