An overview of Start-up ecosystem in India, various legal entities which can be floated. What is Start-up India plan & its benefits? Funding environment in India, Various funding options. How to shutdown/exit your venture?

1. < Seemant Shrivastav/> <Hetal Shah/> <2017/05/27>
<Booting up: How to kick start your venture>

2. <CAVEAT>
caveat ˈkavɪat/:
noun
a warning or proviso of
specific stipulations,
conditions, or limitations.
The presentation on Start-ups is made for the
audience at the 91 springboard hub. The presenters
do not wish to solicit, invite or provide inducement of
any sort whatsoever from Attentio Corporate Services
LLP or any of its members to create an Consultant-
Client relationship with members of audience.
While due care & diligence has been exercised in
creation of the contents of this presentation. The
presenters do not assume any liability for the
interpretation and/or use of the information
contained on this presentation, nor do they offer a
warranty of any kind, either expressed or implied.
Audiences are hence requested to consult reliable
sources, including Government websites and/or their
advisors before taking any action/decisions with
regards to contents of this presentation

3. <Index>
• Start-up Environment
• Available entity structures
• Major Compliances
• Ease of Doing Biz
• Start-up India Program
• Benefits of Start-up India
• Funding environment
• Lifecycle of funding
• Funding sources
• Shutting down business
• Bankruptcy code
• Closing thoughts

4. <before we begin>
#World wide: Source HBR
India: Source IBM Survey
of Indian Start-ups
fail in first 5 yrs.90%

5. <Start-up /Environment>

6. <Start-up
/Ecosystem>
<IndiaVs US>
0%
10%
20%
30%
40%
50%
60%
50-88 35-49 Below 35
51%
33%
16%
US: Avg Age of Entrepreneurs
In India 72% of entrepreneurs are below 35
years
9.50
2015

7. Company
Last Round
Valuation (Bn $)
Date of entry into
Unicorn club Sector/Model Investors Founders
Flipkart $11.6 08-06-2012 eCommerce/Marketplace
Accel Partners, Ebay,
Iconiq Capital Sachin & Binny Bansal
One97 Communications
(operates Paytm) $5.7 05-12-2015 Fintech
Intel Capital, Sapphire
Ventures, Alibaba Group Vijay Shekhar Sharma
Olacabs $3.5 27-10-2014 On-Demand
Accel Partners, SoftBank
Group, Sequoia Capital
Bhavish Aggarwal, Ankit
Bhatti
ReNew Power Ventures $2 14-02-2017 Energy & Utilities
Goldman Sachs, JERA,
Asian Development Bank Sumant Sinha
Hike $1.4 16-08-2016 Social
Foxconn, Tiger Global
management, Tencent Kavin Bharti Mittal
Shopclues $1.1 01-12-2016 eCommerce/Marketplace
Nexus Venture Partners,
GIC Special Investments,
Tiger Global Management
Radhika Aggarwal,
Sandeep Aggarwal &
Sanjay Sethi
Zomato Media $1 04-10-2015 Social
Sequoia Capital, VY
Capital
Deepender Goyal, Pankaj
Chaddah
InMobi $1 12-02-2014 Adtech
Kleiner Perkins Caufield &
Byers, Softbank Corp.,
Sherpalo Ventures
Naveen Tewari, Amit
Gupta, Abhay Singhal
Quikr $1 04-07-2015 eCommerce/Marketplace
Brand Capital, Tiger Global
Management, Kinnevik Pranay Chulet
<Indian/Unicorns>
#Source: www.cbinsights.com

8. <Entity/Structures>

9. <Entity/Types>
Unincorporated
Proprietorship
Partnership
Incorporated
OPC
LLP
Private/Public
Company

