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Results of a brief survey conducted among entrepreneurs in India. The subject was about the early stage funding scenario in India. Entrepreneurs responded to several Questions about their experiences in raising funds, challenges faced and future expectations
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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
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