1) The document defines a startup as a new entity operating for less than 5 years with annual turnover not exceeding 25 crore and working on innovation, development or commercialization of new technologies or intellectual properties. 2) It outlines several government initiatives to support startups including tax benefits, relaxed public procurement norms, incubators and research parks, funding support, and reducing regulatory requirements. 3) Statistics show the number of tech startups in India is expected to double to 11,500 by 2020, with 9 startups already valued over $1 billion. In Q1 2016, $1.73 billion was invested across 344 deals, led by e-commerce, SaaS and health-tech sectors.

1. S
2016

2. Start Up Definition
Recognition Process
Ease of Starting Business
Resolving the Chakravyuha Challenge
Government initiatives
Major Tax Benefits
FEMA Relaxation for StartUps
1
2
3
5
6
8
9
Content
SEBI EMERGE ITP for StartUps 10
StartUp Current India Scenario 13

3. Start Up Definition:
An entity shall be
Considered as a ‘startup’-
a) Up to five years from the date of its incorporation/registration,
b) If its turnover for any of the financial years has not exceeded Rupees 25 crore, and
c) It is working towards innovation, development, deployment or commercialization of new
products, processes or services driven by technology or intellectual property;
But, any such entity formed by splitting up or reconstruction of a business already in existence
shall not be considered a ‘startup’.
An entity would not consider start up under the definition of point c if its
 Products or services or processes which do not have potential for commercialization, or
 Undifferentiated products or services or processes, or
 Products or services or processes with no or limited incremental value for customers or
workflow
Provided further that in order to obtain tax benefits a startup so identified under the above
definition shall be required to obtain a certificate of an eligible business from the Inter-
Ministerial Board of Certification consisting of:
a) Joint Secretary, Department of Industrial Policy and Promotion,
b) Representative of Department of Science and Technology, and
c) Representative of Department of Biotechnology.
Page 1
StartUp India 2016

4. Recommendation Letter
Funding Details
A Patent
1
2
3
Page 2
Recognition Process
Recommendation Letter can be obtained from
 From any Incubator established in a postgraduate college in India.
 By any incubator which is funded from Govt of India or any State Govt.
 Any Incubator recognized by Government of India.
A Letter of funding can be
 Funding of not less than 20 per cent in equity by any Incubation Fund/Angel
Fund/Private Equity fund/Accelerator/Angel Network duly registered with Securities
and Exchange Board of India that endorses innovative nature of the business.
 a letter of funding by Government of India or any State Government as part of any
specified Scheme to promote innovation
A patent filed and published in the Journal by the Indian Patent Office in areas affiliated with
the nature of business being promoted.
“Startups will be required to submit a simple application with any of the above
documents.”
StartUp India 2016

5. Ease of Starting Business
To reduce the regulatory burden on Startups thereby allowing them to focus on their
core business and keep compliance cost low.
Startups shall be allowed to self-certify compliance (through the Startup mobile app)
with 9 labour and environment laws (refer below). In case of the labour laws, no inspections will
be conducted for a period of 3 years.
In case of environment laws, Startups which fall under the ‘white category’ (as defined
by the Central Pollution Control Board (CPCB)) would be able to self-certify compliance and
only random checks would be carried out in such cases.
White Category Industry
1 Air coolers /conditioners 13 Electrical and electronic item 25 Shoe brush and wire brush
2 Bicycles ,baby carriages 14 Engineering fabrication units 26 Medical oxygen
3 Bailing of waste papers 15 Flavored betel nuts 27 Organic and inorganic nutrients
4 Bio fertilizer /bio-pesticides 16 Fly ash bricks! block 28 Organic manure
5 Biscuits trays 17 Fountain pen 29 Packing of powdered milk
6 Blending / packing of tea 18 Glass ampules 30 Paper pins and u clips
7 Block making of printing 19 Glass putty and sealant 31 Repairing of electric motors /generators
8 Chalk making 20 Ground nut decorticating 32 Rope (plastic and cotton)
9 Compressed oxygen gas 21 Handloom carpet weaving 33 Scientific and mathematical instrument
10 Cotton and woolen hosiers 22 Leather cutting and stitching 34 Solar module NC energy apparatus
11 Diesel pump repairing 23 Coir items from coconut husks 35 NC Energy power plant less thank 25MW
12 Electric lamp (bulb) and CFL 24 Metal caps containers etc 36 Surgical and medical products assembling
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StartUp India 2016
Days required to starting a
business in India
34
Days
29
Days
2015 2016

