THE FOUNDERS OF INDIAN START-UPS DISTRUST CHINESE INVESTORS AND GIVE PRIORITY TO FOLLOW-UP FINANCING ON THE TERMS OF TERM SHEET CONDITIONS.

The COVID-19 pandemic has emerged as an alarm signal for Indian start-ups. Now they have their own checklist to assess their potential investors. A key requirement is that the investor should not come from China. A recent report by Innoven Capital shows that the ability of an investor to track with more funding was the number one priority for the founders. This appeared to be a more important requirement than the conditions set by the investor in place of the money offered. The pandemic caused several startups to abruptly shut down for months and the liquidity left in their banks suddenly started to shrink. Thus, the founders want to know that the investors on their capitalization table are prepared to pay more money in the event of a crisis.

This year, the capacity to monitor funding has increased and the reason was COVID-19. There was a total market disturbance for at least four to five months. Once the founders go through an event like this, they gain a greater appreciation for having investors who have the ability to sustain , where the outdoor environment is unfavorable. In 2020, major investors including Lightspeed, Sequoia India, Chiratae Ventures, closed their funds during the pandemic. During the pandemic, the bulk of the funding went to companies that are already doing well or are already supported by notable CVs.