Citation :

Yuvraj Surana, "Factors Affecting Startup Funding and Market Performance in India," International Journal of Humanities and Social Science, vol. 13, no. 3, pp. 109-116, 2026. Crossref, https://doi.org/10.14445/23942703/IJHSS-V13I3P110

Abstract

The Startup ecosystem in India has its multidimensional constraints that affect the performance of the Startup in the market and its sustainability. The purpose of this study is to understand the relationship between the four different types of challenges that startup companies face ( Financial Pressure, Strategic & Investor Relations, Operational & HR Challenges, External Environment Risk) and the effect on the Market Performance Constraints that the startups face in India. With a quantitative and cross-sectional research design, the study was completed in various startup hubs of India, such as Gurugram, Bengaluru and Mumbai. Primary data is collected with a structured Likert scale questionnaire from 384 Founders and Senior managers of Early to Growth stage Startups. Confirmatory Factor Analysis (CFA) was used to analyse the data in the JASP software, and the Diagonally Weighted Least Squares (DWLS) estimator was used for ordinal Likert data. The results support the 5-factor structure, which is statistically significant as a model (χ²(269) = 574.120; p < .001; KMO = 0.670), and the latent constructs of External Environment Risk and Market Performance Constraints are well identified. Key indicators showed strong and significant factor loadings reflecting the mechanisms through which the macro-environmental volatility and strategic deficiencies manifest as constraints. The substantive relevance of these findings is for the entrepreneurial policy, investor engagement structures and startup support system in emerging economies. The study adds to the existing body of empirical literature on startup failure and market constraints in India by proposing a validated measurement model that can be expanded to structural equation modelling or longitudinal research.

Keywords

Brand Awareness, Confirmatory Factor Analysis, Financial Constraints of A Firm, Jasp, Market Performance.

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