Angel Investment for Startups Tier II & Tier III Region
Nativelead Foundation and it's investment arm Native Angel Network (NAN) is an initiative by the local community of Madurai to build startup ecosystem at Tier II and Tier III regions.
An excellent case in study is Sai Happy Farms, a Madurai based poultry brand is India's first brand selling free range eggs. Free range refers to the traditional way raising hens by letting them roam free and forage as they liked. One of the co-founder a serial entrepreneur is has been manufacturing and selling herbals of multiple varieties. He used to feed the hens at his backyard with those herbals and found to be with extra minerals and nutrients. He met his co-founder through social media who was also attempting a similar concept. Thus, this novel concept matured into a startup in 2012. Natural and nutritious feeding along with following The Royal Society for the Prevention of Cruelty to Animals that defines space for each bird.
As a startup with a completely unique concept and with no support from traditional bankers it was struggling financially. NAN identified this startup at an event in Madurai, and invested Rs 50.00 lakhs which made matters smoother for the startup. Now, the startup has scaled with its eggs being available at pan-India scale. As, Vice-President (Operations) at NAN, I had worked on this first assignment for NAN and of course, for me too. That was an incredible opportunity to learn the angel investment process.
Founder Agreement and Resolving Founder Conflict
HealBridge a health tech startup faced founder conflict due to unclear role responsibilities. The startup was building a digital health platform solving patient-side healthcare access problems by bringing essential services like medicines, diagnostics, and nursing to the user's homes. The same was founded by two co-founders.
As the company began growing, both founders started overlapping on product decisions, partner discussions, and hiring, which created confusion about who was accountable for what domain. This ambiguity lead to friction because each founder start questioning contribution, authority, and fairness of the other.
BKD Advisors facilitated structured conversations between the founders towards resolving the issue by mapping each founder's responsibilities clearly. Because the responsibilities had only been discussed verbally, the team had no agreed framework to settle the disagreement. A strong founder agreement could have prevented much of this conflict by clearly defining responsibilities and dispute resolution methods.
The founders' agreement was prepared by BKD Advisors by clearly defining responsibilities, ownership, voting rights, vesting, and dispute resolution methods. Fair process for exit, termination, and governance was also included. Each founder's domain was documented, with one taking primary responsibility for technology and product, and the other for partnerships, administration, and fundraising support. In investor conversations, this kind of documentation will signal maturity and reduce due diligence risk.
The key takeaway is that the founder agreement is not just a legal formality; it is a practical tool for preventing conflict and preserving execution speed.
Valuation: Too Little or Too Much?
One of our clients, LogiFlow Technologies, is a B2B SaaS startup in Chennai that provides an AI-driven logistics optimization platform for startups and SMEs.
The startup has bootstrapped an MVP, onboarded 10 paying customers, and now want to raise a seed round. They approached BKD Advisors with one dominating question: "What valuation can we get?" Our response was: "Valuation is important, but the bigger question is, how much capital do you really need, and what does 'right dilution' look like for your long term plan?"
When investor conversations start, one prominent seed fund network was interested and proposed an investment of ₹2.5 crore with an implied dilution of 25%. The founders felt this "undervalues" their startup and at first, refuse to move above 18% dilution. The deal got struck.
BKD Advisors reframed the situation:
- First, we benchmarked valuation ranges for comparable B2B SaaS startups and showed that the offer is within market norms.
- Second, we showed the founders a side by side view: slightly higher dilution today versus the cost of delaying the round, reducing runway, or doing a future emergency round at a much lower valuation.
Meanwhile, the founders were advised to focus on creating interest from multiple investors and be flexible within a reasonable valuation band. Made the founders understand that for seed round, most markets see "normal" dilution is 15% - 25%, with 12 – 18 months runway and it's not all about the valuation and the ownership percentage but the long term goals.
The founders re engaged with the lead investor. They accepted a structure with 23% dilution and raised to survive 12-18 months.
