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Is your venture in very early stages that angels and VCs are not showing interest? Are you looking for some initial funding to build your venture? Keen to get some traction before reaching out to VCs or Angels? Our recommendation for founders would be to actively consider government funding as one of the options.

Founders looking to raise funding for their startups actively consider the following sources: (a) Equity funding from investors such as angels, VCs, and corporations; and (b) Debt funding from banks and institutions. As the funding environment tightens, angel investors and VCs have been very picky. More importantly, they are keen to see some traction before making their investment decision. Loans have not been a very popular choice for early-stage founders and startups for well known reasons.

Under these circumstances, government funding sources play an important role for startups. They fund breakthrough startup ideas, particularly in deep tech related areas or in areas of social relevance, that have significant difficulties in raising private capital. The financial investment from government sources helps startups in building proof-of-concept, developing prototypes, conducting product trials, and even launching in the market. They enable startups to graduate to a level where they will be able to raise investments from angel investors or venture capitalists or seek loans from commercial banks and financial institutions.

This is the golden era for startup funding from government agencies. The government is the biggest direct investor in startups in the country today. None of the well known investment firms or platforms are anyway close to the number of startups investment by the government. Overall more than 9,000+ startups and 18,000+ entrepreneurs have benefitted from these central & state government initiatives. Your startup can be the next one.

Government funding for startups has various advantages:
  • Some schemes provide funding by way of grants, which means the founders do not have to repay them back nor do they have to give shareholding in return. This makes them very appealing over any other form of financial support
  • They are widely available, particularly for those sectors and startups that are likely to be bypassed by private sources. Government schemes are available for entrepreneurs of all backgrounds, communities and startups from all industries & sectors, without any bias or discrimination as long as the eligibility criteria are met
  • Brings immense credibility. Any startup or entrepreneur who has successfully received funding from government schemes gains immense credibility from their customers and other stakeholders in the ecosystem, enabling them to crack more deals and partnerships