Resources
When a D2C founder needs a venture diagnostic
An investor will form a view of your business in the first twenty minutes of a call. A venture diagnostic gets you that view before an investor sees anything, so you have time to fix what they would find.
We look at your business the way an investor will, then help you fix what they would find. The short definition is on our venture diagnostics page. This piece covers what that looks like for an early-stage Indian consumer brand, what we check, and when it's the wrong thing to buy.
Why founders end up needing one
Founders who sell well are often the last to see their own business the way a fund sees it. That isn't a character flaw. You've been looking at the business from the inside for two or three years, through daily orders, supplier calls and a WhatsApp group with your ops lead. A fund looks at it from the outside, through a spreadsheet and a short list of questions it asks every consumer brand.
Here's a typical case (illustrative, not a client). A skincare brand does ₹18 lakh a month, mostly through its own site. The founder leads every pitch with monthly revenue and a 4.6 star rating. The first question back is what a customer is worth after paying for the ad that brought them in, and what share of them buy a second time inside 90 days. The founder has both numbers somewhere, in Shopify and Meta Ads Manager, but has never put them side by side. The call ends politely and nothing follows.
Nothing about that business was broken. The founder just answered a different question from the one being asked.
What we look at
A diagnostic covers the parts of a consumer business that decide whether it can take outside money and use it well. For an Indian D2C brand that usually means these.
Unit economics after marketing
Gross margin is only the start. We work out contribution margin per order after discounts, shipping, payment gateway fees, returns and the ad spend it took to get the order. Plenty of brands with a 65% gross margin turn out to lose money on a first order, and that's fine if the second and third orders pay it back. We check whether they do.
Repeat behaviour by cohort
We group customers by the month they first bought and track what each group does afterwards. A blended repeat rate hides the one thing a fund wants to know, which is whether newer customers behave better or worse than older ones.
Channel concentration
If 80% of revenue comes through one marketplace, your margin belongs to that marketplace's fee table. We map revenue by channel and what each channel costs you to keep.
Cash and working capital
Inventory cycles, supplier credit terms and marketplace settlement delays. Many consumer brands that look profitable on paper are short of cash every month because money sits in stock or in a payout queue.
Positioning against the shelf
We look at your price, pack size and claims next to the five or six products a customer actually compares you with, online and offline. If you can't say why someone picks you over the second option, an investor won't be able to either.
Claims and compliance
For beauty, wellness and food brands, what's on the label has to match what's in the ads and on the site. A fund's diligence will check this, so we check it first.
What you get at the end
A written diagnostic note, in plain language. It sets out what we looked at and what we couldn't verify, what's working, what's broken, one thing about your market you may not know, and the questions an investor will ask that you can't answer yet. Then our view on whether to raise now, raise later or not raise.
You read the note before we discuss a fee, and it's yours whether or not you work with us. If you do, we help with the work to fix what we found. That might be rebuilding the unit economics model, cutting a channel that costs more than it brings, or rewriting how you describe the business.
You can see how we score a business in the Avan Readiness Rubric.
When it's the wrong thing to buy
We turn down more founders than we take on, and saying so plainly saves everyone a call.
A diagnostic isn't useful if you're pre-revenue. There's nothing yet to diagnose, and your time is better spent getting the first hundred customers. It also won't help if you need money in the next eight weeks, because the honest answer at that point is a bridge from existing investors or a cost cut, not a repair job.
We also don't take on founders who won't share their numbers, supplement brands without the right certification, or skincare brands whose claims don't match the label. And we don't introduce a company to funds before we've reviewed it. We make the business investable first. We will tell you not to raise if that's the honest answer.
How it differs from an advisor or a banker
A banker is paid when you close a round, so their job is to get you funded. An advisor is often paid in equity, which ties their view to yours. We show you what we found before any fee is discussed, and the note is yours either way. That order is deliberate. Telling you to wait is only useful advice if hearing it costs you nothing.
Next step
If you're already selling and plan to raise within nine months, start a readiness conversation. We'll tell you plainly whether we're a fit.
Questions
FAQ
What do you need from me?
Usually your store, ad and marketplace data, settlement and courier reports, bank statements and P&L. After the first call we send the exact list in writing.
Is this the same as due diligence?
It covers much of the same ground, but it's done for you, not for an investor. You see everything first and decide what to do with it.
What does the first call cost?
Nothing. Everything before the scope call is free, and we don't charge for the diagnostic note.