Former investment banker turned entrepreneur Rupa Popat is the founder & Managing Partner of Arāya Ventures. She shares her practical advice for anyone looking to launch their own company in 2024.
Entrepreneurship was always on the cards for Rupa Popat. After eight years in investment banking, she founded FUTR Group, before exiting in 2019. Since then, she has invested in over 40 startups and VC funds and says, “I grew up in an entrepreneurial family, so it was very common to have business ideas discussed around the breakfast table. It was always my plan to become an entrepreneur, but I ended up working in investment banking longer than I expected. It reached the point where I was turning 30 and thought if I don’t give it a chance, I’ll regret it.”
Despite this determination to go out on her own, it still took Rupa longer than she expected to actually quit. “My career in investment banking had accelerated so quickly and it was much more than I’d imagined. So I kept putting off my move. I took my resignation letter in for weeks before handing it in! It was such a big move going from structure and income into the unknown of entrepreneurship. But I believe that a mindset of embracing the unknown is key to success.”
A focus on diversity
Rupa went on to set up Arāya Ventures, a venture capital firm investing in exceptional entrepreneurs who are transforming the way we live and work. She is an advocate for investing in women and underrepresented founders, a focus that is very much needed. Currently, female-led companies make up just 18.2% of active UK companies. And while our Gender Index data shows a record number of female-owned companies were created in 2023 (160,730), women are still struggling to access funding. Just 23.4% of female-led companies accessed external capital last year.
Rupa says, “Having been a female entrepreneur trying to raise investment, I know how challenging it is. Only 2% of capital goes to female founders. So, when I started angel investing, whilst I invest in all founders, I applied a diversity lens across my investments as I believe diversity drives superior returns.”
When friends and family asked Rupa to invest on their behalf, she founded Arāya Ventures. “We need to think about diversity at every level: 65% of our portfolio have at least one female co-founder and 50% have at least one ethnic minority co-founder. And if has been proven that companies with a female founder performed 63% better than investments into all-male founding teams for one tier one VC firm and Pitchbook found that female founders reach exits quicker and their companies grow faster at the time of exit. Therefore investing in diversity across gender, age, socio-economic status and ethnicity and having a representative portfolio is important.”
The truth about angel investing
Rupa is keen to dispel the myths around angel investing to encourage more people to get involved. She says, “Before I started, I was told that you need a lot of money, you must have a large founder network and that you need to be technical in financial models. These are myths and are untrue. You don’t need to have lots of money, you can invest from £1,000 in many early-stage deals and can get involved in impactful companies that are making a difference in the world.
Rupa has since launched a course and community around angel investing, with practical steps on how to get started. “In the UK only 14% of angel investors are women, and less than 5% have more than 10 investments. My goal is to get 1,000 more women into angel investing in the next 12-18 months.”
Make the change
Looking to make the leap from employment into entrepreneurship this year? Rupa says, “In hindsight, there are things that could have helped me to minimise the adjustment.” Here are her top tips:
1. Get startup exposure
Launching your own company is very different to being an employee. Rupa says, “I was used to the trading floor, so when I started my first business, everything felt really slow. My advice is to take on a fractional role at a startup. This will give you some exposure and see how your skills can be translated into an entrepreneurial business whilst relieving some of the pressure of switching full-time into your business.”
2. Focus on what matters
Finally launching your startup is an exciting time. But Rupa warns about getting distracted by things that don’t matter. “If you are spending four days a week on things that aren’t connected to customer acquisition or product market fit, you may not be managing your time effectively. That’s where you need to make sure your focus is in the early days.
3. Have a funding strategy
Rupa is also an Entrepreneur-in-Residence at Morgan Stanley Inclusive Ventures and says, “Many of my portfolio companies ask for guidance around fundraising and my suggestion would always be to put a fundraising strategy together early on. You want to consider how much to raise, what would be the best routes of funding, when to start conversations, having an impactful and succinct deck and who would be potential investors to approach. Successful founders realise you need to put a strategy in place, you can’t just start without it.” However she adds, “There is a misconception that every founder needs to be a venture-backed business. But venture capital isn’t for most founders. It’s important to find the right funding for the business model you’re building and be realistic about that.”