The Operating Manual for the Middle
How mid-stage founders and operators are redefining value in the “messy middle”, and why that discipline is India’s hidden edge
Forget the startup unicorn rapture or the IPO rollercoaster. The real magic happens in the middle miles - between Series B and Series E - where promise either becomes product or fades into obscurity. Here, companies confront the hardest truth: growth isn’t glamorous; it’s gritty. After the initial sprint, they face a crucible of scaling people, systems, and margins - often with little fanfare but all the stress. In India, where around 90% of startups fail within a decade according to NASSCOM data, the difference between indifference and endurance lies in mastering middle-stage mechanics: cash flow rigour, operational resilience, and strategic discipline.
I’ve seen this firsthand.
Working in structured finance and venture investments, I’ve watched seemingly promising businesses with strong founding teams buckle under the weight of their own inefficiencies.
Equally, I’ve seen quieter companies - often led by obsessively frugal operators - hit inflection points not by chasing valuation multiples, but by mastering the unglamorous: renegotiating vendor terms, aligning hiring with revenue visibility, and focusing relentlessly on unit economics.
In early 2023, founders could feel the room temperature drop. Indian venture capital had entered a winter of quiet recalibration. The ecosystem was still licking its wounds from 2021’s exuberance - high cash burn, poor governance, and too many top-heavy growth stories that unraveled by Series C. “Get to breakeven” became the investor refrain, and startup founders braced for an era of austerity.
But something shifted in late 2024.
The room warmed.
Scale was back in the conversation, not as a buzzword but as a calibrated ambition.
Indian VCs are once again backing businesses with breakout potential, but this time with sharper instincts and scar tissue. They’re not betting on vanity GMV or hyperscale for the sake of it. Instead, they’re backing founders who can navigate volatility, articulate full-stack value, and build distribution engines that compound.
The ecosystem didn’t just sober up.
It levelled up.
But, why is the the “middle” so crucial?
The middle stage is not a pause between sparks and success - it is where the company either proves its long-term mettle or burns out quietly. This is especially pronounced in India, where early-stage capital is flowing freely, but patient, disciplined capital and board-level support for operators in the middle is still catching up.
Survival odds wobble: Globally, according to CB Insights, ~20% of startups fail in year 1, ~30% by year 2 - and nearly 70% by year 5. India mirrors this trend: ~20% die in year 1, ~30% by year 2, and ~45% by year 5 (Source: Inc42).
VC backing is no safety net: Even with venture backing, 29% of startups fail due to running out of cash, and only 16% fail because of poor product-market fit (Source: CB Insights 2023). That means execution - not vision - is the true failure mode of the middle.
Mid-stage gap: While early-stage attracts evangelists and late-stage excites exit-oriented investors, the Series B to E corridor is under-resourced in mentorship, discipline, and long-term operational scaffolding.
In my own experience working with mid-stage companies, I’ve often found founders struggling with the shift from story-driven funding to spreadsheet-driven scrutiny. The honeymoon is over. Everyone’s looking at your cash flow, and your org chart.
That’s where the real test begins.
Cost Consciousness with Compound Ambition
The new wave of scale isn’t about bloated burn or land grabs. It’s about disciplined distribution. Investors are looking for businesses where every marginal dollar doesn’t just chase revenue - it builds moats. CAC isn’t just a line item; it’s a reflection of founder ingenuity.
Take B2B platforms selling to SMEs. Five years ago, scale meant adding thousands of logos. Now, it means driving net revenue retention north of 130% through cross-sell and workflow lock-in. In healthtech, it’s not enough to aggregate patients - you need to own the protocol, the practitioner, and the payment. D2C brands chasing scale are expected to layer community, content, and commerce, not just discount their way to repeat rates.
Mid-tier IT services firms are increasingly building niche vertical solutions - say for US outpatient clinics or GCC family offices - not chasing sheer seat count but embedding into client processes with co-developed IP. According to a NASSCOM-Zinnov report from 2023, 41% of mid-sized firms adopting such specialisations saw revenue growth rates above industry average.
Founders raising Series A and beyond are being asked:
How does your GTM scale intelligently?
What’s your path to layering efficiency without diluting velocity?
The best ones have answers. And they’re the ones getting term sheets again.
Startups that survive the middle years embrace cash flow as a strategy, not just an outcome. After product-market fit, capital becomes less about experimentation and more about disciplined allocation. Indian founders are increasingly adopting treasury habits typically seen in large corporates - managing burn, diversifying credit lines, negotiating vendor terms, and maintaining at least 18-24 months of runway.
A 2024 Tracxn analysis noted that 43% of shutdowns in India’s funded startups stemmed from working capital misfires or cost bloat. The RBI’s Financial Stability Report from December 2023 also indicated that startups with access to structured short-term debt facilities exhibited 17-22% higher survival rates over three years.
I’ve worked on deals where the deciding factor wasn’t just a killer pitch deck, but a founder’s grasp of contingency planning: who they’d call if one lender backed out, how many months of reserves they had, whether they could shift operations within 72 hours.
That’s the kind of edge investors remember.
The Funnel Is the Founder
In today’s market, where growth is scrutinised and capital is cautious, founders can’t rely on charisma or channel hacks. They need clarity. And the clearest signal often hides not in pitch decks or pipeline dashboards, but in the funnel - especially the part no one sees.
