How to take funding learning from Startup India Stand-up govt theme

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CONTENTS

• Introduction • Eligibility for Start up• Action plan of startup of India • Registration Process • Supporting documents with application• Sources of funding • Incentives• Benefits & Advantages to startups• Opportunities • Challenges • Current Scenario of Start up India


INTRODUCTION

• Startup India is a flagship initiative of the Government of India aims, to empower the startups, to grow through innovation and design.

• It was first announced by Prime Minister Mr. Narendra Modi on 15 th August, 2015 which has been launched on 16th January, 2016.

• It’s motto is to shift from job seeker to job creator, in order to meet the objectives of initiatives.

• It is intended to build a strong eco-system for nurturing innovation and Startups in the country that will drive sustainable economic growth and generate large scale employment opportunities.

• Its an support from government in implementation of ideas of the people.• The Government has also introduced a mobile app on 1st April, 2016 to provide easy

registration, tracking the status of registration applications, downloading the registration certificates, filing for compliances, applying for various schemes etc.


ELIGIBILITY FOR STARTUP

Be incorporated or registered in India not prior to 5 years

Not have turnover exceeding Rs. 25 crores in any of the preceding financial years

Entity Should

Be working towards innovation, development, deployment or commercialization of new products, processes or services driven by technologies or Intellectual property

Limited liability Partner

ship

Private limited company

including OPC

Registered partnership

firm

Forms of Entity

Note: Entity shouldn’t have been formed by splitting up or reconstruction of a business already in existence.


ACTION PLAN OF START UP INDIA

• Self-Certification - The start-ups will adopt self-certification to reduce the regulatory liabilities. The self-certification will apply to laws including payment of gratuity, labour contract, provident fund management, water and air pollution acts.

• Startup India Hub - An all-India hub will be created as a single contact point for start-up foundations in India, which will help the entrepreneurs to exchange knowledge and access financial aid.

• Rolling- out of Mobile app and portal – An online portal, in the shape of a mobile application has been launched on April 1, 2016 to help start-up founders to easily register.

• Patent protection & rebate – A fast-track system for patent examination at lower costs is being conceptualised by the Central Government. The system will promote awareness and adoption of the Intellectual Property Rights (IPRs) by the start-up foundations. A rebate amount of 80 percent of the total value will be provided to the entrepreneurs on filing patent applications.

• Providing Funding – The government will develop a fund with an initial corpus of Rs 2,500 crore and a total corpus of Rs 10,000 crore over four years, to support upcoming start-up enterprises. The Life Insurance Corporation of India will play a major role in developing this corpus. A committee of private professionals selected from the start-up industry will manage the fund.


Contd.

• National Credit Guarantee trust Company – A National Credit Guarantee Trust Company (NCGTC) is being conceptualized with a budget of Rs 500 crore per year for the next four years to support the flow of funds to start-ups.

• Capital gain tax exemption - At present, investments by venture capital funds are exempt from the Capital Gains Tax. The same policy is being implemented on primary-level investments in start-ups.

• Income tax exemption – Start-ups would not pay Income Tax for three years. This policy would revolutionize the pace with which start-ups would grow in the future.

• Building entrepreneurs - Innovation-related study plans for students in over 5 lakh schools. Besides, there will also be an annual incubator grand challenge to develop world class incubators.

• Atal Innovation Mission - The Atal Innovation Mission has been launched to boost innovation and encourage talented youths.

• Setting up incubators - A private-public partnership model is being considered for 35 new incubators and 31 innovation centres at national institutes.


Contd.

• Research Parks - The government plans to set up seven new research parks, including six in the Indian Institute of Technology campuses and one in the Indian Institute of Science campus, with an investment of Rs 100 crore each.

• Entrepreneurship in biotechnology - The government will further establish five new biotech clusters, 50 new bio incubators, 150 technology transfer offices and 20 bio-connect offices in the country.

• Legal Support & easy rules - A panel of facilitators will provide legal support and assistance in submitting patent applications and other official documents. Norms of public procurement and rules of trading have been simplified for the start-ups.

• Faster exit - If a start-up fails, the government will also assist the entrepreneurs to find suitable solutions for their problems. If they fail again, the government will provide an easy way out.


REGISTRATION PROCESS


An application for being recognized as a startup and for availing certification should be supported by:

SUPPORTING DOCUMENTS WITH APPLICATION:

Note: If any recognition is found to be obtained without uploading the document or uploading any other document or a forged document, the concerned applicant shall be liable to a fine which shall be 50% of paid up capital of the startup but shall not be less than Rupees 25,000.


