Enough and more being said about the liquidity in the market. It’s raining capital across stages for startups in India. How are investors and startups likely to respond? Some thoughts below

1/n: There is a vintage factor. There are startups who raised before the frenzy began and are now wondering if they got the short end of the stick – they raised less capital for the same dilution. Many might consider top-ups

2/n: Many from this vintage will chase growth harder to establish market leadership and raise their next round sooner than planned

3/n: Investors that are fundamentalists will look for these hidden gems (). Older cohorts that find themselves in a “less hot” market may feel the pressure temporarily – hiring may seem difficult. CaCs may rise. But capital will eventually flow to them as well

4/n: Market has caught all early-stage investors off guard. Not all were ready for these ticket sizes. As a result, there will be more co-led seed and Series A rounds. Follow-on rounds will also happen sooner. Investors will take more risk to come in sooner than later.

5/n: There will be significantly more people starting up. Most early-stage investors will invest earlier than before. As a result, several founders with past execution records will be able to raise capital even before launching their MVP. PS: DM me

6/n: Series A/B will be smoother – there is enough liquidity. Armed with significantly more capital, startups will get more do-overs at early stage. Rightly or wrongly, tougher business questions will get pushed to Series C and beyond.

7/n: There will be a significantly greater scramble for market leadership. The funding gap between the leader and the second player will be large. Most capital will consolidate with the leader

8/n: Over capitalization of your competition will be a real risk. Better run companies if not well capitalized may lose out. Founders may go from “always hiring” to now also “always raising capital”

9/n: Bonus points for founders and investors who can control their emotions at a time like this. Keep your head down. Play the game. But know your truth. Nothing matters more than solving your customer’s problems better than anyone else.

10/n: What else do you feel could change? Add to the thread..