Start-up India – Stand-up New India

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Sundays are usually the days where one can indulge self into some old activities which have been lost to so-called shortage of time. And so, as we all know, old habits die hard. So, since past few Sundays, my reading habit has allowed me to understand about start-ups and the environment in India.

How do start-ups work in India?

Well, start-ups in India, work in India in the same way as in any other country.

It all starts with an idea.Then you try to visualise the idea in totality. Totality here means you work on the product/service; understand the challenges in the implementation. Being an entrepreneur isn’t easy. You have to understand each and every aspect of the business and need to have smart people for the same areas.“Having the right team isn’t just essential to get a company off the launch pad: it will also enable entrepreneurs to keep things stable as their enterprise leaves the atmosphere. Without those people, you’re not going to last very long,” says Joel Hughes, head of the UK and Europe at Indiegogo, the crowd funding platform.

If you have a good product/service but you can’t sell it, it will die in the shelf itself.And selling starts the day when you seek resources for your product to be marketable.You can only sell something when you are convinced about it right down to your heart. You accept and place yourself in the centre of that ecosystem you are trying to create.

What next?

The next obvious step is to arrange resources/funds.

The first option should be to look into our own personal (family, friends, relatives etc.) resources in the first place. Also known as Bootstrapping, the funds are available almost free of cost and if the business is small, it is a very good option. When you have your own money invested, you are more tied to your business.

Then there are other options such as – Crowd funding, Private equity, Venture capitalists, Angel investment, Financial institutions, Business incubators, Government offers for start-up capital, etc.

Crowd funding – An entrepreneur will put up a detailed description about his start-up on a crowd funding platform.The interested people can pledge or donate or pre-book in case of a product in order to help the start-up generate money.

Private equity firms (PE), venture capitalists (VC), and angel investment - These are moreover same type of investors. The kind of investment made by these is the differentiating factor. Angel investors invest small amount as compared to VCs and PE firms.

Government initiative for start-ups – This section needs specialemphasis as the government has been active on this front and has initiated Startup India on a national level in 2016. As per their website, they have funded 75 start-ups so far.This is much needed so as to provide support to the growth of economy.

As per the website, if you have a start-up which is less than 7 years old, registered asa Pvt Ltd or LLP, working towards innovation, development or improvement, not formed by splitting up existing co., and turnover less than 25 crores in any F.Y., it can be registered as a part of the start-upand can avail benefits under the schemes. For any budding entrepreneur, one needs to visit this website as there are some good benefits.

Benefits?

Self-Certification

Startup Patent Application

Public Procurement

Public Procurement

Winding up Company

INR 10000 Crore Fund

INR 2000 Crore Credit

Tax Exemptions

Some more details about the benefits are –

The Ministry of Human Resource Development (HRD) and the Department of Science and Technology have agreed to partner in an initiative to set up over 75 startup support hubs in the National Institutes of Technology (NITs), the Indian Institutes of Information Technology (IIITs), the Indian Institutes of Science Education and Research (IISERs) and National Institutes of Pharmaceutical Education and Research (NIPERs).

The start-ups can be registered via website or mobile app. People interested in setting up a start-up can fill up the form on the website and upload certain documents. The entire process is completely online.

If a start-up applies for a patent, the government will give rebate of 80% in the fees and will also pay fees of the facilitator for helping the start-up obtain the patent. Faster patent registration and protection for Intellectual Property Rights (IPRs) is provided under the Scheme. The start-up only has to expend the statutory fee.

Under the Scheme, Income Tax exemption is available for first three years if the certificate is obtained from the Inter-Ministerial Board, setup for this purpose.

Investing the capital gains in government recognised funds will get exemption from capital gains.

Assistance for fund raising will be provided via fiscal incentives for a start.

Research & Development, Human Capital Development support via 7new Research Parks to provide facilities to start-ups.

Start-ups can close its business within 90 days from the date of application of winding up.

The government has proposed start-up fests to provide networking opportunities as well as it will help develop mentor network.

Stand-Up India

Stand-up India is a scheme which facilitates bank loan between Rs. 10 lakhs and Rs. 1 crore to at least one SC or ST borrower and atleast 1 woman borrower per bank branch for setting up a greenfield enterprise. In case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held by either an SC/ST or woman entrepreneur.

The state governments have also been active and have been supporting start-ups in their respective states. For example –Odisha is providing monthly sustenance allowance of Rs 20,000 for a year to start-ups, free legal consultation,etc.Keralahas collaborated with the Massachusetts Institute of Technology’s Fab Academy to encourage entrepreneurship right from the school and college level. The state has established Fab Labs in 20 colleges.

More details can be found on the respective states’ websites.

Where are we headed now?

In India, technology is disrupting legacy business models and creating software-enabled sectors that have never existed before.

The benefits of Start-up and Stand-up India will also take time to show the much-needed guidance for futurestart-ups.

The Governments (Central and States) have been continuously working for creating a better ecosystem for start-ups as they also understand how start-ups will help them reduce their job market woes.

“All significant inventions and innovations in history were done by individuals, not corporations,” says Dr BibekDebroy, Chairman of the Economic Advisory Council at the recent National Summit by Confederation of Indian Industry. All efforts, therefore, must be to empower the individual to not only realise the innovation but also commercialise it. So far, the focus of the supportive ecosystem for start-ups has been on a corporate entity.”

All in all, to sum up, I feel start-ups are like love marriage. Everything looks all hunky and dory before getting married, but if you haven’t thoroughly thought out about post marriage, even your honeymoon could land into rough waters.