SOURCE OF FUNDING

Funding

Incubators Escalators Angel Investors

Incubator is a company that helps new and startup companies to develop by providing services such as management training or office space

Escalator is also a source of funding which helps in successful running as well as in the growth of the Company

Angel Investors are those high net-worth individuals who invests in high potential startups at an early stage based on idea and team qualifications

In case, startup is registered under the MICRO, SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ACT, 2006, then from: • Ministry of Micro, Small And Medium Enterprise• Small Industries Corporation (NSIC)• Small Industries Development Bank of India• Mudra Bank (Micro Units Development & Refinance Agency Limited)• Other Commercial Banks


INCENTIVES

Incentives by RBI

Foreign venture capital able to invest into all startups irrespective of the sectors subject to not operating in

prohibited sectors.

Simplification of the process for dealing with delayed reporting of Foreign Direct Investment


BENEFITS TO STARTUPS

Benefits

Compliance through self-certification

Legal support and patent examination at lower cost

Relaxed norms for public procurement

Funding support and incentives

Faster Exit


ADVANTAGES

• Tax Benefits :• Income Tax (exemption for 3 years)• Capital Gain Tax (exemption for 3 years)

• Building skills and job creation• Building entrepreneurs • Launch of Atal Innovation Mission (AIM) with Self-Employment and Talent Utilization

(SETU) Program• Single window clearance even with the help of mobile app• 80% reduction in patent registration fees• Fast track mechanism for patent application• No inspection for 3 years of start up business in respect of labour, environmental law

compliance, post self certification.• Easier norms for start up to exit within 90 days


OPPORTUNITIES UNDER START-UP

• Demographic Dividend: India has a unique set of problems that needs innovation, to originate out of the country. Each problem provides a unique opportunity for startups to solve some pressing issues and at the same time crate a business around it.

• Large population: India with over a billion people, present a very large home market for any goods and services. Startups look to service a cater to the large population in solving a pain point or providing a utility in one of the worlds most important consumer markets, stand to do well

• High mobile penetration: growth in mobile penetration is transforming the way businesses and consumers communicate and work with data enabled mobile phones, the vary nature of startups and businesses have change. Ex. Startups that develop mobile app, now have an ever increasing market to cater to.

• Work opportunities: More work opportunities in IPR Departments by way of registration of IPR of upcoming start ups and in secretarial departments including the litigation work of legal department by way of dealing with the cases of Fast Exit Route under Insolvency and Bankruptcy Act and also adding up of a new work related to the listing of small and medium on institutional trading platform.


CHALLENGES• Cultural challenges: Doing a startup is tough and every country seeks more failure than

success. However, culturally we are not groomed to fail and failure is frowned upon.

• Mentoring: Having a brilliant idea is different from that idea of business success. Doing a startup is perilous and often a lonely journey. Having a co-founders does not mean possessing the business acumen to succeed.

• Policies: The government’s role has been so far limited to giving out grants and loans, but without an effective enabling environment, implementation is far of the target.

• Funding: Capital and access to capital has been a perennial problem for startups. While, of late angle investors , venture capital and private equity have brought success to some extent, a large no. of startups still grabble to raise funds from institutional setups.


CURRENT SCENARIO OF STARTUP INDIA• Mobile app has been launched on April 01, 2016.• Various notifications have been notified by the Ministry of Commerce and Industry:-

• Few decisions on Startup Applications considered by the Inter Ministerial Board for Startup in its first meeting on 16th May, 2016 are as follows;

• Notification dated April 22, 2016 for Constitution of Inter-Ministerial Board• Re-Categorisation of Industries a landmark decision, new category of white industries

will not require environmental clearance;• Relaxation of Norms for Startups and Micro & Small Enterprises in Public Procurement

on Prior Experience - Prior Turnover criteria;• Self Certification compliance on labour laws and Environmental laws covers under

entity of Startup;

Name of Entities Decisions

Cygni Energy Private Limited, Hyderabad approved to provide IPR benefits

Nayi Disha Studios Pvt. Ltd., New DelhiFolks Motor Private Limited, Delhi

Debarred

Comfort Products Private Limited, Mumbai GMGC IPR Services Private Limited, Pune

Rejected


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Date post:	15-Apr-2017
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How to take funding learning from Startup India Stand-up govt theme

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