Indian Startups Starts and Closure Research

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Microsoft India Accelerator research on Indian startup ecosystem company starts and closure

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Indian Startups Starts and Closure Research

  1. 1. India Tech Startup Starts and Closure Microsoft Accelerator Research http://www.microsoft.com/india/acelerator indiaaccelerator@microsoft.com© Copyright Microsoft India Accelerator 2012 http://www.microsoft.com/india/accelerator
  2. 2. Key notes about this research 1. The Microsoft Accelerator database tracks over 6214 entities and 3948 technology product companies in India 2. We have face-face interactions with founders of 65% of the companies to verify starts and closures besides secondary data 3. Closure data is based on f2f interactions alone Entities are not registered private companies, but LLC or partnerships© Copyright Microsoft India Accelerator 2012 http://www.microsoft.com/india/accelerator
  3. 3. 2010 & 2011 had most new tech product company starts, but 2012 is poised to trend lower© Copyright Microsoft India Accelerator 2012 http://www.microsoft.com/india/accelerator
  4. 4. Bangalore has over 41% new starts followed byNCR and Chennai, Hyderabad has seen steepest declines over 5 years© Copyright Microsoft India Accelerator 2012 http://www.microsoft.com/india/accelerator
  5. 5. eCommerce starts made up 1/3rd of all new companies, followed by B2B web© Copyright Microsoft India Accelerator 2012 http://www.microsoft.com/india/accelerator
  6. 6. Bangalore has most closures, both in number and % of companies started© Copyright Microsoft India Accelerator 2012 http://www.microsoft.com/india/accelerator
  7. 7. More than half of the 190 closures* in 2011were companies between 6 months to 1 year of formation Closure rate of Indian companies has been ~26% of companies that close within 1 year© Copyright Microsoft India Accelerator 2012 http://www.microsoft.com/india/accelerator
  8. 8. Besides inability to raise funds, most were unable to get customers to pay money quickly© Copyright Microsoft India Accelerator 2012 http://www.microsoft.com/india/accelerator
  9. 9. 61% of first time failed entrepreneurs are heading back to work at a big company Failure has such a big stigma in India, that most join a larger company . Many also do it so they can pay off their loans© Copyright Microsoft India Accelerator 2012 http://www.microsoft.com/india/accelerator
  10. 10. Most entities are not shutdown, but are being kept for side projects© Copyright Microsoft India Accelerator 2012 http://www.microsoft.com/india/accelerator
  11. 11. Takeaways for Entrepreneurs 1. Work on getting as many customers to pre- pay some of your revenue as an advance 2. Raise capital for 24 months rather than the 18 month norm of valley startups 3. If you are going to bootstrap, have funds for 18 months, not 6 months, which is the valley norm© Copyright Microsoft India Accelerator 2012 http://www.microsoft.com/india/accelerator

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