Validate the product
Gaurav Goel, Founder & Director at Fynocrat Technologies, said that to reduce such shutdowns, first, it is important to validate the product. Founders should talk to users, take feedback, and check if their product actually solves a problem. Second, going slow is better than going fast and shutting down. One step at a time is the way to go. Growth should come naturally, not forcefully.
He also stressed that founders should build something they really understand. “If you believe in the product and know it well, you are more likely to make the right choices. Also, keeping an eye on the basics, like how much money you spend and how much you earn from each customer, can make all the difference,” he added.
Anirudh A. Damani, Managing Partner, Artha Venture Fund, points out that an analysis of over 10,000 investment rounds since January 2015 indicates a dramatic fluctuation in graduation rates (the transition from Seed to Series A funding).
“Historically, around 1 in 15 start-ups raised a Series A within 18 months, and 1 in 12 within 24 months. However, at the liquidity peak, this rate artificially improved, leading founders to overestimate the ease of securing continued financing. Now, as the market has adjusted, funding conditions are far more stringent,” he said.
Only 1 out of 50 start-ups secures Series A funding within 18 months, and 1 out of 27 within 24 months. Capital-intensive ventures, such as Blip, face unique challenges due to their substantial upfront infrastructure costs, complex regulatory requirements (including GST compliance and licensing), operational complexities, narrow margins, and intense competition, he further said.
What measures should founders and investors take? Mukul Goyal, co-founder of Stratefix Consulting, said for future resilience, founders should build capital-light wedges (community, IP, service revenue) before scaling assets; insist on quarterly scenario-planning, what if funding dries up for 12 months? Institutionalise cash-flow discipline via independent boards.
“Both founders and investors must accept that building sustainable Rs 50-100 crore businesses is more valuable than chasing unicorn valuations,” he added.