Financing the Startup Economy - A Critical Study

Startup is becoming a trend in our country with the government also recognizing this form of business by providing incentives. However, from the time this idea gained momentum in 2016 with the launch of Start Up India Initiative by the government, not many startups have succeeded. Majority of failures can be attributed to the financial aspects of startups at various stages. Post the initial funding received at the experimental phase, entrepreneurs find it difficult to meet the financing needs at the expansion stage. This particular issue needs to be explored further so that suitable remedies or solutions can be sought. This paper aims at gaining an understanding of various sources of funding available for a startup. The main focus is on selection of funding with regards to different sources, underlined causes for these and to give an insight into what consequences these choices will have on the venture. An attempt has also been made to comprehend the entrepreneur’s perception toward various capital providing institutions.