It is critical that it is leveraged well through innovative
initiatives. The Government has taken several very proactive steps to
encourage entrepreneurship. We await to see how the implementation of
some of these initiatives is going to be planned, especially the plans
of start-up fund corpus. In order to create a conducive eco-system for
the venture capital in this sector it is proposed to establish a
10,000crore fund to act as a catalyst to attract private Capital by way
of providing different type of capital for start-up companies.” A
“District level Incubation and Accelerator Programme” would be taken up
for incubation of new ideas and providing necessary support for
accelerating entrepreneurship. The proposed outlays for start-up funds
and enabling processes for different categories of the population and
industry sectors are a welcome initiative.
The government deserves to be commended for addressing the funding needs of upcoming entrepreneurs. The Rs. 10,000crore venture capital fund for start-ups is a great beginning for the financial architecture of small and medium-sized enterprises as they can be referred as the backbone of the economy. A fund, if structured well, could create the much needed ‘real early-stage’ funding support that start-ups in India need today and play a strong role in creating a much more seamlessly integrated funding mechanism as also in helping mature the funding ecosystem for start-ups. However, allocating money, being very positive signal, is only one of the key challenges in realizing the benefits from a start-up fund. The quality in the implementation of the fund, the government’s structure, the knowledge, professionalism and experience of the funding committees will all determine the quality and scale of outcomes and impact from this initiative. Private investors are ready to invest three times that of Government of India. Something similar will have to be implemented to make the fund efficacious. As in the fund, the participation of the key stakeholders would be critical to make the best of these proposals.
Additionally, another major challenge in the ecosystem is the ability of large numbers of entrepreneurs to access high-quality mentoring and training in order to grow their skills to tackle start up challenges. And some adequate and systematic efforts are required to tackle this gap if we expect that the fund would have a high-quality pipeline of entrepreneurs. However, India still ranks low in ease of starting up and doing business, as multiple registrations and clearances are required. A single window clearance mechanism would be a great step. We would be leveraging half of India’s population that has tremendous potential for significant contribution to the country’s GDP.
Then there are impact start-ups that work on solving social problems through entrepreneurship. These are different aspects requiring a large patient capital with a longer return horizon and some outright grant as seed capital. The actual value is embedded in how the programs will be implemented to suit the needs of each group. But the announcement of the fund is a step in the right direction since India’s economic future lies in creating millions and millions of jobs for the aspirational youth.
Additionally, the exit regulations and compliance for start-ups is immense. Any type simplification is welcome and will hugely benefit start-ups that are struggling to set up businesses and struggling to exit if they have failed. So this would pave way for easier “exits” for start-ups and smoother life after exits to entrepreneurs.
The government deserves to be commended for addressing the funding needs of upcoming entrepreneurs. The Rs. 10,000crore venture capital fund for start-ups is a great beginning for the financial architecture of small and medium-sized enterprises as they can be referred as the backbone of the economy. A fund, if structured well, could create the much needed ‘real early-stage’ funding support that start-ups in India need today and play a strong role in creating a much more seamlessly integrated funding mechanism as also in helping mature the funding ecosystem for start-ups. However, allocating money, being very positive signal, is only one of the key challenges in realizing the benefits from a start-up fund. The quality in the implementation of the fund, the government’s structure, the knowledge, professionalism and experience of the funding committees will all determine the quality and scale of outcomes and impact from this initiative. Private investors are ready to invest three times that of Government of India. Something similar will have to be implemented to make the fund efficacious. As in the fund, the participation of the key stakeholders would be critical to make the best of these proposals.
Additionally, another major challenge in the ecosystem is the ability of large numbers of entrepreneurs to access high-quality mentoring and training in order to grow their skills to tackle start up challenges. And some adequate and systematic efforts are required to tackle this gap if we expect that the fund would have a high-quality pipeline of entrepreneurs. However, India still ranks low in ease of starting up and doing business, as multiple registrations and clearances are required. A single window clearance mechanism would be a great step. We would be leveraging half of India’s population that has tremendous potential for significant contribution to the country’s GDP.
Then there are impact start-ups that work on solving social problems through entrepreneurship. These are different aspects requiring a large patient capital with a longer return horizon and some outright grant as seed capital. The actual value is embedded in how the programs will be implemented to suit the needs of each group. But the announcement of the fund is a step in the right direction since India’s economic future lies in creating millions and millions of jobs for the aspirational youth.
Additionally, the exit regulations and compliance for start-ups is immense. Any type simplification is welcome and will hugely benefit start-ups that are struggling to set up businesses and struggling to exit if they have failed. So this would pave way for easier “exits” for start-ups and smoother life after exits to entrepreneurs.
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