Rajiv:
Aniruddha, I’ve been thinking of getting into angel investing. I’ve built up some capital and want to support early-stage founders. But honestly, I don’t know where to start—or what pitfalls to avoid.
Dr. Malpani (smiling wryly):
Then you’re already ahead of most first-time angels. At least you’re asking questions before writing cheques. Let me start by being blunt—angel investing is risky business.
Rajiv (raising an eyebrow):
I expected that. But how bad can it be?
Dr. Malpani:
Bad enough that I’ve had to publicly call out a founder recently for dishonest behavior. The founder of a startup called PickQwik, Prabhat Sahu, pitched to us. Charismatic, confident, articulate—he ticked all the boxes on the surface.
But when we dug deeper during due diligence, we found serious red flags. We gave him a chance to explain. Instead of clearing the air, he went on about how “emotionally hurt” he was that we didn’t trust him enough to give him funding.
Rajiv:
That sounds manipulative.
Dr. Malpani:
It was. That’s the hallmark of a cheat—playing the victim when caught. A founder with integrity would’ve answered questions directly. But when someone tries to emotionally guilt-trip you instead of giving evidence, that’s your red flag waving in neon lights.
Rajiv:
Did you consider just letting it go?
Dr. Malpani:
I could have. After all, we didn’t invest—so we escaped financial loss. But had I stayed silent, he might have fooled another investor. That’s why I chose to speak out—because actions must have consequences.
Rajiv:
Isn’t there a risk you’ll scare other founders away?
Dr. Malpani:
Only the dishonest ones. I’m not out to play crusader. But if we want a clean startup ecosystem, we need to build a culture where speaking out against fraud isn’t taboo.
The sad reality? Most people—investors, employees, even other founders—don’t call out bad actors. They worry about reputation, legal threats, or simply “moving on.” And that silence helps cheats thrive.
Rajiv:
So, you believe this one case reflects a bigger problem?
Dr. Malpani:
Absolutely. When one founder scams an investor, it’s not just about the money. It damages trust across the board. After being cheated once, most investors start viewing all founders with suspicion.
And the damage isn’t local. When Indian founders cheat, they stain India’s global reputation. In the US, founders like the Theranos CEO go to jail for fraud. Here? They just raise their next round from someone else.
Rajiv:
Do you think this is a systemic issue?
Dr. Malpani:
Yes—but it’s fixable. First, we need zero tolerance for fraud. Second, we need more transparency. Investors need to share notes, do deeper due diligence, and call out dishonesty when they see it.
And founders? They should call out shady investors too. This goes both ways. If we all speak up, we create an environment where the ecosystem polices itself—and the bad actors get weeded out.
Rajiv:
That sounds fair. So what have you learned from this?
Dr. Malpani:
Many things. First—charisma is not competence. Second—always do your own due diligence, no matter how glowing the pitch deck or how many buzzwords are thrown around.
And third—you can fool some of the investors some of the time, but not forever. It’s a small world. Investors talk. Reputations travel faster than pitch decks.
Rajiv (nodding):
So are you done with investing?
Dr. Malpani (smiling):
Not at all. If anything, I’ve become sharper, wiser, and more resolved. I’ll continue backing frugal, honest entrepreneurs who focus on customers, not just investors. People who build to last—not to impress.
Rajiv:
And bootstrapping?
Dr. Malpani:
Always my first love. It keeps you grounded. When you build from scratch, customer by customer, you’re forced to create something valuable. You stay lean, stay real, and stay accountable.
Rajiv:
You’ve given me a lot to think about. Angel investing sounds less glamorous than I imagined—but a lot more meaningful when done right.
Dr. Malpani:
It is. It’s not about betting on the next unicorn. It’s about backing good people building good businesses. That’s the kind of legacy worth creating.
Want to learn more about bootstrapping and creating sustainable businesses?
Explore more insights and resources for entrepreneurs at www.malpaniventures.com.
Let’s build businesses that put customers first!