8 min read · By Viren Makwana
Most fundraises that fail do so before the first investor meeting. The business is not ready, the numbers do not tie together, or the founders approach the wrong investors. A well-run raise for an Indian private company typically takes four to nine months, and the first two are spent on preparation.
Here is the process we follow, stage by stage.
1. Decide what you need and why
Start with the use of funds, not the amount. List what the money will buy, when, and what milestone it gets you to. Then decide the type of capital: equity, debt, or a mix (see Debt vs equity financing). Add a buffer of six to nine months of runway, because raises take longer than planned.
2. Get investor-ready
Investors back businesses they can understand and verify. Before approaching anyone, make sure you have:
- Audited financials for the last two to three years and current management accounts.
- A clean cap table and a corporate secretarial record without gaps.
- Key contracts, licences, IP ownership and any litigation documented.
- A clear view of unit economics: what it costs to acquire and serve a customer, and what you earn from one.
3. Build the model and the story
The financial model is the backbone. It should show three to five years of projections built from real drivers such as customers, prices, capacity and costs, with a base case and a downside. The story has to match the model line for line.
The core materials are:
- Teaser: one to two pages, shareable without an NDA.
- Pitch deck or information memorandum: the full case, shared under NDA.
- Data room: the documents investors will diligence, organised before you need them.
4. Target the right investors
A list of 40–80 well-matched investors beats a list of 400 random ones. Match on stage, sector, ticket size and type: venture funds, private equity, family offices, HNIs, strategic investors or credit funds. Warm introductions convert far better than cold outreach, so map who in your network knows each target.
5. Run a tight process
Approach investors in a short window so conversations move in parallel. Staggered outreach lets the first investor set the pace and the price. Track every contact, meeting and follow-up, and keep the momentum with regular updates.
6. From term sheet to due diligence
A term sheet sets out valuation, the instrument, board rights, investor protections and conditions. Negotiate the terms that matter most for the long run: control rights, liquidation preference and anti-dilution often matter more than a few points of valuation.
Due diligence follows across financial, tax, legal and commercial areas. It usually takes four to eight weeks, and a prepared data room shortens it.
7. Close and comply
The definitive documents are the share subscription agreement and the shareholders’ agreement, followed by amended articles of association. In India, closing also involves a valuation report, private placement or preferential allotment approvals under the Companies Act, regulatory filings with the Registrar of Companies, and FEMA reporting if the investor is foreign. Your company secretary and lawyers will run this, but plan for it in the timetable.
8. After the money lands
The raise is the start of an investor relationship, not the end. Send clear quarterly updates, hold board meetings on schedule and report bad news early. Your current investors are the most likely source of your next round, and of introductions to new ones.
Common mistakes
- Starting with three months of cash left, which weakens every negotiation.
- A model that does not reconcile to past financials.
- Pitching investors whose fund size or stage does not fit.
- Negotiating valuation hard and ignoring control terms.
- Letting the business slip while the founders are busy fundraising.
A fundraise rewards preparation. The founders who close on good terms are usually the ones who did the unglamorous work first.
This article is for general information only and is not investment, legal or tax advice, or an offer or solicitation to buy or sell any security or fund units. Figures are drawn from public sources as of the date shown and may change. Speak to a qualified adviser before making any investment decision.