The strongest founders aren’t just tracking leads; they’re reverse-engineering decisions. They treat every funnel stage - awareness, intent, conversion, retention - as a product in itself, and they optimise not from the top down, but from the close up.
What happened in the exact moment a customer said yes?
What conditions made an investor wire funds?
What belief tipped a skeptical stakeholder into trust?
According to research by McKinsey (2023), companies that optimised for customer decision journeys rather than isolated funnel stages experienced 10 to 15% higher customer retention rates. A study from Bain (2024) found that B2B companies with clearly defined funnel milestones had 21% shorter sales cycles and 28% higher win rates.
Funnel intelligence, not just traffic, is now a defining edge.
The funnel isn’t a spreadsheet.
It’s a system of trust.
Grow Like a Glacier
Founders chasing viral growth often treat funnels like megaphones: loud, wide, and top-loaded. But the most resilient companies grow more like glaciers. Slowly, steadily, sometimes invisibly. Until they move with the force of inevitability.
A glacier doesn’t need speed to make progress. It builds mass through consistency - small layers compacting over time, each stage of the funnel doing its job quietly but completely.
This is what some call "Glacier Growth." Not slow for the sake of it, but deliberate. And deeply efficient.
Think of your mid-funnel as the critical layer.
You’ve got their attention - but can you keep them warm?
Can you offer six compelling touch-points before they convert?
Can you design evergreen moments of education, emotion, or nostalgia?
One founder of a personal finance app grew email engagement by 400% over six months by sending weekly stories of real Indian households managing budgets - data later revealed those readers were 3.2 times more likely to convert into paying users.
This is the new discipline: build for compound conviction, not compressed timelines. The best founders aren’t in a rush to go viral. They’re in the business of building glaciers - cold, steady, massive, and impossible to ignore once they arrive.
Eldercare Is Having a Moment
Sometimes the market itself shifts the funnel.
One sector drawing outsized early attention is eldercare tech. With India's over-60 population projected to reach 194 million by 2031 and over 319 million by 2050 (Source: Ministry of Statistics and Programme Implementation, 2023), the demographic tailwinds are undeniable. And yet, the category remains surprisingly under-built.
What we’re now seeing is a new class of eldercare platforms that integrate health services, financial tools, insurance, and community into one seamless loop. These aren’t just aggregators - they’re orchestrators. The funnel here doesn’t just convert a user. It enrols a household.
Founders who recognise this complexity are rethinking design, language, even onboarding. One team I met replaced clinical language with empathetic storytelling and saw a 3x boost in conversions. According to Redseer Strategy Consultants, India's eldercare market could reach $20 billion by 2032, driven by digitally native services that combine care with continuity.
As Nandan Nilekani put it, "The silver of today is the gold of tomorrow."
Institutional Capital Has Grown Up
Funds are maturing. Today’s growth investors aren’t just chasing logos or ARR multiples. They’re under pressure to demonstrate DPI, not just paper markups. Bain & Co.’s 2024 India Private Equity report notes a marked shift in portfolio rebalancing, with over 50% of surveyed funds prioritising path-to-liquidity over notional growth.
This has implications for early-stage VCs too. Seed firms that used to spray aggressively are tightening filters. They’re still taking bold bets, but on sharper signals: iterative velocity, magnetic hiring, unusual customer love, or clear signs of wedge-to-wall thinking.
Capital hasn’t turned cold.
It’s turned professional.
What does this mean for Founders?
If you’re building today, understand that the bar hasn’t just risen. It’s shifted. Founders who can articulate a credible path to scale without shortcuts are in the driver’s seat.
This is the moment to reintroduce ambition, not as performance theatre, but as precise execution.
It’s also essential to remember that capital has grown up. Funds are maturing. Today’s growth investors aren’t just chasing logos or ARR multiples. They’re under pressure to demonstrate DPI, not just paper markups. Bain & Company’s 2024 India Private Equity report notes a marked shift in portfolio rebalancing, with over 50% of surveyed funds prioritising path-to-liquidity over notional growth.
This has implications for early-stage VCs too. Seed firms that used to spray aggressively are tightening filters. They’re still taking bold bets, but on sharper signals: iterative velocity, magnetic hiring, unusual customer love, or clear signs of wedge-to-wall thinking.
The best founders are:
Designing funnels that compound trust, not just clicks
Treating GTM like product, and distribution like design
Operating with fiscal sanity and category-shaping potential
In a market rediscovering discipline, founders who can match rigour with reach - who can combine capital efficiency with real, earned momentum - won’t just get funded.
They’ll get followed.
A Call for Middle-Stage Capitalism
India’s next $50B of startup value won’t come from blitzscaled unicorns. It will be created by companies that operate in the shadows of funding hype, building boring but beautiful businesses. These firms don’t make noise - they make payroll, margin, and value.
We need more middle-stage operating partners. More narrative oxygen for founders who don’t speak in hockey sticks but in hiring plans, credit lines, margin levers, and new verticals. And we need more capital that respects the quiet grind of companies compounding at 20%, not 10x.
It’s not the blitz that builds legacies - it’s the grind in the middle that does.
Author's note: This piece is part of Aditi's Almanac - where market realism meets operator empathy. If you're building in the middle and want to connect for funding, strategic advice, or thoughtful conversation, write in or connect on LinkedIn.