Founder

The data is from Carta and mostly North American companies.

Welcome to Indian Startups's Private Community

50% increase in startup closures

Consultant

50% increase in startup closures- Grapevine

How many Indian startups shutdown from the beginning of 2024.

Journalist

https://www.moneycontrol.com/news/technology/from-gomechanic-to-zestmoney-why-thousands-of-startups-shutdown-in-2023-11953691.html

number of deadpooled startups, or companies in India that shutdown or were pushed to the brink of a shutdown, stood at 34,848 in 2023

Software Engineer

Like layoffs.fyi, is there any website that tracks startups that shut down on a monthly basis?

Startup shutdowns

Welcome to News Discussion's Private Community

- Start-up failures in the US have surged by 60% over the past year as founders deplete funds raised during the 2021-22 tech boom, risking millions of jobs and potential economic spillover.
- Data from Carta shows a sharp rise in start-up shutdowns, with 254 venture-backed clients going bust in Q1 2023, a rate over seven times higher than in 2019.
- High-profile casualties include Tally, Caffeine, Olive, Convoy, and WeWork, all struggling to secure necessary funding amid a challenging financial environment.
- The rise in bankruptcies is attributed to inflated valuations and misaligned incentives during the boom years, with VC investment and venture debt plummeting post-Silicon Valley Bank collapse.
- Despite a bleak outlook for many sectors, investment in AI start-ups is booming, with three-quarters of Kruze's $2bn raised in 2024 going to AI ventures, highlighting a shift in VC focus. 

 Source: [Financial Times](https://www.ft.com/content/2808ad4c-783f-4475-bcda-bddc0299095e)

Start-up Failures Surge by 60% Amid Post-Boom Challenges

Hi folks, 

I'm Kashish, the CEO of EquityList and Founder of Cloud Capital which I run as a solo GP.
A little bit about what we do: 

EquityList is a full-stack equity management platform by AngelList India. Companies across India, US and Singapore use EquityList to manage their cap table, stock options (ESOP/SAR), shareholders, and related compliances. Managing equity for 10k+ stakeholders, 250+ companies and ~$1B in stock options.

Cloud Capital has deployed $8M+ in 55+ startups such as Airmeet, Rupifi, Orange Health, DevRev, ZET (OneCode) and others. I've also angel invested in startups such as OSlash, Atlys, Chronicle, Even Healthcare and others.

Excited to do this AMA, and look forward to answering any of your questions about ESOPs, cap table management, investing, entrepreneurship, and more!

LinkedIn: https://www.linkedin.com/in/kashisharma

Live AMA: Hey everyone, I'm Kashish, CEO of EquityList. Ask me anything!

-Online brands are expanding offline to achieve scale
 -Late stage startups are gearing towards profitability earlier than planned 
-Biz models built on behavior during Covid are struggling (like edtech) 
-Startups which got funded due to TikTok ban are struggling 
-Finfluencers are soon expected to struggle
 -Credit Fintech w/o NBFC license is a struggle
 -Very few consumer content startups frm India are seeing scale and profitability
 -RMG is struggling due to regulations
 -India focused creator economy startups finding it difficult to scale 
-PLG led Indian SaaS startups not able to cross $20M ARR
 -Some VCs finding it tough to raise without DPI 
-Public markets thrashing innovative/vanity metrics of pvt VC funded cos. and their pvt market valuations 
-Series B and beyond is tough, down round/flat round is now common
 - Deals happening at single digit ARR multiple for SaaS valuations 
- Web3 startups not getting funded 
- Most GenAI startups not able to build any defensibility
- Most B2B Commerce startups are not able to increase gross margins or reduce NWC
 - CACs are ever increasing 
- Compliance issues at many startups - Layoffs to continue 
- startups which got funded in 2021, will soon be out of runway
 - no liquidity event for vested ESOPs in most Indian startups
 - secondaries happening at 35% discount in some cases 
- deal closure times have become 2x - less FOMO amongst VCs 
- More instances of M&A falling through

Harsh realities of Indian startup ecosystem

There’s now a list of 4-6 startups that have shut down and announced closure in December. Why is this happening

Why are so many startups shutting shop in December?