6. Page 4
Startup India Hub
 Government to set up a Startup India Hub which will be a single-point of contact for
Startups.
 Such hub will enable knowledge exchange by collaborating with various stakeholders
such as the Central and State Governments, legal partners, consultants, universities,
R&D institutions and assist in the funding process.
Rolling-out of Mobile App and Portal
To serve as the single platform for Startups for interacting with Government and Regulatory
Institutions for all business needs and information exchange among various stakeholders.
The Government shall introduce a Mobile App to provide on-the-go accessibility for:
• Registering Startups with relevant agencies of the Government
• Tracking the status of the registration application and anytime downloading of the RC.
• Filing for compliances and obtaining information on various clearances or approvals.
• Collaborating with various Startup ecosystem partners.
• Applying for various schemes being undertaken under the Startup India Action Plan
Relaxed Norms of Public Procurement for Startups
At present, effective April 1, 2015 Central Government, State Government and PSUs have to
mandatorily procure at least 20% from the Micro Small and Medium Enterprise (MSME).
In order to promote Startups, Government shall exempt Startups (in the manufacturing sector)
from the criteria of “prior experience/ turnover” as an eligibility criteria for any tender.
StartUp India 2016

7. Page 5
Insolvency Bankrupt Bill 2015 –Easing the Chakravyuha Challenge
India has made great strides in removing the
barriers to the entry of firms, talent, and technology
into the Indian economy. Less progress has been
made in relation to exit. Thus, over the course of six
decades, the Indian economy moved from
‘socialism with limited entry to “marketism”.
The Charkravyuha legend from the Mahabharata
describes the ability to enter but not exit, with
seriously adverse consequences. It is a metaphor for
the workings of the Indian economy in the 21st
century, the legacy of several decades of economic
policy making.
The Insolvency Bankrupt Bill 2015 tabled in Lok Sabha has provisions for fast track exit or
voluntary closure of businesses.
 The Insolvency and Bankruptcy Bill 2015 (“IBB”), will allow fast track and / or
voluntary closure of businesses.
 Startups satisfying the specified conditions of the IBB will be allowed to be wound up in
90 days on a fast track basis.
 Such a wind up will be carried out by an Insolvency Professional who will be in charge of
the company and oversee the liquidation process.
StartUp India 2016

8. In order to augment incubation and
R&D efforts, 31 centers of Innovation
and entrepreneurship will be set-up/
scaled up for providing facilities to
over 1,200 Startups, at national
institutes.
Improving Ease of Starting a
Business.
 To create Ebiz portal for
Reducing approvals required to
start a business.
 To complete tax registration in 2
days
Government policies and initiatives are aimed
towards improving the overall start-up ecosystem
Funding
Government to set up a Fund
with an initial corpus of Rs.2,500
crore and a total corpus of
Rs.10,000 crore over a period of
4 years.
Credit Guarantee Fund for Startups to
catalyze entrepreneurship through credit to
innovators. It will be rolled out through the
National Credit Guarantee Trust Company/
SIDBI with a budgetary corpus of Rs.500
crores per year for the next 4 years.
Technology
7 new research parks are proposed to
be set up with an initial investment of
Rs.100 crore each.
These parks shall enable companies
with a research focus to set up base
and leverage the expertise of
academic/ research institutions.
Operations
Page 6
StartUp India 2016

9. AIM proposes to promote entrepreneurship through Self-Employment
and Talent Utilization (“SETU”), wherein innovators would be
supported and mentored to become successful entrepreneurs.
This would be achieved through:
 Establishment of sector specific incubators
 Establishment of 500 tinkering labs
 Pre-incubation training
 Strengthening of existing incubation facilities
Biotechnology

