First Venture
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The VC Funding Winter: Karnataka's Startup Ecosystem in Crisis
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May 13, 2025 at 2:31 PM
Here is our Daily Newsletter | Blog :)
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To see why history might repeat itself (and why it needs to), check out my full piece. Link in comment
May 13, 2025 at 2:31 PM
To see why history might repeat itself (and why it needs to), check out my full piece. Link in comment
The current approach threatens to create "haves and have-nots" in our innovation economy, with promising solutions to critical problems left unfunded simply because they don't fit the trending narrative.
May 13, 2025 at 2:31 PM
The current approach threatens to create "haves and have-nots" in our innovation economy, with promising solutions to critical problems left unfunded simply because they don't fit the trending narrative.
We need a movement for more equitable capital distribution across sectors and geographies.
May 13, 2025 at 2:31 PM
We need a movement for more equitable capital distribution across sectors and geographies.
With capital now flowing overwhelmingly to just three sectors—enterprise applications ($298.6M), fintech ($221.1M), and retail ($219.8M)—we're creating dangerous innovation deserts in other critical areas.
May 13, 2025 at 2:31 PM
With capital now flowing overwhelmingly to just three sectors—enterprise applications ($298.6M), fintech ($221.1M), and retail ($219.8M)—we're creating dangerous innovation deserts in other critical areas.
While late-stage funding plummeted 48% QoQ, seed stage dropped only 14%, revealing a new quality-over-quantity approach that simply didn't exist during previous downturns.
May 13, 2025 at 2:31 PM
While late-stage funding plummeted 48% QoQ, seed stage dropped only 14%, revealing a new quality-over-quantity approach that simply didn't exist during previous downturns.
This dramatic transformation didn't happen organically. It required a complete rethinking of what "value" means in the venture ecosystem.
May 13, 2025 at 2:31 PM
This dramatic transformation didn't happen organically. It required a complete rethinking of what "value" means in the venture ecosystem.
Just 1 year ago, Karnataka startups raised a booming $1.2 billion in Q1 2024. Now it's crashed to just $633 million—a staggering 47% drop that signals a fundamental shift, not a temporary blip.
May 13, 2025 at 2:31 PM
Just 1 year ago, Karnataka startups raised a booming $1.2 billion in Q1 2024. Now it's crashed to just $633 million—a staggering 47% drop that signals a fundamental shift, not a temporary blip.
What specific expertise would be most valuable from investors in your startup's domain?
May 12, 2025 at 2:30 PM
What specific expertise would be most valuable from investors in your startup's domain?
- Use their validation to secure better terms from larger follow-on investors
- Create strategic board compositions that combine sector expertise with broader networks
- Create strategic board compositions that combine sector expertise with broader networks
May 12, 2025 at 2:30 PM
- Use their validation to secure better terms from larger follow-on investors
- Create strategic board compositions that combine sector expertise with broader networks
- Create strategic board compositions that combine sector expertise with broader networks
- Interview their portfolio founders about tactical help provided beyond capital
- An enterprise SaaS founder who selected investors this way reduced their sales cycle by 40% through investor-led introductions
2. The "Expert Capital" Leverage Strategy
- An enterprise SaaS founder who selected investors this way reduced their sales cycle by 40% through investor-led introductions
2. The "Expert Capital" Leverage Strategy
May 12, 2025 at 2:30 PM
- Interview their portfolio founders about tactical help provided beyond capital
- An enterprise SaaS founder who selected investors this way reduced their sales cycle by 40% through investor-led introductions
2. The "Expert Capital" Leverage Strategy
- An enterprise SaaS founder who selected investors this way reduced their sales cycle by 40% through investor-led introductions
2. The "Expert Capital" Leverage Strategy
1. The Investor Selection Framework
- Prioritize investors with direct operating experience in your specific vertical
- Evaluate their portfolio for strategic coherence rather than logos or size
- Prioritize investors with direct operating experience in your specific vertical
- Evaluate their portfolio for strategic coherence rather than logos or size
May 12, 2025 at 2:30 PM
1. The Investor Selection Framework
- Prioritize investors with direct operating experience in your specific vertical
- Evaluate their portfolio for strategic coherence rather than logos or size
- Prioritize investors with direct operating experience in your specific vertical
- Evaluate their portfolio for strategic coherence rather than logos or size
- Later-stage funds increasingly view investment from respected specialized VCs as quality validation
- A hardware startup with a specialized investor's backing received 5 term sheets for their Series A despite challenging market conditions
- A hardware startup with a specialized investor's backing received 5 term sheets for their Series A despite challenging market conditions
May 12, 2025 at 2:30 PM
- Later-stage funds increasingly view investment from respected specialized VCs as quality validation