Business Development Manager

A lot of our lack of optimism comes from the above. 1/4th the funding in 2023 vs 2021!

We really have seen such a big nosedive from 2021 to 2023. Just the sheer numbers here!

Product Marketing Manager

Summary of layoffs at startups

With the host of startups closing down, was curious to know what does founder net worth usually result in and how do they generally make money for them along the way. Few questions-

1. Do founder sell percentage of own shares in Series A and B raises? I would assume there would be some checks on this but want to know what's the practical reality of this and if this happens what's the amount a founder can make through this 


2. If the startup is clear it has to shut down, what typically happens? Acquisitions? Insolvency?


3. Assume a Series B  level startup with valuation around 150 cr with say 10 Cr annual revenue and 40 cr losses and 30% founder stake and it's clear it has to shut down. In the absence of any acquisition, what money comes to the founder

Founder wealth gains in failed startups

well placed to answer this.
We recently shut down.
we had raised about 4.8 mn USD and were operational for 3 years.
When we decided to shut down we had about 500k in the bank.
The primary reason was so that we could clear all our dues and liabilities well.
We paid 2.5-3 months of severance, laptops to our team.
Then we had to clear a lot of statutory payments, which were usually taken care of from the monthly cash flows.
Then we hired a high charging consulting firm to ensure proper due diligence of closure process so that there are no surprises later, whether it was around taxation, vendor payments or any contracts.
Then we hired a law firm for the closure process.
After all this, the company was left with about 150k USD on the books.
This money was paid out to us two founders as severance payout.
In the 3 years of operations the founders in general averaged at less than 25% of their market salary, which meant depletion of personal resources completely.
The severance amount received by each of us was as good as 60-80% of our market salary.
Net net, financially, less money earned from salary + severance than would have earned in 3 years of my market salary job.
Hope this helps :)

Management Consulting

Been spending way too much time on Grapevine lately - absolutely loving it @Micheal_Scott!

Posted the Prosus report takeaways yday - lots of you DMed asking questions. Then I saw NewsAnchor break down the entire Prosus Annual Report - great stuff.

I was an Associate at one of the largest VC funds in India, so I enjoy going through new reports and summarising them - found my notes from Bain's India Venture Capital Report 2024. Thought of sharing the unedited summary that I shared with the Partners at the fund, have a bunch of these - can share more if of value to any of you here (ofc removing the confidential parts)

Notes:
1/ India's maintaining its gravitational pull despite the global funding crunch. Sure, overall funding nosedived 63% to $9.6B, but we're still the #2 destination in Asia-Pacific. Might not necessarily be a crash, it's a necessary course correction.
2/ Early-stage investing is showing remarkable resilience. Seed deals now comprise 70% of all deals, up from 60%, with average check sizes holding steady at $1.4M. Smart money is quietly positioning itself for the next wave of innovation.
3/ The tech-only playbook is being rewritten. While consumer tech, fintech, and SaaS still command 60% of funding, traditional sectors like BFSI are gaining ground, with average deal sizes jumping from $8M to $15M. We're witnessing the birth of tech-enabled, not just tech-centric, growth stories.
4/ The unicorn factory has hit pause, with only 2 new billion-dollar valuations vs. 23 in 2022. Mega-rounds ($100M+) plummeted from 48 to 15. This isn't a drought; it's a return to fundamentals. The era of grow-now-profit-later is firmly behind us.
5/ Generative AI isn't just hype; it's reshaping the landscape. Funding exploded from $15M to $250M, with 80% flowing to existing companies integrating AI. India's quickly becoming a laboratory for practical AI applications, not just speculative moonshots.
6/ Electric mobility is rewiring itself. While overall funding dipped slightly to $600M+, charging infrastructure investment surged 50%. The real opportunity isn't just in vehicles; it's in building out the entire EV ecosystem.
7/ Exits are defying gravity, leaping 1.7x to $6.6B. Public market sales led the charge at 55%, even as IPOs cooled. LPs are getting liquidity, and the secondary market is proving surprisingly robust. There's still appetite for quality assets.
8/ PE is no longer just watching from the sidelines. These players doubled their share to 25% of investments, going toe-to-toe with traditional VCs. The lines between growth equity and venture capital are blurring, and it's changing the game for late-stage rounds.
9/ We're watching natural selection in real-time. Yes, 35,000+ startups shuttered and 20,000+ layoffs hit the headlines. But companies like Groww and Indifi turned profitable. This isn't a bubble bursting; it's an ecosystem strengthening its foundations.
10/ Domestic VCs are coming of age. While overall fund-raising halved to $4B, homegrown VCs led 90%+ of raises. They're not just following; they're specializing, with thematic funds like Omnivore's $150M agritech vehicle. The ecosystem is bootstrapping its own future.
11/ Regulation isn't just tightening; it's evolving. Angel Tax expanded and lending norms got stricter, but we're also seeing innovative policies like UPI for foreign travelers. India's crafting a uniquely balanced approach to fostering innovation while maintaining stability.

