Startup funding scenario in India _Entrepreneur survey
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Startup Funding Scenario in India
A Study on Startups
By
Verdure Venture Consulting
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About Verdure
Boutique Investment Consulting with focus on
Start up Mentoring
Early stage Fund raising
Clients include:
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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
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KEY FINDINGS
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Success Rate in Fund raising
15% of the total responding startups had raised funding successfully. (Way above the global success rate of 1%)
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Funding amount
Average amount raised in
•Round 1 was between INR 25 L to 50 L
•Round 2 was between INR 1 & 2 Crores
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Fundraising timeframes
•Round 1 funding took typically between 3 to 6 months
•Round 2 fund raising took typically from 3 to 9 months
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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
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VALUATIONS, NEGOTIATIONS AND DUE DILIGENCE
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Negotiations – No of Rounds
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Further Negotiations
* Specific clauses in the agreement or legal structure
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Valuations
•80% of startups expressed happiness at the valuation they received
•20% thought that they could have done better.
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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
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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
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Due Diligence - Paperwork
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CHALLENGES AND EXPECTATIONS ABOUT FUNDRAISING
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Challenges experienced in fundraising
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Future Expectations – Funding amount
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Fundraising timeframes
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Factors delaying the Fundraising process
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Thank You
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