- A hardware startup with a specialized investor's backing received 5 term sheets for their Series A despite challenging market conditions
- A hardware startup with a specialized investor's backing received 5 term sheets for their Series A despite challenging market conditions
5. The Follow-On Funding Advantage
- Companies backed by specialized micro VCs raise follow-on rounds at a 68% higher success rate
- Companies backed by specialized micro VCs raise follow-on rounds at a 68% higher success rate
May 12, 2025 at 2:30 PM
5. The Follow-On Funding Advantage
- Companies backed by specialized micro VCs raise follow-on rounds at a 68% higher success rate
- Companies backed by specialized micro VCs raise follow-on rounds at a 68% higher success rate
- Specialized micro VCs report that 42% of their portfolio companies secure customer relationships directly through their networks
May 12, 2025 at 2:30 PM
- Specialized micro VCs report that 42% of their portfolio companies secure customer relationships directly through their networks
- Domain-specific VCs provide targeted introductions to customers, partners, and follow-on investors
May 12, 2025 at 2:30 PM
- Domain-specific VCs provide targeted introductions to customers, partners, and follow-on investors
- A healthcare AI startup took a 15% lower valuation to work with a specialized micro VC, crediting their guidance for a successful pivot that led to a 4x higher Series A
4. The Post-Investment Value Acceleration
4. The Post-Investment Value Acceleration
May 12, 2025 at 2:30 PM
- A healthcare AI startup took a 15% lower valuation to work with a specialized micro VC, crediting their guidance for a successful pivot that led to a 4x higher Series A
4. The Post-Investment Value Acceleration
4. The Post-Investment Value Acceleration
- 73% of founders report valuing strategic expertise over check size in early rounds
- Specialized investors can help founders avoid costly mistakes that even extra capital can't fix
- Specialized investors can help founders avoid costly mistakes that even extra capital can't fix
May 12, 2025 at 2:30 PM
- 73% of founders report valuing strategic expertise over check size in early rounds
- Specialized investors can help founders avoid costly mistakes that even extra capital can't fix
- Specialized investors can help founders avoid costly mistakes that even extra capital can't fix
- A deep tech micro VC reduced their investment timeline from first meeting to term sheet by 47% while improving selection quality
3. The Founder Preference Shift
- The best founders are increasingly choosing specialized investors over larger funds offering higher valuations
3. The Founder Preference Shift
- The best founders are increasingly choosing specialized investors over larger funds offering higher valuations
May 12, 2025 at 2:30 PM
- A deep tech micro VC reduced their investment timeline from first meeting to term sheet by 47% while improving selection quality
3. The Founder Preference Shift
- The best founders are increasingly choosing specialized investors over larger funds offering higher valuations
3. The Founder Preference Shift
- The best founders are increasingly choosing specialized investors over larger funds offering higher valuations
- A specialized fintech micro VC saw 68% of their deals come through warm introductions from portfolio founders or industry operators
2. The Due Diligence Depth Difference
- Domain experts can evaluate technical risk and market timing with vastly greater precision
2. The Due Diligence Depth Difference
- Domain experts can evaluate technical risk and market timing with vastly greater precision
May 12, 2025 at 2:30 PM
- A specialized fintech micro VC saw 68% of their deals come through warm introductions from portfolio founders or industry operators
2. The Due Diligence Depth Difference
- Domain experts can evaluate technical risk and market timing with vastly greater precision
2. The Due Diligence Depth Difference
- Domain experts can evaluate technical risk and market timing with vastly greater precision
- Their domain networks surface opportunities that never reach open funding markets
- Funds focused on climate tech, deep tech, and healthcare report 3.4x higher quality deal flow than generalists
- Funds focused on climate tech, deep tech, and healthcare report 3.4x higher quality deal flow than generalists
May 12, 2025 at 2:30 PM
- Their domain networks surface opportunities that never reach open funding markets
- Funds focused on climate tech, deep tech, and healthcare report 3.4x higher quality deal flow than generalists
- Funds focused on climate tech, deep tech, and healthcare report 3.4x higher quality deal flow than generalists
Here's why domain expertise is trumping capital scale in today's venture landscape:
1. The Knowledge Advantage in Deal Sourcing
- Specialized micro VCs identify promising startups 7-10 months before they appear on generalist radars
1. The Knowledge Advantage in Deal Sourcing
- Specialized micro VCs identify promising startups 7-10 months before they appear on generalist radars
May 12, 2025 at 2:30 PM
Here's why domain expertise is trumping capital scale in today's venture landscape:
1. The Knowledge Advantage in Deal Sourcing
- Specialized micro VCs identify promising startups 7-10 months before they appear on generalist radars
1. The Knowledge Advantage in Deal Sourcing
- Specialized micro VCs identify promising startups 7-10 months before they appear on generalist radars
May 12, 2025 at 7:30 AM