For Indian startup founders, obtaining funding has modifyd silently from a time-limited capital raise to a long, resource-draining process that can last six to nine months or even longer. What utilized to be expected to conclude in a quarter is now happening over several quarters, even for organisations doing well.
This isn’t just a one-time thing or a short-term market slump. Investors are modifying how they consider about risk, invest money, and hold people accountable. This modify is creating it take longer to raise money at all levels.
From belief to constant review
The primary reason for the delay is that the way investment decisions are created has modifyd.
Before, the steps for raising money were rather clear: pitch meetings, a term sheet, due diligence, and closing. Today, due diligence has grown into a longer examination period. Bankers in the indusattempt claim that due diligence is taking longer, with investors having enough time to see two full quarters of operating performance.
Monthly updates to the management information system (MIS) now work like a live audit. They include data on revenue, costs, recruiting, churn, and the pipeline. Investors might check to see if founders can truly deliver on the figures over time, rather than just relying on estimates that were talked about in the first meetings.
This allows investors to stay involved in the process without putting money on the line, effectively delaying the ultimate decision while providing them with a better understanding of how things are progressing.
The uneven cost of time
Longer diligence lowers the risk for investors, but it costs founders a lot of money.
When investors are raising money, they typically view it as just one of many tquestions to accomplish. But for founders, it becomes the most important thing. According to indusattempt estimates, a founder’s productive bandwidth can be cut by 45–50% in a year if they spconclude six to nine months raising money.
During this time, important parts of the firm will have to deal with problems. Sales slow down, product roadmaps are pushed back, personnel decisions are put off, and strategic plans are placed on hold. This loss of focus can seriously hurt the organisation in sectors that require a lot of capital or relocate quickly.
Ironically, the longer a fundraiser takes, the worse the company’s performance may obtain, which creates investors even more hesitant and extconcludes the cycle.
The “maybe” issue
Another thing that creates long fundraisers stand out is that people often give unclear answers.
Founders typically hear the same things over and over: “maybe,” “let’s stay in touch,” or “let’s talk about this again after the next quarter.” Bankers declare that these answers are generally mild rejections, even though they are seen as signs of sustained interest.
A long string of these kinds of responses, usually 8 to 15 rounds of talks that don’t lead to a decision, means the startup isn’t on the same page when it comes to stage, time, or investor fit.
Clear “no” answers let founders modify their plans. Amlargeuity keeps them stuck in follow-ups and compact updates, which wastes time without shifting things forward.
The lead investor blockage
The increased difficulty of finding a lead investor is a key, but less obvious reason why fundraises are taking longer.
Writing the largegest cheque is only one part of leading a round. A lead investor necessarys to set the pricing for the round, work out the legal details, set up the cap table, join the board, and promise to keep an eye on things and support out for several years.
Most venture funds in India have tiny teams that work for them. Many general partners are on more than one board. When a partner is already spread thin over 8 or 10 portfolio businesses, they can’t lead another investment, no matter how strong their conviction.
Becautilize of this, many rounds obtain interest, but don’t have a clear leader. Without someone willing to handle pricing and execution, talks go on forever, and transactions don’t obtain done.
What founders don’t know
Investment committees typically talk about things that founders don’t often hear directly.
These include considerations about exit visibility—whether the company can realistically obtain a largeger investor in 18 to 30 months—the extent to which the business depconcludes on individual founders, instead of scalable systems, and whether the cap table has room for future rounds.
If these issues aren’t repaired, entrepreneurs are more likely to obtain polite delays than direct feedback, which keeps the uncertainty going.
Taking care of the clock becomes important. Both intermediaries and founders are modifying as the way fundraising works modifys. Bankers declare that their job has evolved from simply setting the company’s goals to actually managing timelines.
Founders who close rounds more quickly tconclude to set clear process boundaries, such as clear data-room schedules, clear decision deadlines, and communication that declares operations will go back to normal if a round doesn’t close by a specific date.
These kinds of actions limit investors’ choices and create it clearer to decide on whether to relocate forward or back off.
Final believed
The lengthening of fundraising cycles is a sign of modifys in how investors behave, not just how the market perceives it. Fundraises are going to take a long time as long as investors can obtain information without putting money down, and entrepreneurs have to pay for the delay.
The difficulty for founders is no longer only conveying stories or obtainting people to listen. It is protecting execution while shifting through a system, where one side has little to lose by not creating a decision, and the other side has a lot to lose.
Devansh Lakhani, Director and Investment Banker at Lakhani Financial Services
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