India, May 4 -- In India's startup ecosystem today, it's not uncommon to find a company with no product, no revenue-but a INR 100 Cr valuation. That's not ambition-that's a structural risk we're normalising. But are we setting serious founders up for success by doing this, or are we making it harder for them to justify their worth in later rounds?

As per a report 2024, nearly 20% of Indian startups that raised large rounds in 2023 have faced down rounds or flat rounds after failing to meet their projected traction.

This trend reflects a deeper issue in India's venture capital ecosystem, where pre-seed and seed stage valuations are surging sharply-often disconnected from a startup's current operational reality. Many early-stage companies...