5 new bio clusters, 50 new bio incubators, 150 technology transfer
offices and 20 bio connect offices will be established though
Biotechnology Research Assistance Council (BIRAC).
Biotech Equity Fund – would be set up in partnership with National
and Global Equity Funds to provide financial assistance to young
Biotech Startups.
Legal support

Startup Intellectual Property Protection (SIPP) scheme will be
introduced on a pilot basis for a one year period to facilitate filing of
Patents, Trademarks and Designs. The scheme would include:
 Fast-tracking patent application.
 Setting up a panel of “Facilitators” who will advise on different
Intellectual Property Rights (“IPR”) and also provide advice on
promoting and protection of IPRs in overseas jurisdictions.
 Such Facilitators will also provide end-to-end advisory from
making applications till the stage of final disposal of the IPR
application.
 The Government will bear the cost of such Facilitators and the
Startups shall bear only the cost of the applicable statutory
fees.
 A rebate of 80% on patent filing fees vis-à-vis other companies
is proposed.
Page 7
StartUp India 2016

10. MAJOR TAX BENEFITS

11. Major Tax Benefits 2016
Exemption on Capital Gain
 Exemption shall be given to persons who have capital gains during the year, if they have invested
such capital gains in the Fund of Funds recognized by the Government. This will augment the
funds available to various VCs/AIFs for investment in Startups.
 In addition, existing capital gain tax exemption for investment in newly formed manufacturing
MSMEs by individuals shall be extended to all Startups. Currently, such an entity needs to
purchase “new assests” with the capital gain received to avail such an exemption.
 Investment in ‘computer or computer software’ (as used in core business activity) shall also be
considered as purchase of ‘new assets’ in order to promote technology driven Startups.
Tax Exemption on profits to Startups for 3 years
With a view to stimulate the development of Startups in India and provide them a competitive platform,
it is imperative that the profits of Startup initiatives are exempted from income-tax for a period of 3
years. This fiscal exemption shall facilitate growth of business and meet the working capital
requirements during the initial years of operations. The exemption shall be available subject to non-
distribution of dividend by the Startup.
Tax Exemption on Investments above Fair Market Value
Under The Income Tax Act, 1961, where a Startup (company) receives any consideration for issue of
shares which exceeds the Fair Market Value (FMV) of such shares, such excess consideration is taxable
in the hands of recipient as Income from Other Sources.
In the context of Startups, where the idea is at a conceptualization or development stage, it is often
difficult to determine the FMV of such shares. In majority of the cases, FMV is also significantly lower
than the value at which the capital investment is made. This results into the tax being levied under
section 56(2) (viib).
Currently, investment by venture capital funds in Startups is exempted from operations of this
provision. The same shall be extended to investment made by incubators in the Startups.
Page 8

12. FEMA Relaxation for StartUps
 A start-up in India with an overseas subsidiary is permitted to open foreign currency
account abroad to pool the foreign exchange earnings out of the exports/sales made by
the concerned start-up;
 The overseas subsidiary of the start-up is also permitted to pool its receivables arising
from the transactions with the residents in India as well as the transactions with the non-
residents abroad into the said foreign currency account opened abroad in the name of
the start-up;
 The balances in the said foreign currency account as due to the Indian start-up should be
repatriated to India within a period as applicable to realisation of export proceeds
(currently nine months);
 A start-up is also permitted to avail of the facility for realising the receivables of its
overseas subsidiary or making the above repatriation through Online Payment Gateway
Service Providers (OPGSPs) for value not exceeding USD 10,000 (US Dollar ten
thousand) or up to such limit as may be permitted by the Reserve Bank of India from
time to time under this facility.
StartUp India 2016
Page 9

