Startup Funding in India

The headline number founders quote is the round size. It is the least useful number in the deal. Dilution, board rights and liquidation preference decide what you keep. A ₹5 crore round at a bad preference can be worth less to you than ₹3 crore at a clean one.

What does DPIIT recognition give you, and what does it cost?

Recognition is granted by the Department for Promotion of Industry and Internal Trade. It costs nothing. You need an incorporated entity first, so start with company registration and Udyam registration. The rules are published on startupindia.gov.in and are as follows, as of September 2026.

The tax holiday is the item worth the paperwork. It is a separate approval from an inter-ministerial board, not automatic on recognition. And it only helps a company that makes a profit inside its first ten years. Many do not.

How does angel and VC money actually get priced?

An angel round is usually small, fast and priced off a story. A venture round is priced off traction. Both are equity, so both are permanent. You are selling a share of every rupee the company ever earns.

Three terms decide the real cost. Liquidation preference sets who gets paid first in a sale. Anti-dilution protects the investor if you raise later at a lower price. Board composition decides who can block a decision. A founder who negotiates only on valuation and signs the rest has traded the expensive thing for the visible one.

Convertible instruments delay the pricing. In India these are usually CCPS or CCDs, because a plain SAFE does not sit neatly inside Indian company law. Delay is useful when you cannot yet defend a number. It is not free. The conversion terms decide the price later, and you agreed to them earlier.

When is venture debt cheaper than equity?

Venture debt is a loan to a company that a bank would not lend to. It is priced above a normal business loan and usually carries warrants. So it is not cheap money. It is cheap dilution.

The honest test is simple. Debt makes sense when you can name the milestone the money buys, and when hitting that milestone raises your next round price. It is a bridge between two priced events. It is a bad idea as a substitute for revenue. A loan does not care that your growth slowed.

The bank route is worth checking first. A recognised startup can borrow under CGSS without pledging collateral, because the guarantee sits in place of the security. That is a materially different product from a personal guarantee on your house. If you are comparing options, our pages on business loans and collateral-free CGTMSE lending set out how guarantee-backed credit is priced.

Which government scheme is realistically reachable?

The Fund of Funds does not write you a cheque. SIDBI puts money into alternative investment funds, and those funds invest in startups. So your route into FFS money is to raise from an AIF that has drawn from it. Knowing that changes who you pitch, not whether you apply.

The Seed Fund Scheme is the one you apply to directly, through an approved incubator. It is aimed at proof of concept, prototype and market entry. It is small money by design, and the application runs on the incubator’s timetable rather than yours.

We are not publishing scheme-level disbursal figures or approval rates here. Those move every quarter and we could not verify a current set against a primary source. Check the scheme page before you build a plan around it.