Startup funding scenario in India _Entrepreneur survey

Startup Funding Scenario in India A Study on Startups By Verdure Venture Consulting

About VerdureBoutique Investment Consulting with focus on Start up Mentoring Early stage Fund raisingClients include:

Study ObjectiveVerdure Venture Consulting conducted thisstudy 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 raising15% of the total responding startups had raised fundingsuccessfully. (Way above the global success rate of 1%)

Funding amountAverage 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 findingsRound 1 of investments was mostly by family &friends and Angel investors while round 2 was mostlydone by angel investorsStartups had to pitch to an average of 5-10 investorsbefore they got invested67% of them stated that multiple rounds of pitchinghelped improve their business model and successrate with investors

VALUATIONS, NEGOTIATIONS ANDDUE 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 Methodology40% 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 takenDue diligence took less than a month in 54% of cases23% of startups responded that the process took over 3months time

Due Diligence - Paperwork

CHALLENGES AND EXPECTATIONSABOUT FUNDRAISING

Challenges experienced in fundraising

Future Expectations – Funding amount

Fundraising timeframes

Factors delaying the Fundraising process

Thank You For Details Contact saiswaroopa@verdure.inUsha.krishnan@verdure.in

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Startup funding scenario in India _Entrepreneur survey

by Saiswaroopa Iyer on Sep 28, 2011

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Startup funding scenario in India _Entrepreneur survey — Presentation Transcript