Build a portfolio, or do not start

Part 13 of 21 in A Guide for the First-Time Indian Angel Investor← Part 12Part 14 →

This chapter provides guidance for first-time Indian angel investors on building a diverse investment portfolio. It emphasizes the importance of making multiple investments and offers strategies for managing investment sizes and follow-on funding.

Twenty attempts. Reserves for the few that deserve more. A pace you can keep without becoming a part-time intern to founders.

The portfolio is not a sophistication. It is the only structure that gives luck a place to sit. If you cannot imagine twenty cheques over three to five years, you should not angel-invest directly. Buy a single SEBI-registered angel fund or an early-stage fund, accept the fee, and go back to your work. Concentration is not conviction when you have no information edge. It is hope.

Cheque size is a servant of count

Decide the sleeve from the sleep test. Divide by twenty, then cut the first cheque further so that about a third of the sleeve can follow the winners. A crore sleeve is not twenty cheques of five lakh with nothing left. It is closer to fifteen opening cheques and a reserve. A twenty-five lakh sleeve cannot do this honestly as direct deals once fees are real. At that size, a fund is the portfolio.

Sleeve you can actually lose	Opening cheques	Held back for follow-on and costs	Direct deals, or a fund?
Rs 25 lakh	Do not spray	Most of it	One fund, or nothing
Rs 1 crore	12 to 15 small tickets	About 30 percent	Direct only if fees are low
Rs 3 crore	15 to 20 tickets	About 30 percent	Direct can be rational
Rs 10 crore	20 or more, still small	Reserves matter more	Direct, plus one fund to compare yourself

Follow-on is where amateurs ruin the power law twice. They refuse to fund the winner because they are emotionally attached to the corpses, or they fund every corpse to avoid admitting a loss. A simple rule: follow only companies that have earned a new fact — revenue from a stranger, a retention number you have seen, a lead investor you respect putting in new cash on clean terms. Do not follow because the founder is sad, or because your first cheque needs company.

Pace

Four to eight new companies a year is enough. More than that and you are not reading. Less than that, stretched over a decade, and you may simply miss the window in which the outlier was raising. Maher’s caution against clicking into deals in your slippers applies here. A monthly meeting with yourself, a written pass note, and a cap on how many pitches you will take, beats a permanent state of “looking.”

Where the attempts should differ

Twenty copies of the same D2C brand is one bet. Vary something real: sector, city, business model, founder background. Do not vary so widely that you cannot understand any of them. An HNI who knows clinics, distribution, or small-factory economics should lean into that and refuse the deep-tech story they cannot interrogate. Edge is local. Luck is general. You need both, and you only control the first.