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𝗛𝗼𝘄 𝘁𝗵𝗲 𝗧𝗼𝗽 𝟭% 𝗼𝗳 𝗙𝗼𝘂𝗻𝗱𝗲𝗿𝘀 𝗖𝗼𝗻𝘁𝗿𝗼𝗹 𝗔𝗹𝗹 𝗙𝘂𝗻𝗱𝗶𝗻𝗴 Ever wondered why some startups 𝐠𝐞𝐭 𝐦𝐢𝐥𝐥𝐢𝐨𝐧𝐬 𝐢𝐧 𝐟𝐮𝐧𝐝𝐢𝐧𝐠, 𝐰𝐡𝐢𝐥𝐞 𝐨𝐭𝐡𝐞𝐫𝐬 𝐬𝐭𝐫𝐮𝐠𝐠𝐥𝐞 𝐭𝐨 𝐫𝐚𝐢𝐬𝐞 𝐚 𝐬𝐢𝐧𝐠𝐥𝐞 𝐫𝐨𝐮𝐧𝐝? It’s not just about a great idea or execution. 𝐀 𝐡𝐚𝐧𝐝𝐟𝐮𝐥 𝐨𝐟 𝐞𝐥𝐢𝐭𝐞 𝐟𝐨𝐮𝐧𝐝𝐞𝐫𝐬 𝐜𝐨𝐧𝐭𝐫𝐨𝐥 𝐈𝐧𝐝𝐢𝐚’𝐬 𝐬𝐭𝐚𝐫𝐭𝐮𝐩 𝐟𝐮𝐧𝐝𝐢𝐧𝐠—𝐚𝐧𝐝 𝐢𝐟 𝐲𝐨𝐮’𝐫𝐞 𝐧𝐨𝐭 𝐢𝐧 𝐭𝐡𝐞𝐢𝐫 𝐢𝐧𝐧𝐞𝐫 𝐜𝐢𝐫𝐜𝐥𝐞, 𝐫𝐚𝐢𝐬𝐢𝐧𝐠 𝐦𝐨𝐧𝐞𝐲 𝐢𝐬 𝐧𝐞𝐚𝐫𝐥𝐲 𝐢𝐦𝐩𝐨𝐬𝐬𝐢𝐛𝐥𝐞. Let’s break down how this power structure works and why it’s rigged against new founders. Funding in India’s startup ecosystem isn’t as open as it seems. Here’s what’s really happening: 1. 𝗧𝗵𝗲 𝗢𝗹𝗱 𝗕𝗼𝘆'𝘀 𝗖𝗹𝘂𝗯: Investors prefer 𝐫𝐞𝐩𝐞𝐚𝐭 𝐟𝐨𝐮𝐧𝐝𝐞𝐫𝐬 𝐚𝐧𝐝 𝐞𝐱-𝐞𝐦𝐩𝐥𝐨𝐲𝐞𝐞𝐬 𝐟𝐫𝐨𝐦 𝐭𝐨𝐩 𝐬𝐭𝐚𝐫𝐭𝐮𝐩𝐬 (like Flipkart, Paytm, and Zomato). If you’re an outsider, 𝐲𝐨𝐮’𝐥𝐥 𝐬𝐭𝐫𝐮𝐠𝐠𝐥𝐞 𝐭𝐨 𝐠𝐞𝐭 𝐧𝐨𝐭𝐢𝐜𝐞𝐝. 2. 𝗡𝗲𝘁𝘄𝗼𝗿𝗸 𝗢𝘃𝗲𝗿 𝗠𝗲𝗿𝗶𝘁: It’s not just about your startup’s potential—it’s about 𝐰𝐡𝐨 𝐲𝐨𝐮 𝐤𝐧𝐨𝐰. If you’ve worked with top VC-backed founders before, 𝐲𝐨𝐮𝐫 𝐟𝐮𝐧𝐝𝐢𝐧𝐠 𝐜𝐡𝐚𝐧𝐜𝐞𝐬 𝐬𝐤𝐲𝐫𝐨𝐜𝐤𝐞𝐭. 3. 𝗧𝗵𝗲 𝗦𝗮𝗺𝗲 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀, 𝗧𝗵𝗲 𝗦𝗮𝗺𝗲 𝗦𝘁𝗮𝗿𝘁𝘂𝗽𝘀: A few big VCs—like Sequoia Capital India (now Peak XV), Accel, and Tiger Global—fund the same group of founders again and again. New entrepreneurs? They barely get a chance. 4. 𝗠𝗲𝗱𝗶𝗮 𝗮𝗻𝗱 𝗛𝘆𝗽𝗲 𝗣𝗹𝗮𝘆 𝗮 𝗥𝗼𝗹𝗲: Once a startup gets funding from a big-name investor, 𝐭𝐡𝐞 𝐦𝐞𝐝𝐢𝐚 𝐡𝐲𝐩𝐞𝐬 𝐢𝐭 𝐮𝐩, 𝐚𝐭𝐭𝐫𝐚𝐜𝐭𝐢𝐧𝐠 𝐞𝐯𝐞𝐧 𝐦𝐨𝐫𝐞 𝐟𝐮𝐧𝐝𝐢𝐧𝐠. Meanwhile, genuinely innovative startups remain invisible. The result? 𝐀 𝐜𝐲𝐜𝐥𝐞 𝐰𝐡𝐞𝐫𝐞 𝐭𝐡𝐞 𝐭𝐨𝐩 𝟏% 𝐤𝐞𝐞𝐩 𝐠𝐞𝐭𝐭𝐢𝐧𝐠 𝐫𝐢𝐜𝐡𝐞𝐫, 𝐚𝐧𝐝 𝐧𝐞𝐰 𝐟𝐨𝐮𝐧𝐝𝐞𝐫𝐬 𝐬𝐭𝐫𝐮𝐠𝐠𝐥𝐞 𝐭𝐨 𝐛𝐫𝐞𝐚𝐤 𝐢𝐧. 