Core concepts
- 01Funding stages: bootstrapping → angel → seed → Series A/B/C → IPO/exit.
- 02Valuation methods: DCF (FCFF/FCFE), relative valuation, asset-based, real options.
- 03Pre-money & post-money valuation differ by investment amount.
- 04Convertible instruments: SAFE, CCD, optionally convertible debenture.
- 05Exit options: IPO, strategic sale, secondary, buy-back.
Flowchart
Startup Funding Stages Idea -> Bootstrap -> Angel -> Seed -> Series A -> B -> C -> IPO/M&A | Valuation Methods | DCF | Comparables | Berkus | Risk-Adjusted (Scorecard) | Venture Capital Method
Exam-critical pointers
- ⭐DCF unsuitable for early-stage startups (no stable cash flows) — use scorecard / VC method.
- ⭐Down-round protections: anti-dilution (broad-based weighted average is common in India).
- ⭐DPIIT recognised startups — Sec 80-IAC tax holiday (3 of 10 consecutive years).
- ⭐SEBI ICDR allows IPO with profitability OR alternative compliance route.
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