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