ASYMMETRIC Road to IPO for VC-backed Startups with Kashyap Chanchani (Managing Partner, TRMG)
Apr 18, 2025
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Startups Valued on Forward EBITDA
- Indian startups' public valuations reflect growth more than past profitability and are benchmarked mostly on 2-year forward EBITDA multiples.
- Familiarity with the sector, proven management, and growth prospects significantly influence valuation premiums and discounts.
Founders Must Adapt for IPO Success
- Founders should shift their mindset before going public to focus on consistency, capital efficiency, and governance.
- Maintain at least 20% growth for five years to sustain valuations and leave upside for future investors.
Public Vs Private Valuation Dynamics
- Public market valuations are consensus-driven and fluctuate daily unlike private markets where valuation is decided by the highest bidder.
- This requires founders and investors to accept a different pricing dynamic post-IPO with more liquidity and volatility.