Authors:
Rakesh Kumar Gupta, Bhopendra Singh, Sonia Singh, Pranav Mishra

Addresses:
School of Management, Dr. B. R. Ambedkar University Delhi, New Delhi, Delhi, India. Department of Engineering, Amity University Dubai, Dubai, United Arab Emirates. Department of Management, Toss Global Management, Dubai, United Arab Emirates. Department of Management, Lingaya’s Lalita Devi Institute of Management and Sciences, New Delhi, Delhi, India.

Abstract:

Over the last ten years, India has become one of the biggest places in the world for start-ups, with more than 100 unicorns in the technology, finance, EdTech, and consumer markets. Equity funding has historically fueled rapid growth, but issues of dilution and valuation volatility are increasingly apparent. In contrast, venture debt offers a notable alternative, providing non-dilutive financing that helps companies extend their financial runways and stabilise growth. This study examines how Indian unicorns navigate financing options, including equity, debt, and hybrid models. The research employs a qualitative-dominant mixed-methods methodology, using semi-structured interviews with founders, venture capitalists, and analysts, along with secondary data from relevant sources and industry studies. Thematic coding documented leadership views on financing trade-offs, subsequently corroborated by comparative case studies and sectoral funding trends. Findings reveal that equity-heavy firms scale rapidly, but experience valuation volatility and governance dilution; debt-heavy firms preserve ownership but face repayment risks; and hybrid models offer a balanced pathway, particularly for IPO readiness. Sectoral variations show Fintech and SaaS as debt-ready, EdTech and E-commerce as equity-dependent, and logistics as hybrid adopters. The research finds that financing choices depend on the stage and sector. Implications encompass pragmatic tactics for founders in capital structuring, directives for investors to harmonize governance procedures, and policy recommendations to enhance India's venture debt ecosystem through regulatory and institutional support.

Keywords: Venture Debt; Equity Financing; Financial Risk; Debt-Equity Ratio; Hybrid Financing Models; Policy Implications; Capital Structuring; Investor Governance; Sectoral Variations.

Received on: 25/04/2025, Revised on: 02/08/2025, Accepted on: 23/10/2025, Published on: 03/01/2026

DOI: 10.69888/FTSTPL.2026.000634

FMDB Transactions on Sustainable Technoprise Letters, 2026 Vol. 4 No. 1, Pages: 48-59

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