In May 2023, the Ministry of Corporate Affairs launched C-PACE — a compliance enforcement initiative. Within months, 38,658 Indian companies were struck off the register. Most of them were startups and small businesses.
The founders didn't plan to fail. They just stopped filing.
The MCA strikes off companies that fail to file annual returns (MGT-7) and financial statements (AOC-4) for two consecutive years. The process is automated now — there's no warning letter, no second chance.
Here's the timeline that kills most startups:
The penalty isn't just legal. A struck-off company can't raise funding, open bank accounts, sign contracts, or hire employees. It's effectively dead — even if the product is live and generating revenue.
Beyond MCA filings, GST compliance is the biggest operational killer for Indian startups. GSTR-3B must be filed monthly. GSTR-1 quarterly. Miss one and you're paying ₹50/day in late fees, minimum. Miss two and your GST registration gets suspended.
A suspended GST number means you can't invoice customers legally. For a B2B SaaS startup, that's instant death.
The simplest answer: build a compliance calendar based on your founding date and set reminders 7 days before every deadline. Most companies that get struck off simply didn't have a system.
Compyte auto-generates your compliance calendar the moment you enter your founding date. Every filing is tracked, every deadline is flagged, and penalties are calculated live so you know exactly what's at stake.
Compyte auto-generates your GST, TDS, and ROC compliance calendar from your founding date.
38% of Indian startups fail from cash flow mismanagement. Not from bad products. Not from bad markets. From not knowing three numbers.
Here's everything you need to know, explained without jargon.
Burn rate is how much money you spend every month. Simple. But most founders confuse gross burn with net burn.
Example: If you spend ₹30L/month and earn ₹12L/month in MRR, your net burn is ₹18L/month. That's the number that matters.
Most Indian founders only track gross burn. This leads them to think they have more runway than they do.
Runway is how many months until you run out of money. The formula is simple:
Runway = Cash in Bank ÷ Net Monthly Burn
If you have ₹1.8Cr in the bank and your net burn is ₹18L/month, you have exactly 10 months of runway.
The key insight: start fundraising when you have 6+ months of runway left. Most founders wait until they have 3 months left. By then it's too late — a Series A process takes 3-6 months minimum.
Cash flow is different from revenue. You can have ₹50L in invoices outstanding and still run out of cash if customers haven't paid yet.
For Indian B2B startups specifically, payment terms are brutal. Enterprise customers often pay net-60 or net-90. If your burn is ₹15L/month and you're waiting 90 days for a ₹45L invoice to clear — you could run out of cash even with strong revenue.
When a VC asks "what's your runway?" they're actually asking: "how much time do you have to prove your business model before you need more money?"
The answer they want to hear is 18-24 months. Anything less and you're fundraising out of desperation, not strength.
Compyte tracks your runway, burn rate, and cash flow automatically — updated every time you add data.
VCs see hundreds of decks every month. They reject 97% of them in the first meeting. The ones that make it to a second meeting have one thing in common: the founders know their numbers cold.
Here's the framework VCs actually use to evaluate Indian B2B SaaS startups at Series A.
Series A benchmark: 15-25% month-over-month for at least 6 consecutive months.
This is the single most important metric. Consistent growth over time proves product-market fit better than any pitch deck slide.
Series A benchmark: 100-110% NRR.
NRR above 100% means your existing customers are paying you more over time — through upgrades and expansion. This is the strongest signal that your product has real value.
NRR formula: (Starting MRR + Expansion - Churn - Downgrades) ÷ Starting MRR × 100
Series A benchmark: 3x or higher.
If it costs you ₹10,000 to acquire a customer and they pay you ₹30,000 over their lifetime — your LTV:CAC is 3x. Below 3x means your unit economics don't work at scale.
Series A benchmark: 70-80% for SaaS.
Gross margin = (Revenue - Cost of Revenue) ÷ Revenue. For SaaS, cost of revenue is primarily cloud infrastructure and customer support. If your gross margin is below 60%, VCs will question whether the business can ever be profitable.
Series A benchmark: 18+ months at current burn.
Walking into a Series A with less than 12 months of runway signals desperation. VCs know you're negotiating from weakness and will price accordingly.
This is the one Indian founders consistently underestimate. Every serious VC does due diligence on GST filings, MCA compliance, and TDS returns before signing a term sheet. One missed filing can kill a deal in the final stage.
Rate yourself on each metric from 0-100, multiply by the weight, and sum up. A score above 75 means you're ready for serious Series A conversations. Below 60 means you need to fix the fundamentals first.
Compyte calculates this score automatically from your financial data and tells you exactly which metrics to improve before your next investor meeting.
Compyte calculates your VC readiness score from your real data and tells you exactly what to fix.