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If you want to invest in the growing Indian start-ups but don’t have many funds, you are in for good news. Things are changing for good in the country, and investing in the rising companies is the best part of it.
Tyke seems to be the ideal project in this segment.
With features of letting its users invest in start-ups as low as Rs.5000, the company has brought a revolution to the nation.
I did deep research on this, and this is my take (and in-depth review) on it.
- What Is Tyke?
- Features Of Tyke
- The Investing Instruments Of Tyke
- Benefits Of Tyke
- How To Invest In Tyke
- How Well Does Tyke Standup Against Grip & Klub
What Is Tyke?
Tyke offers users the to instantly make investments in the Indian start-ups with a minimum investment of just Rs.5000. You can go to their platform and have a look at the different companies listed on their platform.
You can even read the pitch of the company and the past performance to make a better decision.
The primary goal of Tyke is to allow retail investors to participate in the start-up investment space and make handsome profits, just like the angel investors.
Along with the continuous support and assistance, Tyke also offers many features that are in the interest of the investors and gives them safety for their investments.
Features Of Tyke
There are many features offered by Tyke for start-ups and retail investors. Let’s have a look at them.
1. Investment Deals
As you sign up for the platform, you are eligible to take part in the start-up funding rounds. With a user-friendly interface, the users can easily browse all the deals available and make their decisions.
You can read all the details about the company, their past track record, how they manage their operations, and what all these companies offer to the investors.
2. Seamless Onboarding For Founders
If you are a founder and want to raise funds from retail investors or directly from your community, Tyke can do the job for you.
Simply, sign up for the platform. It involves paperless documentation and verification. Get all your fundraising procedures in one place with this feature.
3. Investing Within A Minute
If you are sick of the never-ending paperwork and the formalities while making an investment, then those days are gone.
Tyke lets you invest in a start-up within a minute. Complete all the formalities seamlessly and get onboard with your ideal investment.
You can even interact with the founders of the company and know more about their projects.
You can manage your terms, read all the documentation of the company, and monitor your portfolio on a real-time basis with this feature of Tyke.
4. Private Rounds
If you are a founder and want your community to stick with you on this journey, then the private round is your go-to feature. In this, you can book a call with Tyke, brief the team about your idea, and schedule a private round with the team.
You can send personalized invites to investors and your community members.
You even get to reward your community members or investors with stocks of your company directly through Tyke. This boosts the network for your company.
5. Community For Investors
Everyone loves to interact with like-minded individuals, and you get to do that on Tyke. The community feature of the platform lets you interact with other investors, start-up founders, and all the other users of the app.
You can participate in the frequent AMA sessions that are filled with knowledge and information about this field.
The Investing Instruments Of Tyke
There are various ways to invest in a start-up with Tyke. However, with investment comes a lot of risks of losing your hard-earned money. To tackle this, Tyke has a feature known as a T-SAFE.
What Is T-SAFE
T-SAFE is created with the sole aim of protecting the interests of the investors and giving them a brief detail on the terms and conditions of the investments.
It is very much similar to SAFE– An investing instrument widely used by Angel investors and VCs who invest in start-ups across the world.
This is primarily made for the companies with investing campaigns having hundreds or even thousands of investors.
T-SAFE offers a financial stake to the investors in the start-ups. However, this does not involve any equity rights. Now, this financial status basically means a CCD(Compulsory Convertible Debenture) during the time of issue. Later, this gets converted into equity in the event of acquisition or IPO.
Now, T-SAFE supports four different types of Investing Instruments on the platform. Let’s understand how they work.
- CCD- Compulsorily Convertible Debentures are securities with the same financial rights as a shareholder of the company. However, they don’t participate in the management or meetings of the company, unlike the shareholders. They have no voting rights, and they don’t show up on the cap table.
- CSOP- Community Stock Option Pool is an investing instrument by Tyke. Just like an ESOP (Employee Stock Option Pool) where the company offers equity to the employees of the company, a CSOP offers equity to the community of the company. This includes no voting rights or a place on the cap table. A CSOP is a great way of holding the community of the company through this practice. Read more about the difference between CSOP and CCD.
- NCD- If you want a safe investment option, go for Non-Convertible Debentures(NCD). These types of secured debt securities offer maximum safety to the investors and give them a fixed rate of interest on a specified time period. You even receive your entire investment amount when the contract expires. Just like CCD and CSOP, an NCD is also not present on the cap table.
- CCPS- A Compulsorily Convertible Preference Share is a hybrid security that gives a fixed income to the investors and is compulsorily converted into equity shares. They have the same financial rights as the shareholders of a company. However, they don’t have any voting rights and do not come on the cap table.
Benefits Of Tyke
One of the primary benefits of Tyke is that it offers one-document security without tons of paperwork and formalities. You can invest in your favorite start-up within minutes and still understand all the terms and conditions of the investment.
2. Safe & Secure
With the agreement done on the basis of T-SAFE, the interests of the investors are always protected. You get preference rights in the company, which is better than the shareholders when it comes to the repayment of the investments.
In the event of winding up of the company, you are eligible to receive your payment first with a T-SAFE agreement.
3. Affordable Deals
No, you don’t have to invest lakhs of funds to be a part of the growing start-ups anymore. With Tyke’s deals, you can invest as low as Rs.5000 in a company. This gives a sense of safety and flexibility to diversify your portfolio.
4. Get Equity Benefits Without Many Hassles
Another great advantage of getting started with Tyke is that it offers Equity to its users upon approval without involving the role and the work of an equity holder of the company. You don’t need to attend the general meetings of the company or sign hefty documents.
It has a very easy exit from the company if the need arises and offers many information rights to the investor.
