“We cannot all succeed when half of us are held back,” said Malala Yousafzai. This saying is quite relatable today for startups as well. Women founders and deep‑tech teams face distinct barriers. These include long development cycles and heavy capital needs for limited investor networks. 

This blog explores whether government venture capital schemes meaningfully help them. We have examined funding trends affecting women startup funding India. We have discussed the strengths and limits of public VC. Also, we found that combining public support with private angel investors for startups and mentorship might be the best way to move forward.

What Are Government VC Funds India/Public-Backed VC Schemes?

Government VC funds are investment vehicles set up or supported by public bodies. They invest money into startups and fund managers. They can be wholly public, or public money can sit alongside private capital. In some cases, programs explicitly aim to support women founders India VC schemes and other underrepresented groups.

The aim is to reduce risk and build capacity in priority areas. In India, examples include state government VC funds, the Startup India Seed Fund Scheme (SISFS), and sectoral programmes. These schemes often provide patient capital deep tech. This means they invest money that can wait longer and take on more risk for research and development.

If investor meetings are coming up, prepare this quick checklist of questions you can ask VCs.

Why the Focus on Women Founders and Deep‑Tech?

India’s startup scenario now has many deep‑tech firms, but funding has fallen sharply. Reports show deep‑tech deal counts rose while funding dropped nearly 77% in 2023. To get a snapshot of how investors are acting in AI and related areas, read our brief on why VCs are chasing AI deals.

Women’s participation on boards and as founders is improving. Over 73,150 startups now have at least one woman director, showing greater involvement. 

Why does this matter?

1. Persistent funding gaps: Venture capital to women-led deep tech startups remains low and has declined. This shows the continued funding inequality women startups face, which public schemes try to address.
2. Impact on innovation: Diverse leadership plus deep technical capability drive long‑term growth. Underfunding these teams risks slower commercialisation and fewer breakthrough products.

What Are the Current Funding Gaps and Key Barriers?

Deep‑tech startups face a distinct financing profile and a set of structural obstacles that differ sharply from consumer‑facing companies.

Deep‑Tech Challenges

1. Long timelines and big capital needs: Deep‑tech firms work on hard science and hardware. That takes more time and money than consumer apps. Investors often refer to this as the funding divide between deep tech vs consumer startups funding gap. For more on these resource demands, read our analysis of why AI startup building costs are rising.
2. Risk and expertise: Many private VCs prefer faster exits. They may lack the sector expertise to judge deep technical work. That’s why some founders are looking for venture capital for deep tech in India. They focus on long-term scientific advancements.
3. Infrastructure and regulation: Products often need lab space, testbeds, and clear rules before they can scale.

Barriers for Women Founders

1. Lower funding share: Women‑led startups received a small share of VC funding in 2023.
2. Network gaps and visibility: Women founders often get less access to investor networks and introductions. So, targeted programmes aim to improve capital allocation for underrepresented founders.
3. Program design: Some schemes don’t specifically reduce bias or encourage follow‑on private investment.

What Are the Current Funding Gaps and Key Barriers?

Public and targeted funds are an important strength for women‑led and deep‑tech startups. But design limits and execution gaps mean they often fall short of creating reliable scale pathways. Below is a concise view of their strengths and weaknesses:

Strengths:

1. Mandates and targeted funds: Some public funds set targets for women founders or create women‑focused funds. Examples include state funds and specialised players like SheCapital. This can raise awareness and build a pipeline for women startup funding India and other initiatives.
2. Patient capital and risk tolerance: Publicly backed funds can accept longer timelines. That suits deep‑tech firms that need years to commercialise.
3. Combined support beyond cash: Schemes can combine grants, seed capital and access to labs or incubators. That blend helps early deep‑tech projects speed up. It also boosts the case for deep-tech startup funding India. It ties capital to technical infrastructure and pilot opportunities.
4. Market signal and crowding‑in: When the government backs a startup, it reduces risks. This makes private investors more willing to jump in. This is important for women‑led teams and deep science projects.

Weaknesses and Limits:

1. Scale and follow‑on capital: Many government funds are small compared to the private markets. They may fund initial stages, but lack deep pockets for later rounds. This is the core part of the bridging funding gap startups challenge. 
2. Speed and bureaucracy: Slow approvals and heavy compliance harm fast decision-making. Startups need timely capital; delays hurt product development.
3. Domain expertise gaps: Public fund managers sometimes lack specific sector knowledge. That can lead to poor selection or weak support for complex tech.
4. Lack of private sector coordination: If private investors don’t co‑invest or follow on, startups face a funding cliff. Government money alone rarely builds entire growth paths. 

How Founders Can Use a Government Venture Capital Scheme Well?

Government VC schemes and public seed programs can help reduce risks for deep-tech startups. However, you, as a founder, should see them as just one part of a mixed capital strategy.

1. Know the schemes and their goals: Research eligibility and terms. Some programmes prefer early‑stage seed grants, others take equity. Start with official portals like Startup India and state government sites. Also review market signals and programmes focused on deep-tech startup funding India. This helps you to understand where technical infrastructure support is most available.
2. Build a tailored application: Show real milestones, not vague vision. For deep tech, explain the market use, milestones for prototypes, and the team’s credentials.
3. Explain capital needs and timelines: Use clear budgets and timeline charts. Show how grant or seed capital unlocks the next stage, and where private follow‑on will come from.
4. Mix public money with private investors: Use public funds to de‑risk the project. Then seek angel investors and VCs to follow‑on rounds. This is important when government funds cannot scale with you.
5. Showcase customers and validation: For deep tech, pilot projects, testbeds and industry partners matter more than early revenue. Document these validations.
6. Use mentors and networks: Public schemes often give access to incubators, mentors and labs. Take that help. Strong mentorship makes technical plans investor‑friendly.

Stop Chasing Grants Alone – Get Strategic Funding Support Today!

Government grants for deep tech startups aren’t a cure‑all. They’re a strong tool when well-funded and run with domain experts. A government venture capital scheme can help women founders and deep-tech innovators. It helps reduce early risks and paves the way for private capital. However, slow processes and a lack of scale and domain expertise limit the impact.
At Gaurav Singhvi Ventures, we advise founders to combine public funds with private angels and experienced mentors. If you want personalised funding and hands-on guidance, contact us today for support.