10. Type of company Pros Cons
Sole Proprietorship
Easy to start & dismantle, limited
compliances, complete control, low cost of
formation and management
Unlimited liability, lack of credibility , lack of
resources, not recognized as a separate legal
entity, Foreigners are not allowed to start a
proprietorship
One person company
Limited liability, benefits & simplicity of
proprietorship
Higher compliances vs a sole proprietorship
Partnership
Easy to set up & dismantle, hardly any
compliances,
Unlimited liability, not recognized as a
separate legal entity, Foreigners are not
allowed to start a partnership
Limited liability
Partnership
Incorporated Partnership with Limited
liability, Foreigners are allowed to invest
with prior approval of RBI & Applicable DIPP
approval (if applicable),Tax benefits
More compliances, Equity Capital raising is a
challenge,
Private /Public Company
Limited liability, Foreigners are allowed to
invest through automatic route in most
sectors, Easier to raise capital from PE/VC
firms.
Most regulated, Highest level of
compliances, Corporate Governance & other
mechanisms come into play.
<Entity/Types>

11. <COMPLIANCES/LEGAL>
• Routine operations : General meetings, Board Meetings, filing IT returns, remitting Tax deducted at
source(TDS) returns, Filing ST/VAT/Excise (going forward GST Returns)
• Fundraising Related : mode of issue of securities, valuation for tax purposes, Reserve Bank of India
(RBI) and Foreign Exchange Management Act (FEMA) regulations for foreign investors.
• IP related: Applying for trademarks, patents & copyrights, protecting your IP, attribution, and
royalties.
• Employee Related: Provident fund, Employee State Insurance, Bonus, Gratuity, Maternity Benefits,
POSH Policy
There are also various Acts, Rules and Regulations applicable to entities which are State or Sector
Specific (depending on nature of business) and may have separate regulators also.

12. <Ease of Doing Biz>

13. <Ease of Doing Biz>
Ease of doing Business index prepared byWorld Bank for 189 economies and aggregates information from 10
areas of business regulation:
• Starting a Business;
• Dealing with Construction Permits;
• Getting Electricity
• Registering Property
• Getting Credit
• Protecting Minority Investors
• PayingTaxes
• Trading across Borders
• EnforcingContracts
• Resolving Insolvency
India has moved 4 notches in last three years on this index:

14. 14
Co. Incorporation
time lines have
shrunk from 15-20
days to 5-8 days
<Incorporation/Timelines>

15. <Ease of Doing Biz>
Incorporation time has been squeezed down by merging/doing away with certain procedures.

16. <STARTUP/INDIA>

17. <STARTUP
DEFINITION>
An entity shall be considered as a Startup :
a) if it is incorporated as a private limited or registered as
a partnership firm or a limited liability partnership in India;
and
b) up to seven years from the date of its incorporation/
registration and
c) if its turnover for any of the financial years since
incorporation/ registration has not exceeded Rupees 25
crores; and
d) if it 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.

18. <STARTUP INDIA
SCHEME>
• Launched by PM Modi in January, 2016.
• Focuses on building a strong ecosystem
• Established a start-up hub to answer the queries from
companies and help with the registration process
• Establishing Incubator centres
• Establishing 500 tinkering labs.
• 7 Research Parks will be set up
• 15Technology Business Incubators (TBIs) and 15 Start-
up centres are being set up
• Exemptions on CapitalGains for Angel,VC/AIF
investors If invested via funds of funds recognized by
SIDBI

19. <Steps/Checklist for registration>
Company must be a private company/LLP/partnership firm
I
II
Age should not be
more than 7 years
Yes
Turnover should
not exceed 25 cr in
any year
III
Yes
must be working towards innovation,
of new products, processes or
services or scalable business model
with a high potential of employment
generation or wealth creation.
Get approval from DIPP that
your company is innovative
recommendation from
an incubator
established in a post-
graduate college in
India
recommendation
from an incubator
which is funded from
GoI
recommendation
from an incubator
which is recognized
from GoI
be funded by an
Incubation Fund/Angel
Fund/Private Equity
Fund/Accelerator/Angel
Network
have a patent
granted by the
Indian Patent and
Trademark Office
IV
V
VI cVI bVI a VI d VI e
IF you meet conditions I,II,III,IV,V and any one ofVI series, then you are a startup

20. <Benefits of Start-up India>

21. BENEFITS OF
RECOGNITION
Tax Exemption
Rs 10,000 cr
fund of funds
Fast track of
patents;
Rebate of upto 80%
Access to
Government
Contracts
Easy exit
Rs 2,000 cr credit
guarantee fund
<Recognition Perks>

22. <START UP
INDIA/ STATUS>
Till 15th May,2017
• DIPP has recognized 932 companies as startups.
• 23 companies have received tax exemption
• 200 Patent applications have received benefit of
reduction of 80% in fees and free legal assistance.
• Started a startup India online learning program free
for everyone.

