Raising funds is inevitably a matter of concern for any startup - no matter the sector it targets. In fact, convincing investors about the profitability and sustainability of one's business idea is the key to ensuring its conversion into reality. Thus, it is not surprising that alarm bells are ringing for entrepreneurship enthusiasts across the country as close to 30 startups funded by either Venture Capitalist (VC) firms or angel investors have reportedly closed down since the turn of the year.A quick number crunch reveals that the total funding into Indian tech start-ups for the first half of 2016 also saw a decline of nearly 40 percent from the funding secured last year.While the statistics do not lie, one needs to examine the data in greater detail to understand the true nature of investors. The apparent decline can be explained as a reflection of decreasing VC confidence in the Indian startup ecosystem, due to the prevalence of inefficient unit economics and unsustainable business models. There has been a worrying trend among India start-ups to believe that going through a long period of heavy losses is satisfactory, even desirable, to achieve growth.This confidence is based on a number of skewed notions, and does not take into account the fact that even when a new firm is giving itself time to grow, it needs to build on infrastructure and develop unmatched ground-breaking expertise. It is this lackadaisical attitude that has partially led to a number of startups closing down or having to shift focus to cash conservation and unit economics instead of pursuing growth.However, angel investment in tech-backed firms is on a rebound, even as VCs are being cautious. It is interesting to note that the same timeframe has been described as marked by a 14 per cent decline in VC investments as well as a sharp rise in angel and seed investments in India. Startups across the country have raised nearly INR 113.6 crore in angel investments through 69 deals so far in 2016.The cautiousness of VCs has, in fact, opened up space for smaller investors who may have not shown interest earlier during the time that three waves of venture capital swept the country. The year 2016 has witnessed a sizeable amount of angel investment interest in Indian startups, with funding hitting a five-year high, especially in support of tech-based innovative startups.The immense amount of potential and talent in the field of Indian technology is the reason behind continued faith - especially by individual investors - in the future of tech startups . A study conducted by Assocham, in association with the Thought Arbitrage Research Insititute, posited India as hosting the third largest number of technology-driven startups in the world behind USA and the UK at the top two spots. Bengaluru leads with the most tech startups, followed by Delhi NCR and Mumbai . With Hyderabad and Chennai also emerging as leading hotbeds for tech entrepreneurs, investors are finding more than enough reasons to fund paradigm-changing technology. The Delhi-National Capital Region is fast becoming the most preferred destination for angel investors, accounting for 36 per cent of the total deals. To add to this trend, business-to-consumer startups have attracted over two-thirds of angel group investments, with consumer internet, food and e-commerce as top sectors, reflecting India's place as one of the largest consumer markets in the global arena.A pleasantly surprising number of wealthy, Indian-origin foreign angel investors have recently been very enthusiastic about the Indian startup landscape. They have shown keen interest in getting involved with the existing Indian angel network groups. These investors prefer to fund disruptive and advanced tech startups like those dealing with artificial intelligence, virtual reality and machine learning, mainly because these sectors have a global reach. Their supervision and interest has helped startups get some international perspective for their business models.While VC firms have to be careful because of the number of people involved in decision-making processes, individual investors have the luxury of taking greater risks and trusting their instinct. Many high net-worth individuals have come to appreciate angel investments as a new asset class for funds. They mainly choose to invest in popular sectors like financial technology, though there are no hard and fast rules for such investments. The increase in the number of angel investors coming into the market has in turn also increased the valuation in angel rounds.The three aforementioned sectors of consumer internet (and mobile), e-commerce and food-tech startups have together accounted for about Rs. 48 crore, or 42 per cent, of the total angel investment. Meanwhile auto-tech ventures like CarTrade, CarDekho, Droom, Truebil and DrivoJoy, as well as many alternative lending ventures, have also become angel investment hotspots. Not only technology giants, but non-tech companies like Axis Bank , Barclays, Target Retail , Lowe, Disney, and Business World are also launching programs for startups.The government of India has also been incredibly proactive in boosting investment for tech startups. Initiatives, such as 'Start up India', 'Make in India' and 'Digital India', introduced by the central and state governments have not only fostered entrepreneurship in the country, but have also made investments into newer ventures more convincing for potential investors. The result has been a nearly 100 per cent growth in the number of private investors and investment firms operational in the country over the past one year.This active participation by the government has given a massive boost to the Indian early-stage investment landscape. Angel investors have also been attracted due to steps towards relaxed taxation and the increased accessibility of other resources for startups. In other words, the encouragement of fresh ideas and the lack of fear of financial failure has enhanced tech startups and in turn increased their chances of acquiring funds.To conclude, the decline in valuations projected by market experts and deal makers is not a simplistic alarming marker. It merely provides a moment for startups to reflect upon whether they are ready for a rather trying year in terms of funding. The way forward for tech startups is to keep up with the market's renewed focus on profitability and sustainable unit economics in place of traction and hyper growth.While most venture capital firms are choosing their decisions more carefully, startups do not need to lose hope in securing funds and instead take advantage of the angel investment rebound. Game-changing home-grown innovations that address global problems on a local scale are what are attracting support from wealthy individuals based overseas, be they foreigners or of Indian origin.(The author is co-founder & President of Venture Catalysts)