Simple Math of getting invested — on an "Idea Stage" Startup

20 seconds — You can do it yourself.

Can you make and sell 8,70,000 units priced at ₹1,000 each with a ₹1 crore investment?

That's the real question. Not your pitch deck, not your vision statement — just that one line. Because that's exactly how investors think, even if they never say it out loud.

The 5-minute logic

If an investor gives you ₹1 crore, the first thing they calculate — silently — is when will I get it back? Generally, that's 2–3 years. Because they don't make money while it's invested; they make money only when they exit. Till then, everything is locked up, unless it's a debt instrument (which this isn't).

You'll obviously use the full ₹1 crore — that's why you raised it. So at the end of three years, this investor expects to walk out with more than the stock market could've given them. Otherwise, why would they risk it with you?

The investor's math

Average returns elsewhere — fixed income, equity markets, real estate — hover around 20–25% per year. At that rate, in three years their ₹1 crore should at least become ₹2.19 crore (roughly 119% gain compounded). Anything less is financially illogical for them.

Now comes the hard truth

Under Company Law, you (the Board) can't just give that cash back directly. The buyback rule allows you to repurchase only up to 25% of paid-up capital and free reserves in a year. And since you're an early-stage startup with no accumulated profits, that exit in cash has to come entirely from your future profits.

To pay an investor ₹2.19 crore, you'd need to have around ₹8.76 crore in free cash sitting in your bank — post-tax. And to have ₹8.76 crore free cash, assuming 10% PAT margins, you'd need about ₹87.6 crore in total revenue by the third year.

That's the math no one talks about.

Let's simplify

You sell a ₹1,000 SKU. To make ₹87.6 crore, you need to sell 8.7 lakh units.

If you reduce your price to ₹500 per unit, you'll need to sell 17.4 lakh units.

Now think: Today you sell none. How will you reach the capacity to manufacture, distribute, and sell 8.7 lakh units in three years with just ₹1 crore? Because before you show that, no other round is coming. And the profits you generate (PAT) — you can't touch for yourself; it stays in the company.

That's what the investor actually wants to see — whether your ₹1 crore can operationally create capacity to reach ₹87 crore revenue. That's it. One line on a pitch deck. Nothing else.

Now extend that logic

If you need ₹5 crore, just multiply it. 8.7 lakh × 5 = 43.5 lakh units at ₹1,000 each.

Then ask yourself — how will you make and sell 43.5 lakh units? Do that math before pitching.

And more importantly — are there even that many paying customers for your product or service?

A customer who can pay ₹1,000 for something new generally earns over ₹1 lakh a month. How many such customers are there in India who will buy your new thing? It's not as many as you think.

The unspoken reason you don't get funding

Most founders never ask this. Investors won't tell you either — because the day you can actually make and sell that many units and have real cash flow, banks will line up outside your door offering ODs and credit lines at 8–10%, or even 2% effective if you back it with an FD or collateral.

The moment you reach that point, you'll never again take capital at 119% effective cost (that's what venture money really is).

So the math is simple — do it before you get excited after watching a reel about "how to raise your first crore."

That's the only math that matters at the "idea" stage.

The secret

With SCOREMAX, we can. And we surely will. Because early-stage founders are not "startup celebrities" — they're employees desperate to build something of their own.

There are 20 crore unemployed people in India, 2 crore students graduating every year, and over 50% of women not in the workforce.

That's where the next generation of builders will rise from. And that's where our pricing and our product philosophy are built around — making it mathematically possible for every founder to reach product–market fit without ever touching ₹87 crore in revenue first.

Simple math, clear thinking, real growth. That's what builds a business — not reels, not hashtags, not hype.