Venture Capital

Venture capital (VC) is a form of private equity funding where firms raise money from institutional investors (called Limited Partners or LPs) and deploy it into high-growth startups in exchange for equity ownership. Unlike angels, VCs manage other people's money and are accountable to their LPs for returns.

VC firms have a fixed fund life (typically 10 years) and must return capital to LPs within that window. This creates real pressure to find companies that can generate 10x+ returns — a single investment must potentially return the entire fund. This is why VCs pass on most companies: even good businesses with modest exits don't work for the venture math.

VC investment stages: seed (₹50 lakh–₹5 crore), Series A (₹15–100 crore), Series B (₹50–300 crore), Series C and beyond (₹200 crore+).

India's VC ecosystem is dominated by a handful of top-tier firms: Peak XV Partners (formerly Sequoia India), Accel India, Elevation Capital, Lightspeed India, Nexus Venture Partners, and Matrix Partners India. Below them is a growing tier of emerging managers with ₹200–500 crore funds.

Indian VCs are increasingly stage-specific. Most institutional VCs won't write cheques below ₹5 crore — they need meaningful ownership to justify the time. Pre-seed rounds (₹25 lakh–₹2 crore) are almost exclusively angel/angel network territory. The seed-to-Series A gap is where most Indian startups struggle.