Get grilled on a company of your choosing: Rakshavik Cyber. Defend its metrics, size the three biggest risks, and explain what its last round's terms mean for the fund if the next round is flat.

The metrics hold up, but at 20 times ARR the price is the biggest risk: at an illustrative 10 times, ARR must roughly double to about Rs 140 crore before Rs 1,400 crore stops looking like a down round in real terms. The other two risks are the 9% customer, worth 15 points of growth, and dependence on 121% retention. In a flat round anti-dilution does nothing; the fund's protection is its Rs 200 crore preference, which pays out ahead of common until about Rs 1,650 crore.

Start with how the growth is made, because that is what the interviewer will dig into. Opening ARR was Rs 70 crore over 1.65, Rs 42.4 crore, so the company added Rs 27.6 crore. Net retention of 121% means existing customers added Rs 8.9 crore net of churn, so new customers brought the other Rs 18.7 crore: growth comes from both engines, not one. An 81% gross margin is normal for software. A burn multiple of 1.4 means Rs 38.6 crore of burn for Rs 27.6 crore of new ARR; many investors treat anything under about 1.5 as efficient for a company growing this fast, though bands vary by firm.

Size each one; a risk without a number is an opinion. First, price: at 20 times ARR, if the next investor pays an illustrative 10 times, Rs 1,400 crore needs ARR of Rs 140 crore, about 1.4 years away at 65% growth. Second, concentration: the top customer is Rs 6.3 crore of ARR, and losing it would have cut this year's growth from 65% to 50%. Third, retention: next year's plan leans on existing customers. If new-logo ARR grows 30% to Rs 24.3 crore and retention stays at 121%, growth is about 56%; at 110% it falls to about 45%. Banks consolidating vendors is the scenario that would cause it.

Picture lending a friend money for his shop in exchange for first claim on the shop if it is sold, plus a share of the profit if it does well. A new partner who buys in at the same price does not change your deal, but he dilutes your share and may take his own first claim ahead of yours. A flat round does not trigger anti-dilution, because the price per share does not fall; the fund is diluted from 14.3% to 12.1% and its downside protection is the Rs 200 crore preference. With Rs 250 crore of new money ranking first, the fund gets nothing below a Rs 250 crore exit, every rupee from 250 to 450, then a flat Rs 200 crore until about Rs 1,650 crore, where its 12.1% becomes worth more than the preference.

Because time has passed and the company has grown. If ARR has roughly doubled by the next round and the price is unchanged, the multiple has halved, from 20 times to about 10 times: the fund has made nothing on its money while the company did everything right. The fund's IRR on that mark is zero, and a new investor ranking ahead of it has made its preference worse. That is what a partner means by a flat round being a down round in real terms. The honest close is a judgement: Rakshavik is a strong company bought at a full price, and the fund's job now is to help it grow into that price, protect retention at the large accounts, and resist structure in the next round that pushes its preference down the stack.