He is 16, and already a 2x entrepreneur working to democratize startup investing

At first, Krishna Maggo would possibly look like your common 16-year-old scholar. Besides he is a second-time entrepreneur presently working a web-based fundraising platform for startups that competes with the likes of AngelList, Enterprise Catalysts, and LetsVenture.

Krishna, a grade-12 scholar from Delhi, ran Sateeq in stealth mode for about six months earlier than formally launching operations in April 2022. Inside a month, he had onboarded 10 corporations that had raised a minimum of Pre-Sequence A or a Sequence A fundraising spherical.

Amongst them, three are already dwell and elevating funds by the platform from a pool of 10,000 angel and marquee buyers. About 50 extra startups — together with some backed by buyers similar to Mumbai Angels, Ivy Capital, and Deshpande Startups—Are on the waitlist.

Sateeq, which suggests ‘correct’ in Hindi, lately raised an undisclosed sum from buyers together with Himanshu PeriwalFounding father of Unlu; Sarthak GoelFounding father of Y Combinator-backed InVoid; Vaibhav Jalan, Vice President at Smallcase; and Amitesh Sinhaformer Linkedin India board member.

“Sateeq solves an actual downside for each the demand and provide aspect by expertise,” says Amitesh, additionally a Accomplice at SIMA Funds. “On the demand aspect, lower than 0.1 % retail buyers are capable of spend money on different belongings similar to startups. On the provision aspect, lower than 5 % of startups are capable of increase funds from buyers. Sateeq solves for this unmet demand utilizing expertise to match these stakeholders. ”

Sateeq

A precocious calling

Krishna’s entrepreneurial journey took roots when he got here throughout books on enterprise and entrepreneurship as a sixth-grader.

“A few of the earliest books I learn had been Wealthy Dad, Poor Dad, and Suppose and Develop Wealthy. Greater than studying books, I used to look at numerous YouTube movies on enterprise case research and tales of worldwide and nationwide enterprise leaders similar to McDonald’s, Sachin Bansal, and Ritesh Agarwal. They made me wish to discover entrepreneurship sometime, and actually, I needed to develop into wealthy and highly effective, ”Krishna recollects.

“However now I’ve a brand new calling: I wish to construct one thing.”

In 2021, when his tenth board exams acquired canceled through the second wave of the COVID-19 pandemic, Krishna determined to make use of his free time to construct his first firm, GrowwVenturean angel investing platform.

From April to August 2021, he tirelessly reached out to angel buyers by e mail and LinkedIn. He managed to onboard 200 angel buyers however discovered it troublesome to construct buyers’ confidence within the platform. He additionally realized that the prevailing pool of angel buyers didn’t want one other platform to spend money on corporations. After working GrowwVenture for about 5 months, Krishna determined to close store.

He, nonetheless, turned his consideration to retail buyers who may not have the required capital to hitch conventional platforms as angel buyers.

“Angel investing is accessible to the next class of society,” Krishna says YourStory. “Conventional investing platforms require buyers to take a position a minimal of Rs 2-3 lakh, and require startups to have an annual turnover of round Rs 2 crore earlier than elevating any funds from marquee buyers.”

Krishna started constructing Sateeq, permitting abnormal of us to develop into angel buyers by pumping in as little as Rs 5,000 in startups.

“Krishna could be a 16-year-old, however his willpower, information, potential to drive a enterprise, and his thought course of as an entrepreneur are a lot better than many 30-year-old entrepreneurs,” says Himanshu, Co-founder of One, a celebrity-to-fan join platform.

Krishna Maggo, founding father of Sateeq

Sateeq: The way it works

Sateeq follows an invite-only mannequin for onboarding startups. Krishna’s workforce of 10 follows a three-step course of to confirm startups earlier than registering them. This contains scouting and vetting a startup by buyers related to Sateeq, adopted by an evaluation of funding alternatives. The ultimate stage includes roping in an exterior company for a due diligence report on the startup.

Startups on the platform join with buyers to lift group funding primarily based on Obligatory Convertible Debentures (CCDs) and Neighborhood Inventory Possibility Swimming pools (CSOPs)—Two instruments startups generally use to lift capital.

CCDs could be transformed into fairness after a particular time. Since its convertibility is a perceived benefit and depends on set off occasions similar to preliminary public choices, mergers, buy-backs, or secondary buyouts by new buyers, buyers are prepared to just accept a decrease rate of interest for buying convertible debentures. Presently, two corporations on Sateeq are elevating funds by CCDs.

One of many demerits of CCDs is that as per rules set by the Ministry of Company Affairs, corporations can’t increase funds from greater than 200 buyers utilizing this software.

That is the place CSOPs come into play as a substitute. Much like the Worker Inventory Possession Plans (ESOPs), Sateeq permits early-stage startups to introduce CSOPs to allot inventory choices to retail buyers in trade for a subscription quantity or funding cash. This fashion, corporations can increase funds from as many buyers as accessible, as there isn’t a cap on the variety of buyers who can take part. Presently, one startup on Sateeq is utilizing CSOPs to lift capital.

Sateeq operates as per pointers prescribed by the Corporations Act, 2013. In contrast to conventional angel networks, the platform does not facilitate investments utilizing SEBI’s Different Funding Fund Construction, and, therefore, doesn’t come below the capital market regulator’s purview.

For each fund raised, Sateeq receives a transaction charge from buyers amounting to 2 % of the invested cash. Startups pay 2-5 % of the funds raised. Moreover, buyers must pay an exit charge of two %.

The platform additionally facilitates personal funding offers and campaigns with a choose set of buyers. The platform does not cost any fairness.

Presently, Sateeq is at its pre-revenue stage.

Challenges of a teen entrepreneur

Krishna Maggo’s journey as an entrepreneur conjures up a resemblance to a different precocious former teen who’s now among the many nation’s most rich — Ritesh Agarwal, who dropped out of faculty to start out Oravel Stays, now OYO Rooms.

For Krishna, his greatest assist has been his mother and father. Nevertheless, even they had been hesitant within the preliminary days.

“Coming from a middle-class background, my relations and fogeys needed me to discover a job. Some recommended my mother and father not let me enterprise into the enterprise world till I accomplished my commencement, ”recollects Krishna.

The hesitancy additionally stems from Krishna’s father, who had tried his hand at enterprise and began a restaurant however failed.

“My dad’s failure in enterprise is likely one of the explanation why my mother and father weren’t assured with me exploring entrepreneurship. They’d witnessed a large lack of funding. However as soon as they noticed Sateeq attracting the eye of some actually huge names, they realized I used to be doing one thing proper, ”Krishna provides, squeezing in time to talk with YourStory after getting back from college.

That is one other vital problem: education.

“It is extremely disheartening to see that our conventional training system doesn’t promote entrepreneurship at any stage,” says Krishna. “Though I’m making headlines as a younger entrepreneur, there seems to be little or no assist from my college when it comes to serving to me handle my research and my enterprise.”

When colleges went on-line through the pandemic, he was capable of give equal consideration to research and Sateeq. With colleges reopening now, he usually has to compromise on his attendance and curriculum.

Krishna’s focus, for now, is to shut as many offers as doable and develop Sateeq’s community of buyers to 100,000.

He is already peering past, to faucet into the huge potential of a quickly evolving on-line universe. Krishna plans to discover alternatives in Web3 and introduce asset-backed tokens in investments. That, he says, is vital to permitting buyers to have fractional investments in startups by asset tokenization.

(The article has been up to date with new infographics).

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