1. ‘b’ Stands Before ‘a’ In Venture Investing

    Most classical venture capital firms prefer to become the first institutional investor in a startup. Though risky, funds enter at a lower valuation in the first round, and hope to multiply the value of their investments when the company goes for subsequent rounds of funding or an exit. So, ideally, VCs’ sweet spot has been the first round of investment or Series A. But, if the trend in investment stages is any indication, venture capital funds in India have shown a tendency to shirk risk and go for more established companies or those who are already backed by VCs. Even ...
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    1. The downturn has made VCs realise that companies will take time and (a lot of) capital to scale in India. Companies require a lot of heavy-lifting at the early stages. But VCs have a limited bandwidth to do this.
    2. Even though VCs are not doing exclusively late stage investments, they are balancing out their portfolio with Bs and Cs along with As.
    3. Most firms will at least balance their portfolios and look at series Bs and Cs in parts if not exclusively late stage. Ours is a balanced portfolio approach, we will do early stage with mid stage, going forward.
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