13. EMERGE-INSTITUTIONAL TRADING PLATFORM
India has witnessed a growing start-up
ecosystem fuelled by a large entrepreneurial
community. Many entrepreneurs are building
excellent businesses which can grow
exponentially with timely capital infusion.
EMERGE-ITP is a regulated market place which
meets the needs of the country’s contemporary
business environment. It allows start-ups and
young companies to list without an initial public
offering (IPO).
Emerge-ITP is a credible platform for start-ups and growing companies to list. The platform will
attract diverse risk investors including institutions, angel associations and venture capital funds.
StartUp India 2016
EMERGE's Institutional Trading Platform is
for Start-Ups and Small and Medium
Enterprises which do not have their
securities listed on any recognized stock
exchange and which seek listing of their
specified securities exclusively on the
institutional trading platform for informed
investors.
Page 10

14. Simple Listing Process
Benefits for an Investor
StartUp India 2016
According to ICDR
regulation
Prepare
Information
Memorandum
(IM)
Submit the IM
to NSE and
apply for listing NSE’s approval
NSE will verify the IM and
make it available on its
website
Company's securities are
listed
1. Unlocking of shareholder wealth. Exit
and Liquidity for VC/ PE/ Risk
Investors.
2. Better portfolio churn
EXIT & LIQUIDITY
3. Monitoring of invested portfolio
becomes smoother due to benefits of
disclosures and compliance
requirements of a regulated platform
EASIER MONITORING
4. Exit from a listed company attracts
only Securities Transaction Tax (STT)
instead of Capital Gains tax
BETTER RETURNS
5. Easy access to information will lead to
faster decision making
6. Enhanced ability to enter and exit
investments
FASTER DECISION MAKING
Page 11

15. StartUp India 2016
Total Start Ups 20,000
Startups % Share
4,300 | 5,700 43% | 57%
E-commerce - 33%
B2B - 24%
Consumer internet - 12%
Mobile apps - 10%
SaaS - 8%
Other – 13%
Engineering - 17%
Construction- 13%
Agri products- 11%
Textile - 8%
Printing & packaging – 8%
Transport & logistics - 6%
Outsourcing & support – 5%
Other – 32%Technology based startups
Non-Technology based startups
800 to 2,000
Average no. of new tech startups have moved from 480 in 2010 to
800 in 2015. Expected to increase to 2,000 in 2020.
4300 to 11,500
Total Tech startups are expected to increase to
11,500 in 2020 from 4,300 in 2015.
Double
The number of PE/VC firms have
doubled in the last 12 months Total
9 On Unicorn Clubs
StartUps Valuation More than US $1 Billion
Page 13

16. First quarter of 2016, Indian startups have cumulatively raised US
$ 1.73 billion across 344 deals from 312 investors. In terms of the
deal volume, the month of March has outperformed the other
respective months with 128 deals. However, e-commerce, SaaS
and Health-tech has turned out to be the top performing
investment segments this quarter with a cumulative investment of
over US$ 810Mn across 103 startups that accounts for ~47 per
cent of the cumulative deal value. in terms of investment (deal
value), January has gained a significant interest with a yelling
investment of US$ 761 Million over 105 deals.
338 - Number of
startups
US$ 1.73 Bn
Total deal size
40 - Mergers &
Acquisition
344 - Number of
deals
312 - Investors
involved
e-commerce -
Prominent
segment
StartUp India 2016
Page 14

17. StartUp India 2016
114 Deals
344 Deals
Q4 2015 Q1 2016
Investment Activity
Deals on Each Month
Page 15

18. Deals Classification
M&A
StartUp India 2016
Page 16
11
1316
Total 40 M&A Deals

19. StartUp India 2016
Pre Series A Funding for start Ups two years ago which was very rare in India is now increasing
day by day this is majorly because of the Govts initiatives and confidence of VCs over the
current situation.
$1 Million plus cheques in the early stage market, which had a prominence in early 2015 but
showing a huge drops in funding it was due to the high pressure on profitability from VCs to the
firms. It also indicates that this market is maturing as no of players are increasing day by day
and investors are now more alert. Also rise in $1Mn plus funding increased significantly for
Apr-16.
Page 17
2
9
17
27
35
18
0
5
10
15
20
25
30
35
40
Pre Series-A Funding $Mn
Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Apr 16
22
23
24
28
17
10
0
5
10
15
20
25
30
$1 Million plus Funding's
Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Apr 16

