Startup Funding Scenario in India

A Study on Startups By Verdure Venture Consulting

About Verdure
Boutique Investment Consulting with focus on
Start up Mentoring Early stage Fund raising

Clients include:

Study Objective
Verdure Venture Consulting conducted this study to
understand the startup funding environment in India better effectively address various challenges faced by startups in fund raising provide tailor made fund raising services

KEY FINDINGS

Success Rate in Fund raising

15% of the total responding startups had raised funding successfully. (Way above the global success rate of 1%)

Funding amount

Average amount raised in Round 1 was between INR 25 L to 50 L Round 2 was between INR 1 & 2 Crores

Fundraising timeframes

Round 1 funding took typically between 3 to 6 months Round 2 fund raising took typically from 3 to 9 months

Other miscellaneous findings

Round 1 of investments was mostly by family & friends and Angel investors while round 2 was mostly done by angel investors Startups had to pitch to an average of 5-10 investors before they got invested 67% of them stated that multiple rounds of pitching helped improve their business model and success rate with investors

VALUATIONS, NEGOTIATIONS AND DUE DILIGENCE

Negotiations No of Rounds

Further Negotiations

* Specific clauses in the agreement or legal structure

Valuations

80% of startups expressed happiness at the valuation they received 20% thought that they could have done better.

Valuation Methodology

40% of the respondents said that the valuation was based on haggling between parties and reasons other than scientific methods like projections and stok preferences

Due Diligence Time taken

Due diligence took less than a month in 54% of cases 23% of startups responded that the process took over 3 months time

Due Diligence - Paperwork

CHALLENGES AND EXPECTATIONS ABOUT FUNDRAISING

Challenges experienced in fundraising

Future Expectations Funding amount

Fundraising timeframes

Factors delaying the Fundraising process

Thank You
For Details Contact

saiswaroopa@verdure.in Usha.krishnan@verdure.in