Heard it was commom at Lightrock - a European family office fund

Venture Capital

VCs pulling out of funding round after signing TS is getting common, it's best to call them out

Welcome to Indian Startups's Private Community

Which VCs have pulled out from a funding round?

Founder

Which VCs have pulled out from a funding round?- Grapevine

Welcome to News Discussion's Private Community

Which Indian VC investor is a no-go and why? 
Share in person’s name - fund - reason(s) format if possible

Which VCs to avoid

Asking this on behalf of many founders like myself, wanted to collate across multiple inputs: what is it that VCs really want to hear/see from a startup? 

Would love to get inputs from VCs and other founders alike - basis your experience on what has worked what hasn't worked.

The usual suspects: obviously the founder credentials, TAM, insights, metrics. But, what else? 
Look forward to informed answers.

What do VCs really look for in startups? How do they evaluate?

Know a cousin who is a founder. Tells me with experience that VCs in India only operate in FOMO. Unless you tell them another VC is looking to invest in you, they will NEVER invest in you. 

They need fomo to operate 

Only exception is ex CXO founders (high profile), where they know they'll get funded so it's fastest fingers first!!

People should call this out more. What are examples around you where VCs have done something bad to a startup?

Growth And Strategy

Second meeting with the guy, thought his outlook might improve because we had better numbers than the first meeting (few months ago). Didn't even remember the first conversation, or our business, didn't do any research on our startup or industry before the meeting. Kept forcing opinions on me instead of listening, same as the first meeting.

Extremely rude and a waste of time. He said many things no founder should say, that too for another founder.

(Pitching is difficult as is, rejection is common and it's very easy to get demotivated)

When I said I'll share my experience with other founders and startups so they don't engage with that platform, got a reply saying they'll send me a defamation notice if I do, and will also tell other investors in the community that we are doing this startup as a "hobby" and no investor will come onboard.

It's amazing to see the kind of arrogance some people have, especially in the investor and VC network. Would have loved to name and shame him but I have better things to do than to get into petty court cases with assholes. 

Fellow founders, please be very careful and choosy with who you talk to about your startup's fundraise. Indian VC ecosystem is mostly a circlejerk and a shitshow. You're better off raising from friends and family and even individual angel investors than trying to bargain with devils in disguise.

I will most likely stop pitching for investment altogether and focus on growing my profitability than waste time convincing idiots who'd rather throw money on pitch decks without an MVP and startups without PMF, revenue or profitability.

/endrant

Defamation notice threat: Pitching in India

Fuck the defamation notice. Don’t take shit from anyone, if someone crosses their line, reply to them then and there, so that you never think about that again. 
  
 VC and angel market is big in India now. No one has full control of the full ecosystem.  
 This is not Bollywood and there is not Salman khan and Karan Johar. 
  
 Here even fraudsters are getting second chance. Keep building.

Generalist

Kya dikat hai bhai, udane do paisa. Tumhare thodi hai. 

Good firms genuinely perform well and return money. The ecosystem is not forgiving -- you don't survive very long if you don't create any big wins. It's an extremely high stress job with very little WLB. You do make money but it comes at a cost.

Layoffs are sad but at least those jobs existed in the first place? They wouldn't without VC money. India's VC scene is extremely young and it'll take time before we produce a Google. Entrepreneurs are not always right, they are not always nice either; but they definitely are courageous.

Unpopular Opinion: VCs get a lot of crap for no reason

VCs kill many startups with unrealistic targets that the main problem. Not every business is designed to give ultra quick returns VCs want . They ruin well potential startups

Software Engineer

Product Manager

Is there a massive information asymmetry among VCs as well ? What is the level of fluidity in the system when it comes to information sharing ? What is the extent of damage, a few VCs opinion of a startup does to the start-ups fundraising capabilities?

What is the level of collusion among Indian VCs when it comes to passing confidential information as a gossip ?

Investment Banking Associate

I'm hearing some horror stories of pressure and unreasonable expectations coming from VC's even at the seed stage. Pre and post funding. 

Do you folks have stories to share about this. Especially w.r.t. interaction with associates with zero business experience giving Gyan !.

Founders on here....what's the worst VC experience that you've had ?

Why do some startups lay off people even when they know that they'll be raising money soon via new funding?

Case in point: Dunzo

Are these employees given severance? Or is it just that Hi, Hello, Today is your last day, thank you, bye that you see most startups do?

What are your thoughts on this?

Funding and layoffs

Program Manager

Is this behaviour by VCs very common in Indian startup ecosystem? Have heard of more such stories from founder friends

Project Manager

After Unicorns now it's VCs 😁

Any idea whether this happened in India as well for their new entity ?

https://www.forbes.com/sites/kenrickcai/2023/07/24/sequoia-talent-team-layoffs-firm-restructuring/?sh=5d3a78d925f4

Sequoia VC  Layoffs

Growth Manager

How does this app plan to monetize?

VCs have been caught with their pants down in the number fudging scandals and now trying to wash their hands off from it. Impossible to execute without VC blessings. Investigation should be done and strict action taken on rogue VCs.

Finance Consultant

If you have been through the process of raising funding from VCs, whats been your best and worst experiences?

Experience with VCs

A lot of people at Unacademy have already resigned, and they are unable to hire replacements from the market( for who knows what reasons). Now as we all know people who are left in the organisation are going to have a tough time. 

Leaves not being approved, longer hours at work, mental harassment in the name of being available 24*7  is becoming a day to day thing. Now they are forcing people to take up sections of business one has never dealt with and are threatening to fire them if they are denying those roles. 

People who left the organisation in 2022 are the luckiest and well a bunch of well informed individuals who saw the end of this company before anyone else could have. 

What a time to be in edtech, indeed

Major Shakeup at Unacademy

This came out of nowhere. Poor investments? Executive troubles? Both?

Honestly the investing team lacked grit and commitment towards a founder or an investment. In late 2019 they finalised terms with us while an international investor was leading the round, they pulled out last minute because some random fuck company raised 2X the amount of our round from tier 1 vc. Now that company doesn’t exist anymore but I guess neither the fund…me too can never be an investment strategy but sadly this is pretty much how Indian vcs think. We’re still alive and growing 😁

Analyst

-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

So many news of fake or bankrupt investment firms. What pointers do you check/see before accepting the funds?

Which VCs have pulled out from a funding round?

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