20. StartUp India 2016
Food Tech Start Ups in India : Story of Up & Down
256 322
2184
5653
819
0
1000
2000
3000
4000
5000
6000
Food Tech Funding Year Wise $M
2012 2013 2014 2015 2016
2300
Projected
66
18
11
4
1
0
10
20
30
40
50
60
70
2016 : Funding Break Ups
Seed Funding Series A Series B Series C Series D
Food Tech Industry the App Based food delivery start Ups which are majorly hit as it is the
overcrowded industry as of now in metro cities of India. Majority of the startups finding hard
for further findings. In 2016 most of the funding are from seed funding based.
Page 18

21. Conclusion
India is now a days not among the emerging countries for startup it already emerged as
a startup ecosystem country. According to NASCOM India is now third in global startup
ecosystem. The trend of start-ups is really picking up in India and the scene is only
expected to get much more competitive in the upcoming years owing to the large influx
of online companies all over the country.
According to a report by Nasscom, India will be a center for 11,500 tech startups by
2020. In fact, the NASSCOM report suggests that Indian startups, with their unique
solutions, are witnessing increased traction in global whitespace opportunities like
Internet of Things, Business Intelligence even many more. These findings definitely
signal that India is gearing up to create a startup friendly platform for young tech based
businesses where opportunities for growth are much larger than the challenges in the
ecosystem. Below, we take a look at the various industries that have been the breeding
ground for a dominant number of startups in India.
Beyond doubt, ecommerce startups are the ones that have triggered the startup culture
in India and continue to drive the momentum for the growth of other startup ventures.
Besides the eCommerce and Tech startups in different sectors like Health Care, Chat
Bots, FinTech are emerging in a great way.
Fund raising is critical in ensuring that startups outweigh their competitors and
continue as a successful run in the market. In this regard, Indian startups are placed
securely as the capital being more invested in Indian startups is growing at an
exponential rate. In fact, Indian startups are appealing more VCs as compared to their
US based counterparts.
StartUp India 2016
Page 19

22. Bibliography
.
StartUp India 2016
InnoVen Capital: India Startup Outlook Report (February 2016)
StartUp India Action Plan 2016 By Department of Industrial Policy and Promotion
A Snapshot of India’s Start-up Ecosystem By CII & Ministry of Skill Development Entrepreneurship
EMERGE NSE Institutional Trading Platform Brochure
https://www.cbinsights.com/blog/category/industry/iot-industry/
RBI Notification : RBI creates Helpline for guiding Start-ups in India on Forex Matters
http://timesofindia.indiatimes.com/tech/tech-news/Is-the-time-up-for-food-tech-startups-like-
Foodpanda-Zomato/articleshow/51242113.cms
Economic Survey of India 2015-16 Vol 1 Chapter 2
Page 20

23. Annexure
List of Companies Registered in SEBI Emerge -ITP
SYMBOL COMPANY_NAME
3RDROCK 3rd Rock Multimedia Limited
ABNINT A B N Intercorp Limited
BDR BDR Buildcon Limited
BHALCHANDR Bhalchandram Clothing Limited
CAPCO Capco Industries Limited
CMMINFRA CMM Infraprojects Limited
ELITE Elite Conductors Limited
FROGCELL Frog Cellsat Limited
GIRRESORTS GIR Natureview Resorts Limited
HECINFRA HEC Infra Projects Limited
HUSYS Husys Consulting Limited
INFOBEANS InfoBeans Technologies Limited
KAWIRES K A Wires Limited
MCSL Mahaveer Cotts Strings Limited
MMNL MIG Media Neurons Limited
MOHINI Mohini Fibers Limited
MRO M.R. Organisation Limited
NEO Neopolitan Pizza Limited
QVC QVC Realty Co. Limited
RATNAINFRA Ratnaakar Infrastructure Limited
SURAJCROP Suraj Cropsciences Limited
StarUp India 2016
Page 21