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Challenges fuel India’s entrepreneurial potential, said Kunal Bahl, Co-founder, Snapdealand Titan Capital, at the TechSparks startup summit in Bengaluru on Saturday.

Highlighting India’s expanding startup ecosystem, he said, with a clever play of words, “We have mouth-watering opportunities but eye-watering challenges, and these challenges create the opportunities.”

The limiting factor in the country right now is capital and not the lack of bright minds or the willingness to hustle, said Bahl, in a candid fireside chat with YourStory Founder and CEO Shradha Sharma.

Despite the rise in the number of investors, founders continue to face challenges in accessing capital, he observed.

Emphasising the need for greater domestic investment in Indian startups, Bahl pointed out, “Last year, of all the capital that went into the Indian startup ecosystem, only 15% was domestic,” adding that 85% of the funds still come from foreign investors.

If capital becomes more available domestically, India can avoid the risk of capital scarcity which limits the growth of startups. The need is not 2X, 5X, or 10X but 100X more domestic capital to truly support the startup ecosystem, reiterated Bahl, who believes there is space for all types of investors in the country.

He encouraged individuals, regardless of their financial capacity, to invest in promising startups, adding that India is in a “golden era” with its youth and digital infrastructure offering unparalleled growth potential.

“Founders want to take capital from those who have built companies because they find those people a lot more empathetic,” remarked Bahl.

He also stressed that venture capital partners must be ready for the long-haul and not look at just a quick three-to-four-year flip for profits.

On government involvement, Bahl lauded initiatives such as the SIDBI Fund of Funds, but also urged for more aggressive funding strategies.

“We need Rs 10,000 crore to be invested annually in Indian startups, not over 10 years,” he said.