Topics we can discuss during our standup:
1/ Can India produce global tech giants if it's primarily adopting rather than pioneering in areas like AI? How do we enable this?
2/ How will the shift towards profitability impact India's ability to foster truly disruptive innovations? Implications for us, how should we be evaluating deals differently?
3/ With domestic VCs leading the charge, how will this change India's startup narrative on the global stage?
4/ Is this maturation setting the stage for more resilient, globally competitive Indian startups, or are we risking our innovation edge? How do we look at thesis driven investing v/s fomo investing?

Link to Bain's report - https://www.bain.com/insights/india-venture-capital-report-2024/

P.S. Do note that this is 6+ months old - data points mostly look diff now but sharing it anyways. Will post more as and when I get time :)

My notes on Bain's 2024 VC report as a VC Associate

Investor

2022 has been the year of ESOP value destruction. Lets collect some real instances here. This silent but deadly phenomenon is hardly reported in mainstream media.

ESOP value obliterated

Business Analyst

Just an intersting data point. There are about 400 odd startups who raised at least 50m since 2010. Less than 20% are profitable.

Startups are not criticised for making losses. They sre criticised for making losses having raised insane capital at insane Valuation

Welcome to Office Gossip's Private Community

I think this is the worst phase to be in for looking out for jobs..

 just recently given an interview. Got the feedback of strong technicals but lacking confidence & bias for action in last round🥴 
was so confident to get hired in there but it looks they have found some low ctc ask candidate and thus, did some cost saving there..absolutely disappointing. 

are we heading into salaries correction phase for real? fyi i had asked fairly for industry standards.. do you guys quote ctc expectations during the initial convo with hr? any experiences here

Headed for a correction?

Program Manager

many companies are shutting down especially the named ones. many are close to getting shut. is there a good resource to track? want to keep it handy for future purposes. :)

which companies have shut shop in 2023 till now?

Product Manager

Welcome to Personal Finance's Private Community

Interest rates will only increase. How this will impact job market a thread below! Share your opinion

Interest rates are not coming down anytime soon

Lawyer

Hello guys,
I would want to know what is the benefit of getting ESOPs in an early stage startup?
The startup has a great team and working on a promising product. 
I have been offered a package with somewhat lower fixed component and somewhat higher ESOPs. Need insightful pointers here. TIA :)

Value of ESOPs in early stage startups?

The ESOP is a bit of a blind bet.  
  
 It's paper money that can get you a windfall if all goes to plan and execution, solution, pricing, market readiness amongst other things, all line up over the next few years.  
  
 I wouldn't take a pay cut in lieu of ESOPs.  Keep the real money real and the paper money as an outside bet.

Sales Manager

Figure out if your startup may get in trouble or not.

Go to the link below 

If yes, go get a confirmation from him of the money 💵 is stuck

https://www.ycombinator.com/blog/urgent-sign-the-petition-now-thousands-of-startups-and-hundreds-of-thousands-of-startup-jobs-are-at-risk below and find if your founder has signed for petition

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