Founders are great at selling a fake dream that's how you raise money.

Consultant

They are greedy for disproportionate returns, suffer huge FOMO given the competitiveness in their space

Investor

Founder

Selling your vision > Execution... Sometimes... Plus things like size of untapped market, number of existing players, founder track record, scope of monetisation and recurring revenue..  all forward looking items.... They also matter

Ahem ahem , I know an app like this which has raised money like this (in fact all of you know and use this app)

Software Engineer

Eg. Say a company is making $300 to $400k a year and they were able to raise $5 million.

Welcome to Indian Startups's Private Community

How some companies are able to raise a lot of money when they make peanuts revenue?

How some companies are able to raise a lot of money when they make peanuts revenue?- Grapevine

Can anyone here tell me what exactly went wrong with Dunzo... I was working on a case study related to the same... Would certainly help me a lot

What went wrong with Dunzo?

Product Manager

What is your opinion on a successful startup, is it raising million dollars, is it valuation, is it making profitable. My startup could make 1 lakh per month profit, revenue is around 1.5 lakhs, At this point, I do not understand what to achieve now. I did not raise single rupee. This question raised when I am about to raise 10 lakhs for 20%, This happened very randomly, I’m unsure about my company future. After working on this, the plans when I thought initially faded

As A new founder, what does success mean for a starup?

willl try my best to be honest, ask me anything

AMA - I work at a VC fund

Analyst

https://www.linkedin.com/posts/nishantmittaltt_yesterday-i-posted-an-analysis-on-apna-activity-7136198472654897153-hMwv?utm_source=share&utm_medium=member_ios

Damn. This is serious.

Founder of Apna lives in US, flies first class, has hired his best friends at huge salaries. More in the link below!

This represents the worst of the ecosystem
All of it happened during the peak bull market. Creating a blue collar marketplace made sense in the bull-bharat era. 

The rounds happened in a peculiar way too, most top investors didn't even get the chance to evaluate. It was all too quick. Tiger came in quick succession. 

Ultimately, we're now saying "The VC's were terrible negotiators & left him with 50% board seats so they cannot fire him". Well, of course. 

VCs created the hype. VCs face the brunt.

Investment Associate

Anupam Mittal was shocked to know that the founders of Nasher Miles take 5-7 lakhs per month per founder

Is that alot? What has been y'all experience?

Is 5-7L per month in hand alot?

Principal Software Engineer

𝘄𝗵𝗲𝗻 𝗮 𝘀𝘁𝗮𝗿𝘁𝘂𝗽 𝗿𝗮𝗶𝘀𝗲𝘀 𝗳𝘂𝗻𝗱𝘀, 𝗶𝘁𝘀 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲𝘀 𝘀𝗵𝗼𝘂𝗹𝗱 𝗯𝗲 𝘀𝗰𝗮𝗿𝗲𝗱.

This is just a prediction based on what I've been observing recently. Founder is publishing a lot of self ego boosting articles and aggressively hiring currently.

This has been going on for quite some time and they recently did some layoffs too!

These are some of the early signs when things start to go wrong.

Not sure about their numbers. And even though Indians really love gold it's not an investment. It's a hedge. 

Let's see what happens in the next 12 months.

Prediction - The next startup to fall will be Jar

Currently the authorised capital is 10lakhs, 1lakh shares and share price is 10. 
50% stake is with me and 50% with my friend. 

We are building an app and need to hire some interns, pay some bills. My friends dad has agreed to give us 3 lakhs but wants 5%. 

My understanding was that this would be easy and we can just increase share price from 10 to 60 and issue roughly 5000 shares. 

But CA says that this will require a valuation report to be submitted to the MCA to justify share price increase on books. Is this true? Company has zero assets and liabilities obviously.

How to raise small amount for Private company?

Welcome to Office Gossip's Private Community

Absolutely sad to see the state of the startups, most of them.
I am a founder myself, and this is a post with equal disappointment with myself as much as it is for anyone else who relates.
Look at all these companies that have raised shit tons of capital, and now make a fraction of money that has been invested in them.
The raised money is spent on outsized, non business sense making acquisition costs, only to keep repeating it till the tap runs dry.
Then when all stakeholders get bored, the service quality plummets, the employees are fired and whole sectors are admonished as being bad.

But, my question is, which sector where large sums of money was invested in early days have come out with flying colours. Fucking nothing !
Edtech, proptech, agritech, ecommerce etc. etc. etc. kuch bhi nahi. 

Is there any sector where a startup which has raised in the 100s of millions in the first 5 years have actually built a sustainable business at any scale ?
Then scaling down, isse acha, scale slowly.
The worst part of this whole drama, is pushing the innovation wheel backward and destroying customer sentiment.

Isse acha, raise less money inititally, build slowly, and only scale when the market is ready. Artifical growth makes no sense, unless you have a treasure chest that shall never run out.
Even in that case, spend the money on assets and not on random acquisition costs, direct or indirect.

As founders, let's do better, nahi ?

Rant or is it ?

Today I learned: Kunal Shah only draws a 15K salary 👏🏻

UX/UI Designer

Krutrim has become a unicorn after securing $50m in funding, making it the first Indian AI startup with a valuation of $1bn. It seems like an extremely overvalued company being built yet again. Thoughts?

India's 1st Unicorn in 2024

Are we going back to good golden days of insane salaries. I am really curious on how was the valuation decided. On what basis? Did this platform earned a single penny yet.

Program Manager

How hard is it to build a startup? Krutrim AI raised 50 million.

It's important to remember that Kamath isn't the sole investor in Third Wave. Several other prominent figures/ VC's are involved, and focusing solely on him paints an incomplete picture of the company's ownership.

While Kamath's association with Third Wave is significant, it's important to remember the broader context of the layoffs and avoid attributing sole responsibility to one individual. 

Is being famous a curse in India?

Headline Hyperbole

: Is being famous a curse in India?

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

How it happened?
-wifi turned off
-Slack disabled
-Email disabled

Mojocare laysoff their entire staff of around 200+ people

That's some crazy shit, the CEO reached out to me 3-4 months back on LinkedIn for a Managerial position. Glad that I rejected it.

Customer Success

I’m considering joining as a founding engineer at an early stage startup who is just about to sign a $4M seed round.

They offered to match my current base and a $20,000 in ESOPs. 

When joining at such early stage companies, how should I think of ESOPs so that I can better negotiate. I’m banking on this idea going big and I want to get as much ESOPs as possible to maximise my returns in the future.

ESOPs in early stage startups

Have a fully functional product and have 20 paying customers. What will it take me to raise a first round of 1 to 2 mn.

What will I need to raise $1 -$2Mn as a B2B SaaS startup?

I am just curious. 
How are people becoming a VC or a partner at a Vc firm at very young age? Some of them are not even 25. Where is money coming from??

How some companies are able to raise a lot of money when they make peanuts revenue?

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