The Hardest Part of Building a Startup Comes After Seed Funding

India's startup ecosystem has a clear gap, and it sits right in the middle. The country counts over 2 lakh registered startups, the third-largest pool in the world. MSMEs contribute roughly 31% of GDP and employ more than 300 million people. Those numbers show real momentum. But the support infrastructure that got the ecosystem this far has not kept pace with one critical stage: the growth phase.

ASCENT Foundation CEO Sagar Gosalia laid out the problem in a recent piece for Mint. The early stage, he wrote, benefits from a developed network of incubators, seed funds, and government schemes. The late stage, with its established businesses, has institutional capital and policy access. The growth-stage founder falls between those two poles largely alone.

That founder has crossed proof of concept, built a team, found a market, and generated meaningful revenue. Seed funds and incubators are no longer relevant. Institutional support structures have not yet kicked in. The challenges at this point, Gosalia said, are the hardest founders will face in the entire arc of building a business.

This is not a small population. It is the backbone of the Indian economy, and it is consistently underserved. The early stage offers clarity: the founder is close to every decision, every customer, every hire. The late stage brings clarity of systems and structure. The middle chapter has neither.

At this stage, the team has grown large enough that the founder can no longer oversee everything, but not so large that proper processes have taken hold. The product has found a market, but scaling it requires a different kind of thinking than building it did. Leadership challenges shift from hiring the first few people to building a culture that holds as the organisation grows. The founder, once energised by early momentum, now navigates problems that are harder to articulate, harder to benchmark, and harder to get good counsel on.