Inside the growing predicament of India’s angel investors

Back in 2021, at the height of startup funding in the country, S, a senior executive at a leading unicorn, considered investing in emerging tech companies—both to give back to the ecosystem that had made him millions and to generate more wealth.

With $7 million in ESOPs from his nine-year career, S saw startup investments as a way to support innovation, while also benefiting financially from such high-growth ventures.

His reasoning was sound: Annual startup funding in India had reached an all-time high of over $45 billion, fueled by billions pouring in from foreign investors, making the country the world’s third-largest startup ecosystem. New unicorns—startups valued at over a billion dollars—emerged almost every week. Industry experts believed there was no better time to invest. Founders and top executives were actively investing, and even traditional high-net-worth public market investors were embracing startups as a legitimate asset class.

“My idea was simple. I saw people like Sujeet Kumar [of Udaan] and Kunal Shah [of CRED] investing in startups. The advantages are twofold—you often make money, and you help young entrepreneurs at crucial early stages when they need support the most,” S, who requested not to be named shared.