15 factors Indian VCs evaluate before issuing a term sheet in 2026, across team, market, product, unit economics and compliance. Self-score before you pitch.
Indian VC capital deployment in 2026 has become more disciplined post the 2023-24 correction, and partners now run deeper diligence before issuing a term sheet. The headline pitch may get you the first meeting, but the yes comes from how well you score on the following 15 dimensions. Treat this as your readiness checklist before reaching out.
Team and Founder Quality
- Founder-market fit: lived experience or deep domain insight into the problem.
- Complementary co-founders covering product, engineering and go-to-market.
- Coachability and the ability to update positions when shown new data.
- Resilience signals from past ventures, jobs or academic pursuits.
Market and Opportunity
- TAM that is large enough in India and reasonable to expand globally, defended with bottom-up math.
- Tailwinds you ride such as Digital India, ONDC, account aggregator framework, GCC growth, or formalisation.
- Clear segmentation showing which sub-market you win first.
Product and Traction
- Working product with weekly active usage data, not just downloads.
- Cohort retention curves that flatten rather than decay to zero by month 6.
- Clear differentiation versus the two closest Indian and global competitors.
Business Model and Unit Economics
- Contribution margin positive at the unit level with a credible path to 50 percent gross margin for SaaS or 25-30 percent for consumer.
- CAC payback within 12-18 months for SaaS and within one transaction or two for D2C.
- Revenue concentration that does not exceed 25 percent from any single customer.
Compliance and Governance
- DPIIT recognition, clean ROC filings, GST compliance and a Rule 11UA valuation file ready.
- Cap table without dead equity, with documented vesting on all founder shares.
How VCs Score These
Most partners use an internal scoring grid weighted toward team and market, but the deal-killer is usually compliance hygiene. Years of clean ROC and GST filings shave weeks off due diligence. Conversely, an unresolved Section 56(2)(viib) scrutiny notice can scuttle an otherwise great deal.
Conclusion
Investors are pattern matchers backed by analysts who triangulate. Score yourself honestly on these 15 points, fix the bottom four before your fundraise, and you will not only get more term sheets but also negotiate better valuations from a position of strength.
