Best Country to Start a Startup: What Indian Founders Should Know

If you’ve spent even five minutes in an Indian tech WhatsApp group, you know the same question pops up: Where’s the best place to launch a startup? People usually toss out India, the US, Singapore, or maybe the UK. What’s not so obvious is what actually makes one country better than another—especially if you’re dreaming of big funding rounds, easy setup, and a clear path to scale.

Look, startup founders care about sweat equity, but money talks. The first thing most folks want is straightforward: where do you get funding without fighting a mountain of red tape or getting buried in paperwork? Some places throw cash at startups, while others just throw rules at them. There’s no one-size-fits-all, but you don’t want to get blindsided by regulations or hidden fees that turn your dream into a slog.

But here’s something people miss: what works for someone in San Francisco might not work for someone in Bengaluru. Local investors, government programs, visa rules—even the way people tackle failure—play a huge role in the real-life startup grind. You need to know how India’s wild boom compares to older hotspots and what’s actually working for Indian founders now.

• Why India Still Draws Startup Dreamers
• How India Compares to Global Favorites
• The Real Funding Landscape for Indian Startups
• Smart Tips for Launching Beyond Borders

Why India Still Draws Startup Dreamers

Let’s get this out of the way: India’s startup scene is hotter than a Delhi summer. You’ve got more unicorns here than most people have matching socks. As of June 2025, India’s booming with over 120 unicorns (that’s startups valued at over $1 billion), only trailing behind the US and China.

But unicorn numbers aren’t everything. The startup funding India ecosystem has seen a real explosion because there’s a weird but awesome mix: young population, digital adoption, and government support. Over 900 million people are online. That means customers aren’t just in big metros—they’re in smaller cities too, and founders love that reach.

Certain things make India’s startup playground unique:

• Large, hungry market: India adds more internet users every month than many countries even have. This means fresh business ideas can scale fast—if they solve real problems.
• Government boost: Initiatives like ‘Startup India’ make it much easier to register a new business and offer tax breaks plus easier compliance. The government even matches up funding in some cases.
• Funding networks: It’s not just the Sequoias or Tiger Globals. Indian VCs and angel networks are everywhere now, from Mumbai to Bengaluru. Homegrown funds specifically focus on early-stage startups.

Here’s a breakdown of the current scene so you know what’s real and what’s just buzz:

The one thing you notice if you’ve been to a coworking space in Hyderabad or Gurugram is the energy—everybody’s building for India’s next billion. And while investors love big growth stories, even smaller SaaS and fintech companies get real support here. Just don’t expect the path to be smooth: there’s bureaucracy, talent wars, and sometimes copycat competition the minute you get traction. But the upside? Nowhere else gives you a shot at a billion users quite like India does right now.

How India Compares to Global Favorites

Everyone loves to hype India’s startup boom—over 100 unicorns by mid-2024 and counting. But is India really the top spot, or are founders better off jumping to hotspots like the US, Singapore, or the UK?

Let’s get practical. Here’s a snapshot of what actually matters for founders: ease of business setup, funding access, taxes, and the community vibe. Now, check out how India stacks up against the usual suspects:

India’s startup scene is buzzing. Homegrown unicorns like Zerodha, Razorpay, and Swiggy have created a big push so even small towns are starting up. The dark side? Slow bureaucracy (registering a new business still takes far longer here), confusing tax rules, and yes, the infamous paperwork. Compare that to Singapore, where you can almost set up your company with your morning coffee.

What about funding? Indian angel networks and VCs have grown, and government funds like Startup India give a real boost. Still, most seed cheques here are much smaller than what you’ll land in the US or even Singapore. The bigger investors sometimes still want revenue and traction even at early stages—which is a pain if you’re pre-launch.

“If you’re after raw cash and deep-pocketed VCs, Silicon Valley is still king. India is best if you’ve cracked the local market and want to scale at home before going global.” — Rajan Anandan, Managing Director, Peak XV

One thing you can’t ignore: Indian regulations. There’s stuff like FEMA, complex FDI rules, and random banking limits on sending money out of India. Founders who want to target global markets often set up in Singapore or Delaware (US) just to make investor life easier. The catch is higher living and business costs overseas. Singapore isn’t cheap, neither is California, and London beats them both for cost of living.

