Info Edge Founder Sanjeev Bikhchandani Reveals His Checklist For Investing In A Startup

Info Edge Vice Chairman Sanjeev Bikhchandani has shared his mantra to pick the right startup to put his money.

According to the ace investor, the people and the idea are the two main things he takes into account before picking a stake in a particular company.

Talking to NDTV Profit, the Info Edge India Ltd. founder said that he invests on the basis of the usefulness of the startup's idea and the people behind it.

“If both these questions are answered as yes, then we know that this company is in with a shot. Thereafter, we go further,” he said.

Bikhchandani is credited with having one of the best investor portfolios in the country, with his company Info Edge being the angel investor of many successful startups, including Zomato and PB Fintech, the owner of Policybazaar. Both the startups have turned out to be dominant players in their respective sectors.

He has also made significant investments in Titan, which has given him sizable returns.

"Most successful businesses are built on deep customer insights about some unsolved problem. You need to see what the customer insight is and what problem the company is solving. And you have to look at the quality of people—how committed they are, how capable they are, their integrity,” Bikhchandani added.

Once the first two conditions are met, then the investor may look for other factors like competition, networking effect, intellectual property, structure, economies and all other things, he said.

“But those are all the things that you look after; you are committed to the founder and the idea,” explained Bikhchandani.

According to him, a company takes at least 10 years to build and investors need to be patient if the quality of the people in the company is good enough. However, things may not work out at times.

“Being patient is not whether you want to give the company your time. It is about whether you want to give it your money,” he said.

“There will come a point when maybe you don’t have the confidence to give them more and more money and maybe there are no other investors there,” Bikhchandani said, adding that one has to take a call when that happens.

Listing out key red flags to know when to stop investing in a company, he said Info Edge does not give entrepreneurs infinite money.

“When there is no external market validation, there is no involved interest from the venture capitals, there is no clear path to profit emerging, the entrepreneur is getting tired—these are all red flags that you look at in a company and then figure out (about stopping investment),” he added.