5 Biggest Problems for Getting Funds in India

3 min readNov 16, 2023

Recently, on my podcast, Figuring Out, I talked to Kishore Biyani, founder of the two most popular brands in India — Pantaloons and Big Bazaar. With his extensive industry experience, we delved into various aspects of building a business, including a crucial one — securing funds. Here are some of the most prominent problems entrepreneurs in India face when getting funding.

1. Lack of access to capital

One of the most significant challenges entrepreneurs face in India is the limited access to capital. While the country has a burgeoning startup ecosystem and a growing number of venture capital firms and angel investors, the competition for funding is fierce. Many startups, especially those in their early stages, struggle to secure funding due to intense competition and stringent selection criteria. This makes it difficult for innovative ideas to get off the ground.

2. Stringent rules and regulations

India’s regulatory environment can be complex and challenging for businesses seeking funding. Obtaining necessary permits and licenses, adhering to tax regulations, and navigating bureaucratic red tape can be time-consuming and expensive. These regulatory hurdles can deter domestic and foreign investors, making it difficult for entrepreneurs to attract capital to grow their businesses.

3. Risk-averse investors

Indian investors tend to be more risk-averse than their counterparts in other countries. They often prefer investing in established businesses rather than startups with high growth potential. This risk aversion can make it challenging for early-stage startups to secure funding, as investors may be hesitant to take a chance on unproven concepts, leading to missed opportunities for innovation.

4. Lack of guidance

Many startups in India face challenges related to a lack of mentorship and guidance. Building a successful business often requires more than just financial resources; it also demands industry expertise, strategic insights, and networking opportunities. In India, the availability of experienced mentors and advisors is limited, making it difficult for entrepreneurs to navigate the complexities of the business world and attract investors who value mentorship as part of their investment.

5. The question of, “What if?”

It’s nothing new for an entrepreneur to face this question of, “What if?” What if I cannot make it? What if I fail? What if I cannot make my business profitable? And many more. Many entrepreneurs fear that a business failure will be viewed negatively, hindering their ability to secure funding. This fear of failure can discourage innovation and entrepreneurship and lead to missed opportunities for investors to support potentially groundbreaking ideas.

However, India is home to about 63 unicorns, and the startup ecosystem in India is thriving. The government has introduced initiatives such as “Startup India” to promote entrepreneurship, and more investors are recognizing the potential of the Indian market. Hence, procuring funding may be difficult, but it is not insurmountable. The Indian startup ecosystem continues to evolve, offering hope for a brighter future for aspiring entrepreneurs and innovators.

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