Founder
Pulse
What it means to be an entrepreneur in 2023
The past five years have been the most dynamic and volatile phase for the startup ecosystem in India that we have seen in our 20+ years of backing early-stage founders in the country. Our daily interactions with founders reveal one consistent theme - uncertainty and confusion. About where the Indian startup ecosystem is headed, the funding environment, the talent outlook - just to name a few. Founders are deluged with a multitude of contrasting signals and information.
Through 'Elevation Founder Pulse’, we have harnessed our deep reach within the founder community to try and answer some big questions shaping their world. What are they excited about? What keeps them awake at night? Fundamentally, this report strives to decipher the essence of what it means to be an entrepreneur in 2023. We hope it will be of value to founders, operators, and just about anyone with an interest in the startup ecosystem.
250+ founders took our survey
The inaugural edition of the Elevation Founder Pulse is fueled by insights from our survey of 250+ founders across various stages and sectors that captured over 20,000 data points. We received rich responses on aspects ranging from the fundraising landscape, business outlook, and operational challenges to public market dynamics, recruitment and culture, and the regulatory environment.
250+ founders took our survey
The inaugural edition of the Elevation Founder Pulse is fueled by insights from our survey of 250+ founders across various stages and sectors that captured over 20,000 data points. We received rich responses on aspects ranging from the fundraising landscape, business outlook, and operational challenges to public market dynamics, recruitment and culture, and the regulatory environment.
Founder representation across sectors
What are they telling us?
No better time than now to build in India
An overwhelming majority of founders agree: NOW is the ideal time to build in India.
8 out of 10 founders would choose to start up today
Q: Is this a good time to start a business?
Amid the overall positive sentiment, late-stage founders sound a note of caution. 17% of growth and late-stage founders find the current funding climate to be challenging compared to just 5.8% founders in the early stages.
Early-stage sentiment:
Raised <$25M
VS
Growth & late-stage sentiment:
Raised >$25M
Winter persists. But founders see a funding spring on the horizon.
The venture funding landscape in India has experienced a marked pullback since 2022. A significant 70% of the founders acknowledge the heightened difficulty in securing funds at this time.
Yet, there's a budding sense of optimism:
Half of the founders are hopeful for a warmer funding season in the next 12 months.
50% of founders see fundraising becoming easier over the next year
Q: How will the venture funding landscape look for your industry in the next 12 months?
Over half the respondents (55%) believe that a runway of at least 18 months is ideal, however, one in three founders (33.5%) we surveyed is currently operating with a runway of less than 12 months.
1 in 2 founders believe having at least 18 months of runway is ideal
Q: What should be the ideal runway for startups in your sector?
Revenue growth concerns keep most founders up at night
The ball is back in employers’
court as talent landscape resets
Over 50% founders say tech salaries have cooled down
All indicators suggest that after two years of talent largely holding the upper hand, employers are beginning to see the balance of power appearing to shift back in their favour.
Founders are seeing signs of improvement in tech hiring, with 50% of them noting that tech salaries have cooled down compared to last year. Early-stage startups are finding themselves having to pay more to attract tech talent compared to their growth-stage peers.
Q: Has tech talent recruitment become easier or difficult for you this year?
Only 7% founders report an increase in voluntary attrition
Employees are increasingly choosing to stay with their current employers for longer periods, indicating a trend of improved retention in the workplace. Just 7% of founders report an increase in voluntary attrition. Nearly half (48%) state that voluntary attrition rates have remained consistent with the previous year, while 46% observe an improvement in their retention metrics.
Q: What’s the change in voluntary attrition at your company in the last year?
Fully-remote work setup is going away
Only 5% of founders support a fully remote arrangement
Less than 5% founders now support a fully remote arrangement. Half of the founders we surveyed advocate for a fully on-site work environment, and the remaining 45% prefer a hybrid model.
Q: Which work setup helps your company thrive?
Among those preferring an on-site setup, an overwhelming 90% of founders were able to execute a smooth back-to-office transition.
Transition to a fully on-site setup was smooth for most founders
Q: How has the transition to a fully on-site setup been for you?
The Elevation Startup PayPulse Report 2023 encapsulates valuable insights on compensation and talent trends to help founders make informed people decisions. You can download the report here.
Founders have profitability firmly in their sights
Majority of founders are aiming for profitability
Founders navigating this winter are embracing the winds of profitability, trimming their sails to cut costs.
The majority of founders (58%) we surveyed aspire to be profitable in the near to medium term while 18% state they have already reached this milestone.
Founders expect liquidity events to surge
Founders are viewing the IPO landscape in India for venture-funded startups with renewed optimism even after the boom witnessed in 2021.
66% founders believe that there will be more IPOs of venture-funded startups in the next 5 years compared to the previous five, with the optimism ringing even louder (75%) among late-stage founders.
Optimism about listing momentum remains positive
Q: Do you think that there will be more or fewer IPOs of venture-funded startups in the next five years compared to the last five years?
Sectorally, BFSI founders expressed the highest level of conviction, with an impressive 95% believing that M&A activity will increase. Additionally, 78% of Consumer founders and 75% of B2B & SaaS founders also share this positive outlook.
B2B+SaaS
Consumer
BFSI
In Hindsight
Lastly, we asked founders to look back and identify what they would do differently if starting up again today. Perhaps influenced by the current challenging conditions, their reflections on how they would approach building their startup differently centered on business fundamentals. Shaped by their entrepreneurial experiences, founders highlighted four key areas:
- Prioritizing profitability earlier
- Placing greater emphasis on customer feedback and iteration
- Allocating more time to product development before launch
- Bootstrapping for a longer period before seeking investment
We at Elevation believe that founder confidence in India is underpinned by its strong fundamentals.
Rapid progress on physical infra
Manufacturing beginning to fire
All In On India!
Founders across the board are united in their belief that there is no better time to build in India than now – a sentiment we couldn’t agree more with. The confidence in the India story and our economic fundamentals have never been stronger. Founders, young and old, are emerging from this winter battle-hardened and smarter, resilient and wiser, having learnt the right lessons in a challenging environment. From funding and talent acquisition to exits, we see, as do founders, unmistakable signs of positive change. There is no better time than now to be All In on India!