• If you want a big, fast-growing customer base and lots of local support, India is strong.
• If you want the biggest *strong>*VC funding India* rounds and smooth international business, US or Singapore still win on pure efficiency.
• If global expansion is your game, consider a parallel setup: product team in India, holding company in Singapore or Delaware. Tons of YC and Sequoia-backed founders do exactly that.

Cut through the noise: India’s still the rising giant, but founders looking abroad aren’t just chasing hype—they’re looking for ease, bigger funding, and a simpler exit if things blow up (in a good way).

The Real Funding Landscape for Indian Startups

If you ask around, most Indian founders will say the funding scene is nothing like it was ten years ago. India’s startup ecosystem has gotten a massive boost, and it’s not just big cities like Bengaluru and Mumbai grabbing the attention. Smaller cities like Jaipur, Ahmedabad, and Kochi are seeing serious action too. This means you don’t have to be in one specific city to get investors to look your way.

Here’s what matters today: VCs and angel investors in India are more active than ever, and even big names like Tiger Global and Sequoia have been betting on early-stage Indian startups. In 2024, Indian startups pulled in roughly $8 billion in funding—way less than the $34 billion peak from 2021, but a lot of that was just the market cooling off after the crazy pandemic rush. More telling than the headline numbers is where the money’s coming from and what investors want now.

Most new funding goes to sectors like fintech, edtech, healthtech, and SaaS companies. Investors are more careful with cash, looking for real revenue early, and proof that users keep coming back. It’s worth noting that the government is pushing a lot of grant money and tax perks through programs like Startup India and the Fund of Funds scheme. Banks and NBFCs are getting involved too, though the ticket sizes can be smaller.

Check out this quick rundown of the 2024 funding scene for Indian startups:

Dealing with regulations or setting up is a lot smoother than before. Incorporating as a private limited company can take as little as two weeks. The bigger hassle can be getting foreign money in, since India’s FDI rules are strict and paperwork-heavy, especially for startup funding india from overseas angels or VCs.

• Don’t count on just one kind of funding—mix grants, loans, angels, and maybe even friends or family, especially at the start.
• Pitch decks can’t just ‘sell hope’ anymore. Have solid numbers, a working product, and early customer feedback before chasing anyone with a logo on LinkedIn.
• Keep an eye on state government schemes outside the major metros. Sometimes, those are less crowded and easier to access.

One thing I learned from my friend who scaled a SaaS platform in Pune—don’t ignore small cheque sizes from early-stage VCs. When you’re bootstrapping, even a $30,000 or $50,000 investment with less paperwork can keep things running without giving up too much of your company.

So, yes, money is there. Just expect to work harder for it, keep receipts ready, and always read the fine print.

Smart Tips for Launching Beyond Borders

Going global sounds cool, but the startup grind gets real once you stare at paperwork, costs, and rules in another country. The days of moving to Silicon Valley just because it’s famous are gone. Borders matter less, but details matter more.

Banks, investors, and even HR run differently once you cross out of India. If you want to make the most of opportunities abroad, here’s what you need to lock down first:

• Open-Access Markets: Many Indian founders like Singapore because there’s hardly any capital gains tax for startups, and you can own 100% of your company as a foreigner. The setup can take less than four days and costs around S$300.
• Funding Networks: The startup funding India scene is now attracting global VCs, but access is still different from the U.S., where seed rounds are usually double the size. Example: The median seed round in the U.S. was about $2.5 million in 2024, while in India, it hovered closer to $1 million.
• Legal Stuff: Pay attention to company structure—Delaware C-corp is almost standard for global startups, but countries like Estonia have e-residency programs to start and run a business remotely, no relocation needed.
• Remote & Dual Entities: It’s not rare for Indian founders to register overseas for “global” access while keeping R&D in India to save on payroll. Just know that your home country might still want its share of your taxes. Talk to a CA who knows about double taxation treaties.

You can see in the table below how easy or tricky it is to launch in popular startup countries:

One last thing: don’t skip talking to founders who actually moved or set up abroad. Reddit, LinkedIn DMs, or even startup subreddits are full of folks who’ll spill what went wrong or right. When Cora and I looked at options for our side project, random founder stories saved us more than some pricey consultants did.

Bottom line—don’t pick a country just because it’s trendy. Run the numbers, check the fine print, and always double-check how funds move in and out. The right move is the one that fits your product, your team, and your growth plan.