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VC Funding: Valuation & Return Multiples at Each Stage

Unitus Ventures has put up some interesting data and charts on the typical capital invested, valuation and equity dilution that startups - especially impact focused ones - witness in the Indian context (including at the time of exit).


 In the lowest-case $20M exit, founders plus employees are making a little over $1M, while financial investors are making a tiny multiple or losing money. At the rather optimistic exit valuation of $60M, founders plus employees take home nearly $11M, and each series of investors make a fine total return, achieving overall objectives.

..life is pretty good for pre-seed investors in any exit on this chart, and they make 19-52x return between $30M and $60M. Seed investors...don’t make a ~10x return in this model until a $60M exit is achieved.  Series A investors who have a similar risk profile and return potential only see a 5x return at $60M exit.

...There have been very few examples of venture-funded businesses achieving over $50M exit valuations in India. The only “impact business” exit over $50m has been the SKS Microfinance which did an IPO in 2010.

...taking money from a less-sophisticated investor at a higher valuation will NOT help you (entrepreneurs) succeed. Doing so will all too often lead to a painful reality-based reset and “down round” which can demoralize and potentially kill your company.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

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