Indians have always been recognized for their entrepreneurial spirit and business-minded philosophy. With these qualities and drive to earn well has led to a boom in startups in India, contributing to our country’s economic growth.
Effective resource allocation and utilization, as well as favorable initiatives to support startups, have significantly boosted our GDP. We are one of the fastest-developing countries actively investing in some form of financial tool. Investment in our hard-earned income is essential to tackle inflation and save money smartly. Therefore, if you want high returns and are ready to take risks, invest in Indian startups.
But how do you find startups to invest in India? Read this blog to know more, where we will cover the role of startup investment and how to find the best startups to invest in India.
Investing in Indian Startups
If you have a substantial income or funds for investment, you might want to look into investing in Indian startups. But why Indian startups? Let’s talk.
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High-Risk, High-Profit
Back in 2014, imagine if a financial startup approached you with an amazing full-stack solution for online payment for startups and companies. You would not think of the idea as a potential investment because complete digitization had not occurred yet and the e-commerce market was just settling in.
However, you have a high income, so you believed in their vision and funded the Razorpay startup. Now, that startup has grown to be one of the most successful, winning the ET Startup Awards in 2022 with a market valuation of $7.5 billion in 2021. That is what we mean when we say “high-risk, high-return investment.”
Investing in a startup might result in large returns if it expands and generates significant sales. However, there is a substantial risk of losing all your investment since there is a strong likelihood that the firm might fail. As a result, a rigorous examination is required to comprehend the startup’s success rate, as well as market research to determine the demand for the startup’s product or service.
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Diversifying Investment Portfolio
The OG investors know that diversification is the key to a profitable portfolio. There are safe investments, and then there are risky ones. While only you can measure what’s safe for you. We can say that startup funding in India is a dangerous but profitable investment alternative for you. As an angel investor network, we have witnessed our angel investors in India benefit from investing in an Indian startup.
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Supporting Innovation
As responsible citizens of our country, we should make this country proud with innovative businesses and startup products. Therefore, by funding startups in India, you can contribute to industry growth with innovative products and technology.
Now that we understand the importance of startup funding, let’s talk about how to find startups to invest in India.
Finding Startups in India
There are no perfect startups to invest in. Investing in startups will always carry some form of risk. However, choosing the proper startups might help to limit and minimize that risk. We’ve created a guide to assist you in locating companies in India for investment.
1. Understand the Indian Startup Ecosystem
The first step is to understand the Indian startup ecosystem, which is the system within which a startup functions. It is a support structure required for businesses to succeed, including startup investment platforms and entities that give money and mentorship to assist entrepreneurs in prospering in their industry.
Following are the alternatives for startup funding in India, where anyone can find startups to invest in.
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Angel Investors in India
Angel investors are HNIs’ with money to spare. They support startups and innovation by often providing seed funding or early-stage capital to the startups for equity shares. If the startups succeed, these investors enjoy a hefty profit. Angel investor networks like 21BY72 connect startups and investors to benefit both parties.
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Venture Capital in India
Venture capital firms pool money from other investors with the promise of hefty returns. They invest in growth-stage startups with successful track records and promising growth and profitability curves for high returns from upscaling the startup. You can connect with venture capital firms to invest in startups.
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Crowdfunding in India
Crowdfunding is yet another popular method of raising funds from the public without any liabilities. The startup must prove its legitimacy to the public and raise its funds. There might be some incentives for such investments.
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Incubators in India
Incubators accept early-stage firms and give them the required assistance and mentoring. These incubators also provide financial options for businesses and help investors identify promising startups.
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Accelerators in India
Accelerators support startups in their growing stages to provide funds and boost operations. They offer a supportive environment where startups can connect with other entrepreneurs and also provide investment opportunities for startups.
2. Conduct Market Research.
There are diverse alternatives to investing in Indian startups. However, each has its pros and cons. You need to do some research on what investment type is suitable for you. Before you make a decision, do research to understand what startups are offering, their valuation, and their likelihood of success. There are points on which they need to be analyzed, such as market demand, product market fit, equity they are offering, the support they are demanding, growth opportunity for the startup, founders knowledge, and efficiency of the startup’s team.
3. Leverage Your Network
It would help if you leverage your network to find emerging startups needing funding. It enables you to find credible startups and build trust with them. You can develop your investor network through networking events like the Global Startup Summit. It helps you find investors to grow your network and startups to invest in.
4. Check the Legal Aspects of Startups.
Before making the final investment, conduct due diligence to verify if the startup is legitimate. Check for all the legal permits and registration papers, proving their authenticity and compliance with government policies.
Conclusion
If you are wondering how to find startups in India for investment, you are in the right place. When you invest in Indian startups, you can enjoy high ROI, support innovation in the industry, and diversify your portfolio.
But to go about finding the right startup to invest in? The first step is that you need to be part of the Indian startup ecosystem, including angel investors, venture capital, incubators, and accelerators, to offer mentorship and startup funding in India. Do your research to find the best alternative for you. Do thorough research and due diligence before selecting a startup to invest in India. It would help if you built your network to find such emerging startups easily through investors’ networks.
FAQs
1. What is the Indian startup ecosystem?
The Indian startup ecosystem exists to support startups with investment, mentorship, guidance, and training programs to boost entrepreneurship in India. The startup ecosystem includes supportive organizations like incubators and accelerators, government organizations, and investors like angel investors and venture capital.
2. What is the role of startup funding in India?
Startup funding in India is essential for startups to convert their innovative ideas into businesses. They can conduct R&D, market the startups, improvise the MVP, and more with the funding.
3. Can any body invest in Indian startups?
Yes. Anyone can invest in startups through angel investing, crowdfunding, venture capital, FDI, and more. However, there are some government regulations that one must adhere to when doing crowd-funding or other high-risk investments.
