UNIT-2.1 Startup.pdf
- 2. Start-up and Start-up Ecosystem • Understanding the concept of start-up • Indian definition and scope of start-up • Overview of start-up ecosystem stakeholders: venture capitalist, evangelist, mentors and advisors, co-working spaces • Role of Incubator and accelerators, Grants as mode of initial funding for start-ups
- 4. STARTUP • A Startup is a high-growth fueled business in its early stages, typically characterised by high uncertainty and risk. • Startups differentiate itself from traditional firms by its innovation, creativity and agile approach to growth. • The term Startup refers to a company in the first stage of operations. Startups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand.
- 5. STARTUP • Startups are companies or ventures that are focused on a single product or service that the founder ( Entrepreneur) wants to bring to the market. These companies typically don’t have a fully developed business model and, more crucially, lack adequate capital to move onto the next phase of business. Most of the companies are initially funded by their founders.
- 6. Indian definition of Start-up An entity shall be considered as a Startup: 1. The Startup should be incorporated as a private limited company or registered as a partnership firm or a limited liability company. 2. Turnover should be less than 100 Crore rupee in any of the previous financial years. 3. An entity shall be considered as a Startup up to 10 years from the date of its incorporation. 4. The Startup should be working towards innovation/improvement of existing product, services and process and should have the potential to generate employment/ create wealth. An entity formed by splitting up or reconstruction of an existing business shall not be considered a Startup.
- 7. Number of Government recognized Startups from financial year 2016 to 2022 India has more than 90,674 DPIIT recognized Startups, making it the world’s third-largest Startup ecosystem in the world after the US and China. Year Number of Startups 2022 19,500 2021 20,160 2020 14,596 2019 11,417 2018 8,775 2017 5,233 2016 471
- 8. Cheetah, Gazelle & Unicorn • A Cheetah is a startup that could be unicorn in four years. Valuation of cheetah ranges between $200 million to $500 million. • A Gazelle is a startup that could be a unicorn in two years. Gazelles have an estimated valuation ranging from $500 million to $1billion. • Unicorn companies are those that reach a valuation of $1 billion without being listed on the stock market.
- 9. Challenges faced by Startups A study, “Entrepreneurial India” by the IBM Institute found that 90% of Startups fail with in the first five years. And the most common reason for failure is lack of- 1. Planning 2. Execution 3. Lack of Innovation 4. Funding 5. Lack of mentorship 6. Human resource
- 10. Startup India • In August 2015, Prime Minister, Shri Narendra Modi, announced the launch of the National Flagship Initiative- Startup India, with a mandate to promote and encourage young entrepreneurs of our country. Startup India scheme launched on 16th january,2016.The action plan of this initiative is based on following three pillars: 1 • Simplification and Handholding 2 • Funding Support and Incentives 3 • Industry Academia Partnership
- 11. • By launching Startup India scheme government’s aim is transform India into a Startup Nation, “ A country of job creators instead of job seekers”. • The Startup India initiative aim to fill gaps in the economy for the growth and development of startups and also boost digital entrepreneurship at the grassroots. • Startup India is a flagship initiative of the government of India, 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.
- 12. Why Startup India • To boost up/Promote Startup/Entrepreneurship. • Core objective is to generate maximum employment. • Encourage the people who have the potential to innovate and start their own business. • To boost up Banking sector • Be a job creator.
- 13. Benefits provided under Startup India 1. Reduction in patent registration fee 2. Easy access to funds 3. Tax holiday for 3 years 4. Apply for tenders 5. R & D facilities 6. Self-certification compliance 7. Tax saving for investors 8. Choose your investor 9. Meet other entrepreneurs 10. Single window clearance even with the help of mobile app 11. Encourage entrepreneurship
- 14. Impact of start-up india on indian economy • Creation of job • Increase export • Increase production will lower the price of goods and services. • Marginal propensity to consume MPC will go up • Boost GDP
- 15. Scope of Startup in India India has the third-largest startup ecosystem in the world, with consistent annual growth of 12 -15% predicted for the coming year. The report revealed that a record-breaking 46 Indian firms earned unicorn status in 2021, 19 Startup earned unicorn status in 2022, bringing the country’s total number of unicorn startups to 108, with the majority operating in the services industry. Three primary scope of Start-Up Companies in India are as- 1. Increase in Globalization A lot of factors, including globalization and the rise of the IT industry were majorly responsible for the rise of entrepreneurship in India. Higher pay scales with good designations offered by several private sectors or multinational companies encouraged the people.
- 16. 2. Startup Ecosystem The startup ecosystem is receiving a lot of support from international and Indian investors, who have increased trust in the sector and have committed funding to enable these businesses to develop. Today, the Indian economy is undergoing an immense makeover with new strategies rolling into the market emphasizing and enhancing the role and contribution of startups. 3. Make In India initiative The government of India launched the “Make in India” project to encourage businesses to create, produce, and assemble goods in India and to encourage targeted investments in manufacturing. The goal of the strategy was to create a business-friendly atmosphere, buildup an effective infrastructure, and open up new markets to foreign investment.