Fundraise or not? Time to decode the growth dilemma for India’s start-ups
The Indian start-up ecosystem is currently witnessing a transformative phase where the definition of success is shifting from incremental capital to sustainable growth. To explore this evolution, Mint, together with Fairfox EON, recently hosted the second edition of its Founders Meeting and Learning Series, ‘The Unstoppables’, on Friday.
Named after the unstoppable founders who shape India’s innovation economy, the series aims to consolidate comprehensive knowledge in the ecosystem. The goal is simple; delivering high-level insights to those currently building and scaling their start-ups in an ever-evolving environment.
Choose between bootstrapped or funded
The event kicked off with a high-impact panel discussion titled ‘Bootstrapped or Funded: Choosing the right growth path for your startup’. The session sought to decipher the critical moments when a founder must decide whether, when and why to raise capital.
Moderated by Aayesha Varma from Hindustan Times, the panel included different perspectives from industry doyens: Anisha Singh, Founder and Managing Partner of She Capital; Amit Kumar, Founder and CEO of Dropty; and Amal Sivaji, Founder of Draavi.
Through real-world perspectives, the discussion addressed the delicate balances between maintaining absolute control through bootstrapping and accelerating growth through external financing.
Hybrid approach and stability
Anisha Singh, who sees the ecosystem from the eyes of both the founder and the investor, stated that the line between bootstrapping and financing is increasingly blurred. He suggested that sequencing, which means proving the model before seeking capital, has become a popular strategy in the current financing environment.
Sharing her advice for a bootstrapped founder trying to scale, Anisha Singh said: “It’s not about fundraising or bootstrapping. Given the somewhat difficult environment, I see bootstrapped founders sorting it out and then going out and raising money. If you truly believe in what you’re doing, no is not an absolute no.”
The reality of Indian venture capital
The conversation then shifted to the specific challenges of the Indian market. Amit Kumar highlighted the differences between the investment cultures of the West and India, noting that Indian investors often have extremely high expectations of immediate and large returns.
Amit Kumar felt that it was easier to raise funds in a market like the US as opposed to India. “In the Indian scenario, every investor looks for 10x returns. This will not be possible in the future,” he said, suggesting that both founders and investors may need to readjust their expectations towards long-term sustainability.
One-way ticket for foreign capital
The discussion also focused on when founders should avoid raising money. The panel warned against a FOMO (fear of missing out) culture, where founders raise funds just because their peers are doing so.
Amal Sivaji emphasized that entering the venture capital cycle is a commitment that fundamentally changes the DNA of a company. “While everyone is giving raises, you need a clear reason to raise them. There are compelling market reasons, product stage reasons. Once you start fundraising, you can’t go back. It’s a one-way ticket,” Sivaji cautioned. He also talked about how early-stage founders can build a strong fundraising runway and approach pre-seed and seed fundraising with confidence.
Looking at strategic assets beyond the balance sheet
While the panel focused on financial capital, the importance of physical infrastructure in a start-up’s journey was also touched upon. Fairfox IT Infra Senior Vice President – Sales and Strategy Bhupesh Nagarkoti shared insights on the residential and commercial landscape of the Delhi NCR region.
Nagarkoti highlighted a significant mindset shift among modern entrepreneurs. He talked about Fairfox’s projects and how founders now see office space not just as a monthly expense but also as a strategic asset. In the race for quality human resources, a well-designed workplace serves as a critical tool for attracting and retaining the right talent.
Founder’s Roadmap
The Unstoppables session was a reminder that there is no one-size-fits-all roadmap for a start-up. Whether a founder chooses the courage of bootstrapping or the high-octane fuel of venture capital, the decision should be made based on product readiness and market demand rather than external pressure. As the start-up story in India matures, these learning sessions continue to provide the blueprint for the next generation of resilient builders.
