How to take funding learning from Startup India Stand-up govt theme, startups startup startupindia

1. www.startupscratch.com 1
www.startupscratch.com
9971504105
startupscratch@gmail.com

2. 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
www.startupscratch.com 2

3. 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 15th 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.
www.startupscratch.com 3

4. 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.
www.startupscratch.com 4

5. 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.
www.startupscratch.com 5

6. 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.
www.startupscratch.com 6

7. 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.
www.startupscratch.com 7

8. REGISTRATION PROCESS
www.startupscratch.com 8

9. 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.
www.startupscratch.com 9

10. 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, SMALLAND 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
www.startupscratch.com 10

11. 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
Tax Incentives
Corporate tax
reduction
Capital gains
exemption
Incentives for ease of
doing business
Incorporation
& other
formalities
Self-
Certification
Intellectual
Property Rights
Ease of
winding up
www.startupscratch.com 11

12. 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
www.startupscratch.com 12

13. 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
www.startupscratch.com 13

14. 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.
www.startupscratch.com 14

15. 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.
www.startupscratch.com 15

16. 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 Delhi
Folks Motor Private Limited, Delhi
Debarred
Comfort Products Private Limited, Mumbai
GMGC IPR Services Private Limited, Pune
Rejected
www.startupscratch.com 16

17. www.startupscratch.com 17
www.startupscratch.com
9971504105
startupscratch@gmail.com