How To Invest In Tyke
Investing in a start-up has never been easier. All you have to do is pick your favorite deal, read all the terms, make the payment, and finally sign the T-SAFE agreement.
Let us see how step-by-step how you can make your first investment in a start-up with Tyke.
1. Go to the Deals section from the Dashboard of the platform
Here, you can easily monitor and screen your favorite companies and read all the details about their operations and management by clicking on them.
2. As you open a particular deal, you will get the option to proceed with the investment.
3. Note that you won’t be able to move further in this deal without getting your KYC verified. This increases the safety and credibility of both the investors and the company.
4. Now, you can choose the funds you want to use for investing in a start-up. You’ll be able to see the total amount, taxes involved, and the final sum that needs to be paid.
5. After doing the payment, you can easily find your investments in your analytics section.
6. The final step left in completing your investment is to sign the T-SAFE agreement. To do so, open the T-SAFE agreement and start the E-signing procedure.
7. You can choose your signature and finish the entire process. Not to mention, it takes hardly 5 minutes to finish the entire investing procedure.
8. After entering the OTP, you’ll be able to successfully close the deal and be a part of your ideal start-up.
How Well Does Tyke Standup Against Grip & Klub
With a couple of options available in the market, it gets confusing to opt for the best platform for investing. Currently, the start-up investment sector is being dominated by three companies–Grip, Klub, and Tyke.
So, let’s compare all three of them and decide which one stands out among the rest.
What Is Grip?
Grip is a digital investment platform that allows its users to invest in various alternate assets. These alternate assets comprise Lease investment, Inventory Investment, Commercial Real-Estate Investment, and Start-up Equity Investment.
With Grip, you can easily sign all the documents online and acquire any of the assets from the comfort of your house.
What Is Klub?
Consumer brands investment like FMCG, fashion, and subscriptions.
Brands have a minimum revenue of Rs.15 lakh with 60-70% gross revenue
Klub work is an investing platform that works on consumer brands from sectors like FMCG, Fashion, Subscription models, and more. The platform allows the users to invest directly in these brands and earn fixed monthly returns. It also offers consumer brands good fundraising services and private rounds.
As we have already discussed with Tyke, we will now compare the features and the benefits of all three apps.
Features Of Tyke
- Start-up investment starting with just Rs.5000
- Multiple investing instruments
- Get fixed monthly returns
- Gives all the financial rights of a shareholder
- Quick onboarding and investment
Features Of Grip
- Investing options in alternate assets including Lease, Commercial Real Estate, Inventory, and Start-ups
- Paper-less documentation
- Minimum investment starts from Rs. 10,000 in Lease assets
- Fixed-monthly returns for the investors
- Finish signing up your investments with an E-sign
Features Of Klub Works
- Invest in consumer brands
- Read the entire pitch and the financial record of the companies
- Get around 18-25% monthly returns
- Get Revenue-Linked capital without dilution
- Provides Debt Funding
After analyzing all the three investing platforms, one thing is certain, India is witnessing tremendous growth in the business sector. With so many different features and services, people can now easily make investments in rising companies without having crores of rupees.
The stock market reports only 3% of Indians participate in the markets. However, this poor fact seems to be taking a turn as so many retail investors seem interested in the start-up investing sector.
After using all three platforms for a while, we can say that they fulfill different requirements of the founders and the investors. Let’s understand this with a brief comparison of all the three platforms.
- Tyke offers a minimum investment of Rs.5000, the lowest among other players in the market
- Grip app offers Lease investing and Commercial Real Estate Investing, a feature that is not available in Tyke or Klub.
- All three platforms offer paperless documentation and hassle-free onboarding.
- Tyke offers equity to the investors as an option, whereas Klub lets its founders raise funds without dilution.
- Tyke is more focused on holding the communities of the start-ups by offering revolutionary investing instruments like CSOP. Klub and Grip, are more focused on giving investment opportunities to the retail investors and funds to the start-ups as their primary goals.
- You get to have more deals on Grip and Klub in comparison to Tyke at the moment
Overall, all the three platforms are good in different sectors. If you are just interested in equity investment in a start-up, then Tyke can be a good fit for you.
But, if you trust in Lease investing or investing in consumer companies that offer value to the ground level, then you may go for Grip or Klub simultaneously.
After reviewing the Tyke platform and comparing it with its competitors, it is very clear that Tyke does offer cheaper and more affordable deals to its users than Grip and Klub.
With its CSOP and CCD instruments, you get to make good investments in your interest. The T-SAFE agreement that provides safety and smooth conversion of securities into equity is also something worth using.
Overall, Tyke does give a lot of opportunities for the growing start-ups and retail investors to make the most out of their money. Let me know what you think about the platform and whether you will invest your money in this platform or not.
Is it safe to invest in start-ups?
Investing in a start-up does involve a lot of risk for the investor. In the events of the winding up of the company, there is a possibility that you lose your principal amount as well. Hence, it is mandatory to read all the terms and conditions beforehand.
Can anyone invest in a start-up?
Gone are those times when only VCs and Angel investors had all the juice from the rising companies. With the introduction of start-up investing platforms like Tyke, you can easily invest in a start-up listed on the platform with a valid government ID and a minimum of 18 years of age.
Is it legal to invest in start-ups?
It is completely legal to invest in a start-up in the country. However, it is not yet regulated.
What are my rights as an investor in Tyke?
You have several rights when you become an investor on Tyke. The information right lets you receive all the details about the company, its past performance, and revenues. You get financial rights with your investments, which means that you can easily sell off your investments in secondary markets or collectively when there is a 100% buy-out of the company.
Can I talk with the founders of the company I am investing in?
Yes, with Tyke’s community feature, you can easily interact with the founders of the companies and other investors.