𝗙𝗹𝗶𝗽𝗸𝗮𝗿𝘁 𝗠𝗮𝗳𝗶𝗮: Many ex-Flipkart employees—like those who started Udaan, Groww, and PhonePe—got 𝐪𝐮𝐢𝐜𝐤 𝐚𝐜𝐜𝐞𝐬𝐬 𝐭𝐨 𝐕𝐂 𝐟𝐮𝐧𝐝𝐢𝐧𝐠 because of their background. 𝗢𝗹𝗮’𝘀 𝗜𝗻𝗳𝗹𝘂𝗲𝗻𝗰𝗲: Ola’s former execs got funding for new ventures, while independent mobility startups struggled. 𝗕𝘆𝗷𝘂’𝘀 𝗘𝗳𝗳𝗲𝗰𝘁: Despite Byju’s decline, ex-employees still attract investor attention for their new startups. 𝗭𝗼𝗺𝗮𝘁𝗼’𝘀 𝗜𝗻𝗻𝗲𝗿 𝗖𝗶𝗿𝗰𝗹𝗲: Zomato’s leadership and early employees have 𝐞𝐚𝐬𝐢𝐞𝐫 𝐚𝐜𝐜𝐞𝐬𝐬 𝐭𝐨 𝐟𝐮𝐧𝐝𝐢𝐧𝐠 than unknown founders with strong ideas. This isn’t just coincidence—it’s 𝐚 𝐰𝐞𝐥𝐥-𝐜𝐨𝐧𝐧𝐞𝐜𝐭𝐞𝐝 𝐧𝐞𝐭𝐰𝐨𝐫𝐤 𝐭𝐡𝐚𝐭 𝐟𝐮𝐧𝐝𝐬 𝐢𝐭𝐬𝐞𝐥𝐟. How can new founders break in? 1. 𝗟𝗲𝘃𝗲𝗿𝗮𝗴𝗲 𝗮𝗹𝘁𝗲𝗿𝗻𝗮𝘁𝗲 𝗳𝘂𝗻𝗱𝗶𝗻𝗴 𝗿𝗼𝘂𝘁𝗲𝘀. Instead of chasing VCs, explore angel investors, revenue-based financing, and bootstrapping. 2. 𝗕𝘂𝗶𝗹𝗱 𝘆𝗼𝘂𝗿 𝗼𝘄𝗻 𝗻𝗲𝘁𝘄𝗼𝗿𝗸. If you’re not in the club, create your own circle—connect with founders, investors, and ecosystem players. 3. 𝗨𝘀𝗲 𝘀𝗼𝗰𝗶𝗮𝗹 𝗺𝗲𝗱𝗶𝗮 𝗳𝗼𝗿 𝘃𝗶𝘀𝗶𝗯𝗶𝗹𝗶𝘁𝘆. Many unknown founders have attracted funding by building a strong presence on Twitter and LinkedIn. 4. 𝗣𝗿𝗼𝘃𝗲 𝘁𝗿𝗮𝗰𝘁𝗶𝗼𝗻 𝗯𝗲𝗳𝗼𝗿𝗲 𝗳𝘂𝗻𝗱𝗿𝗮𝗶𝘀𝗶𝗻𝗴. Investors care about numbers—if you show strong revenue and customer growth, they can’t ignore you. Do you think India’s startup funding is controlled by a few elite founders? Or can outsiders still break in with the right approach? Drop your thoughts below! I hope you've found this helpful. Follow Vishu Bheda for more detailed insights about the indian startup ecosystem!