๐จ The magic number: โน800 Cr โธป VCs invest in businesses that can be big enough to return their entire fund. To get VCs interested, your startup must at least have the potential to reach โน800 Cr+ in annual revenue or โน8,000 Cr+ in market cap (assuming a 10x multiple). Donโt worry if it will take time to get there. They account for that. โธป ๐ก The Simple Formula: A ร B ร C โฅ โน800 Cr Where: A = How many things you can sell (market size or customer base) B = How much you sell it for (price per unit) C = Your gross margin (profit after direct costs) โธป โ Example 1: B2B SaaS for Labs Youโre building software for diagnostic labs: A = 10,000 labs B = โน1,00,000 per year (โน8,300/month) C = 85% gross margin ๐ 10,000 ร โน1,00,000 ร 0.85 = โน850 Cr โ VC-fundable: Big market, recurring revenue, high margin. โธป โ Example 2: Boutique Coffee Chain Youโre opening premium cafes in Indian metros: A = 50 outlets B = โน300 average bill - Customers/day = 1000 - Annual Revenue = โน10.9 Cr per outlet โ โน547.5 Cr total C = 30% margin ๐ โน547.5 Cr ร 0.3 = โน164.2 Cr โ Not VC-fundable: Great business, but not scalable enough for VC. โธป โ Example 3: Molecular Diagnostics Youโre building a rapid sequencing diagnostics platform: A = 5,000 clinics B = โน8,300 per test - Tests/year = 1,000 per clinic C = 60% margin ๐ 5,000 ร 1,000 ร โน8,300 ร 0.6 = โน2,490 Cr โ Highly VC-fundable: High TAM, strong margins, scalable diagnostics. โธป ๐ง TL;DR for Founders Before chasing VC money, ask: ๐ Can this idea become a โน1,000 Cr+ business? ๐ Do my unit economics work at scale? โ๏ธ Am I swinging big enough? If youโre under that bar โ just pick the right funding model: ๐ธ Angel, ๐ผ PE, ๐งช Grants, or ๐ ๏ธ Bootstrapping. โธป Run the math on your startup idea๐
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