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.
