I advise founders to only raise venture capital if they can realistically picture ₹100 crore in revenue within the next 5–7 years, because liquidation preferences can erode founder proceeds.
- 1x: investors get their money back first.
If you can’t imagine doing ₹100 crore in revenue in the next 5–7 years, please don’t, for the love of god, raise VC money.
Your “₹40 crore exit” isn’t your ₹40 crore. It’s whatever is left after liquidation preference clears the table.
- 2x: investors get twice their money back first.
- Participating: investors get their multiple first as debt, then share in remaining equity.