Why Indian Venture Capital finally got serious about diligence
By Karan Bhatty, Founder, Millow
For much of the decade before 2022, venture capital in India operated on a simple logic: the cost of missing a winner was higher than the cost of funding a bad actor. Capital was abundant, rounds closed fast, and investors competed to be seen as founder-friendly. Thorough diligence was, in many cases, treated as a deal risk rather than a fiduciary necessity.
Then the correction arrived, and so did the consequences.
The governance failures that came into public view between 2022 and 2023 — at GoMechanic, BharatPe, Mojocare, Zilingo and others — shared a common thread. In each case, the issue was not that diligence was entirely absent. It was that diligence was too dependent on what the company chose to present. Investors verified incorporation documents, basic financials and cap table records. What they did not independently verify was whether the revenue was real, whether...
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