23. 623 cr committed to 17 AIFs
33 cr discbursed to these funds
Investments made in 62 startups to
the tune of Rs 180 cr.
Fund of Funds Set up the GOI, managed by SIDBI
<FUND OF
FUNDS>
600 cr released to
SIDBI
10000 cr allotted till 2025

24. • To be Launched by DIPP
• Screening process – June 2017 (10,000 applications
expected, shortlisted 2000 will present here) in Mumbai,
Kolkata, Delhi, Guwahati, Indore , Chandigarh and
Bengaluru.
• Most of the funds for the show would be met through
sponsorship
• Final round around 35-40 will be shortlisted and telecasted
onTV
<SHARKTANK
INNOVATE INDIA>

25. <Funding Environment-India>

26. <Start-up: Fund raise Survey>

27. <Start-up: Fund raise Survey>

28. <Deals/2016>
9%
9%
7%
5%
5%
5%
4%
4%3%2%2%2%
2%
2%
2%
37%
Ecommerce
healthtech
fintech
enterprisetech
media & entertainment
Edtech
discovery
hyperlocal
Foodtech
Traveltech
Fashiontech
Analytics
Hardware
Logistics
AI
Others

29. <Funding Lifecycle for Start-ups>

30. <Start-up:Typical Financing Cycle>

31. <Funding Options>

32. Equity Debt Barter(exchange) Others
VentureFunds CreditCards
PartneratVC's,CorporateHeads PersonalLoans SaasinsteadofProduct
AngelFunds&Networks VentureDebt(PEfundedCo) GetSeniorpeopletowork
AngelSyndicatePlatforms SMELoansbyNBFC's CustomerAdvances
MediaBarters Factoring Licenseyourproductsinothermkt
HNI's Leasing GovernmentGrants&Incentives
Incubator/Accelerator LoanagainstCollaterals Barter-ConsignmentBiz WinPrizesincontests
CrowdFunding CGTMSE Backofficesupport Managingwithownrevenues
Friends&Family OfficeSpacevsproduct/equity Moonlightingonjob
Bootstrapping Exchangeresources GetFreeresources
Costoffund
<Start-up: Fund sources>

33. <Shutting Down/Bankruptcy>

34. <CLOSING
DOWNTHE
BUSINESS>
• Generally it takes three years to close down a
business.
• Regulatory compliance requires a procedure to be
complied when returning money.
• Not shutting down an earlier venture can create a
problem for the current venture.
• India's archaic laws and labyrinthine processes of
liquidation make dealing with shuttering a start-
up far harder than handling the emotional
struggle of giving up.
• Abandoning a business is not the solution.
Defaults in company law compliance and inherent
shareholder obligations will lead to a black mark
in the RoC (Registrar of Companies) records

35. • If an asset sale is undertaken, one can kill the
business in a week or two.
• If one can demonstrate that the company has no
assets and operations for two years, the process
can be faster.
• The Insolvency and Bankruptcy Code, which is
finalised, is expected to ease some of the pain
involved in the liquidation process.
• Where possible, make short term commitments
on lease lock-in, employee hire, business
promotion, etc.
<CLOSING
DOWNTHE
BUSINESS>

36. To initiate an insolvency process for corporate debtors, the default should be at
least Rs 100,000 (which limit may be increased up to Rs. 10,000,000 by the
Government).The Code proposes two independent stages:
Insolvency Resolution Process, during which financial creditors assess whether the
debtor's business is viable to continue and the options for its rescue and revival;
Liquidation, if the insolvency resolution process fails or financial creditors decide to
wind down and distribute the assets of the debtor.
<BANKRUPTCY CODE>

37. <ClosingThoughts>

38. <To Sum Up>
India is one of the more difficult places to do business for a start up. However, this is
changing gradually with Government focus on easing the regulatory & taxation
norms. This will still take some time though and Entrepreneurs in meanwhile
should keep chasing their vision.

39. 39
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