Startup India
An entity shall be considered as a Startup:
i. Upto a period of ten years from the date of incorporation/ registration, if its incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008)In India. ii. Turnover of the entity for any of the financial years since incorporation/ registration has not exceeded one hundred crore rupees.
iii. Entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.It has been established globally that startups are driving the economic growth of nations, creating employment, and fostering a culture of innovation. It is therefore incumbent on the Government of India to nurture emerging talent and entrepreneurship as part of the larger goal of Atmanirbhar Bharat. The objective is to make India a nation of job creators instead of just job seekers. The Government of India has been making efforts towards making the vision of the Startup India initiative a reality. Since the launch of the initiative in January 2016, several strategic amendments to the existing policy eco-system have been introduced.
Startup India is a flagship initiative of the Government of India, intended to catalyse startup culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India.
The Hon’ble Prime Minister of India, Shri Narendra Modi, announced the launch of “Startup India, Standup India” initiative on 15th August 2015. The Initiative aims at fostering entrepreneurship and promoting innovation by creating an ecosystem that is conducive to growth of Startups. Further to this, an Action Plan for Startup India Initiative was unveiled by the Hon’ble Prime Minister of India on 16th January 2016.
The initiative strives to provide a long-due impetus to the entrepreneurial setup in economic landscape of India.
A State’s Startup Policy is critical in providing the essential funding, mentorship, and market access support required by startups to grow as important contributors to the State’s economy in terms of revenue and job creation. Additionally, it also contains provisions to incentivise key startup stakeholders such as incubators, and institutions of higher education among others so as to promote holistic development for India’s startup ecosystem. The Startup India team provides active support to States in formulation and operationalization of their startup policies.
Stages of Startups
Ideation
This is the stage where the entrepreneur has an idea and is working on bringing it to life. At this stage, the amount of funds needed is usually small. Additionally, at the initial stage in the startup lifecycle, there are very limited and mostly informal channels available for raising funds.
Pre-Seed Stage
Bootstrapping/Self-financing:
Bootstrapping a startup means growing the business with little or no venture capital or outside
investment. It means relying on your savings and revenue to operate and expand. This is the first
recourse for most entrepreneurs as there is no pressure to pay back the funds or dilute control of your startup.
Friends & Family
This is also a commonly utilized channel of funding by entrepreneurs still in the early stages. The major benefit of this source of investment is that there is an inherent level of trust between the entrepreneurs and the investors
Business Plan/Pitching Events
This is the prize money/grants/financial benefits that are provided by institutes or organizations that conduct business plan competitions and challenges. Even though the quantum of money is not generally large, it is usually enough at the idea stage. What makes the difference at these events is having a good business plan.
Validation
At this stage, a startup has a prototype ready and needs to validate the potential demand of the
startup’s product/service. This is called conducting a ‘Proof of Concept (POC)’, after which comes the big market launch.
Seed Stage
A startup will need to conduct field trials, test the product on a few potential customers, onboard
mentors, and build a formal team for which it can explore the following funding sources:
Incubators:
Incubators are organizations set up with the specific goal of assisting entrepreneurs with building and launching their startups. Not only do incubators offer a lot of value-added services (office space, utilities, admin & legal assistance, etc.), they often also make grants/debt/equity investments. You can refer to the list of incubators here.
Government Loan Schemes
The government has initiated a few loan schemes to provide collateral-free debt to aspiring
entrepreneurs and help them gain access to low-cost capital such as the Startup India Seed Fund
Scheme and SIDBI Fund of Funds. A list of government schemes can be found here.
Angel Investors
Angel investors are individuals who invest their money into high-potential startups in return for equity.
Reach out to angel networks such as Indian Angel Network, Mumbai Angels, Lead Angels, Chennai Angels, etc., or relevant industrialists for this. You can connect with investors by the Network Page.
What is Startup India Seed Fund Scheme?
Startup India Seed Fund Scheme (SISFS) provides financial assistance to startups for proof of concept, prototype development, product trials, market-entry, and commercialization. Eligible startups can apply for the scheme on the Startup India portal. The Seed Fund will be disbursed to selected startups through eligible incubators across India.
Government of India through its various Central Ministries and PSU’s have undertaken numerous initiatives to foster innovation and develop a culture of entrepreneurial mindset. These initiatives have been both in policy form and other affiliated support to the ecosystem. The Compendium of Startup Specific schemes has been developed by Startup India, DPIIT with the following objective:
– To create a knowledge repository of Government Schemes and Policies specifically benefiting directly or indirectly to the Startup Ecosystem – To share different policies/schemes/initiatives taken by different Ministries/Departments/CPSUs regarding the Startup Ecosystem with all
ministries, departments and CPSUs
– To encourage Ministries, Departments and CPSUs to take up more policy initiatives to foster innovation and support the Startup Ecosystem of the country