Every startup needs funding in its initial stage to build the product at a scale to cater to the expansive market while generating revenue. It is the success mantra in the startup ecosystem for a startup to quickly scale & grow.

But many young Indian startups, without realizing the abundance of startup funding options available in India, miss out on the opportunity to build to be the next market disruptor.

Believe it or not, in India, there are 8 startup funding sources available for Indian startups to raise seed capital.

Seed capital is the initial financial support a business needs to get off the ground. It's the first investment a startup receives to build the product and expand on its operations. Seed capital comes from professional investors and institutions looking to back a new revolutionary idea/market disruptor financially.
 
8 Startup Funding Sources To Raise Seed Capital
Angel Investor
Angel investors are high net-worth individuals (HNI) who are constantly looking to back the next 'big idea' at the earliest stage with their time, money, and expertise.
Angel investors work independently and thoroughly vet the startup before investing.
These accredited investors (with a net worth of Rs. 2 crores and above) identify promising startups at the earliest stage and invest in the equity stake in the startup.
The benefit of raising seed capital through Angel Investors–

• High net-worth individuals (lead investor)
• Risk-takers looking to financially back early-stage startups & passionate entrepreneur
• Adorn advisor role to help the startup streamline its operation
• Endorse startup ideas among their investor network to invite future funding

(In recent research conducted by Harvard Business School, startups backed by angel investors are more likely to remain in business longer, induce substantial growth, and reward a more significant return rate to their investors.)
Angel Syndicate
Angel syndicate is an investment group that enables investors to co-invest with accredited angel investors in promising startups.
Each syndicate is led by a prominent angel investor with vast experience identifying, vetting, and investing in promising startups.
Example – Angelist is the prime example of an angel syndicate where various angel investors co-invest with a prominent angel investor – Kunal Shah.
The benefit of raising seed capital from Angel Syndicate–

• Invests collectively to cover a significant chunk of ‘Funding in Ask’
• Both accredited & non-accredited investors can invest in the startup
• Industry leader with comprehensive knowledge

 
Angel Investment Platform
The introduction of angel investment platforms is a boon for startups that want to raise seed capital easily and securely. Angel investment platforms like POD introduce promising startups to its network of 2000+ accredited and retail investors to raise funds.

POD is built to enable startups to submit their pitch decks with 2000+ investors.

The benefit of raising seed capital from Angel Investment Platform–

• Both accredited and retail investors can invest in startups
• Financing mode available – equity and debt.
• Fully secure fundraising environment
• The high success rate of the fundraising campaign
• Total number of investors on the platform – 2000+

 
Venture Capital Fund
Venture Capital Funds are pooled investment funds of high net-worth investors who seek to invest in startups with some traction or revenue at the seed round. A Fund Manager manages this fund pool and decides on the startups to invest in.
The benefit of raising seed capital through Venture Capital Funds–

• Usually invests in startups with traction and revenue
• Invests heavy sums in startups
• Lead by one decision-maker (Fund Manager), who will seek a seat on the board

 
Crowdfunding
Crowdfunding is a creative way for startups to raise seed capital for their revolutionary idea. A startup can raise capital in exchange for equity, rewards, debt, or nothing at all.
The benefit of raising seed capital through Crowdfunding–

• Easier access to capital
• Startup gains early adopters and loyal advocates
• Doubles media exposure

If you’re keen to explore this option, here are the top crowdfunding sites in India for startups to raise funds.
 
Incubator
Incubators are organizations designed to launch and nurture early-stage startups by providing seed capital, mentorship, etc., in return for an equity stake in the company. In addition to that, they offer a wide range of support, including "accelerator" programs to accelerate the startup's growth by linking founders with experienced mentors and investors.
The benefit of raising seed capital through Incubators–

• Mentorship
• Exposure to industry leaders
• Access to professional resources

Here's the list of 10 Startup Incubation centers in India.
 
Government Grant
"It is an award of financial assistance in the form of money by the government to an eligible grantee with no expectation that the funds will be paid back."
Benefit of Government Grant–

• Easy access to funds
• Tax holiday for 3 years

Here's the extensive list of Government Grant Programs –

• List of government schemes to support startups in India
• List of initiatives by State Government

Check the eligibility criteria for the Government Grant available for Indian startups.
 
Bank Loan
Entrepreneurs usually don’t knock on the door of a bank for a startup loan before exploring other funding opportunities. Getting the funding when the business is in its early stage is a challenge. Still, if a startup can demonstrate the ability to repay, they can avail 'Startup Business Loan' from SIDBI (Small Industries Development Bank of India).
"More than 39,000 startups in India have access to private equity and debt funding options."
 
Conclusion
Irrespective of how exciting your startup looks on paper, it is imperative to decide the suitable method to raise seed capital. From the number of startup funding options listed above, weighing the pros and finding the right option for your startup is important.
Once you have chosen a funding option, create a professional pitch deck to present before investors.