This article is written by Saumya Krishnani who is pursuing a Diploma in Business Laws for In House Counsels from LawSikho.
Table of Contents
Introduction
In recent years, start-ups in India, as in many other parts of the world, have received increased attention. Their numbers are on the rise and are now commonly regarded as major drivers of growth and job development. Startups can generate impactful solutions through creativity and scalable technology and thus serve as platforms for socio-economic growth and transformation.
In India, Startup India is about building prosperity. Lots of enterprising people who dream about starting their own company, lack the money to do so. As a consequence, their thoughts, talent, and Capabilities remain untapped, and the nation lacks wealth production and economic growth. Jobs and development startup India helps to increase entrepreneurship and economic growth by ensuring that it encourages individuals who have the ability to invent and start their own company – Proactive multilevel assistance and benefits.
What initiatives by the Govt. has nurtured the start up culture in India
The Government of India, led by Narendra Modi, has focused more and more on a wide universe of emerging start-ups in recent years, and for this the Government has launched new programs and opportunities to bring out the best in these companies and aid them in innovation and nurturing.
The government of our country has undertaken many initiatives to encourage new entrepreneurship and to foster a culture of creativity among young people who are regarded by our Prime Minister as India’s future. India will in any case, improve, raise business people and build occupations for the good of the country and the world with a massive and exceptional statistical advantage.
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Make in India
The initiative, launched in September 2014, was established to turn India into a global design and manufacturing hub. The Make in India initiative has ensured that modern and user-friendly approaches are replaced by old and outdated systems. This has boosted confidence in the abilities of India among potential accomplices abroad, a business community within the country, and residents on the loose.
The agreement behind Make in India was one of the most common in late history. And this in turn, has helped to secure investment, encourage creativity, improve skills, protect intellectual property, and create the best infrastructure for manufacturing.
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Digital India
The Digital India initiative was initiated by the government to modernize our country’s economy and to make all government services electronically available. The primary aim of this is to create India with universal access to goods and services as a digitally-empowered society and an information economy.
The technological penetration in most parts of our country is so poor that people are not aware of the new initiatives and opportunities. And it wants to boost the involvement of people in the digital and financial space through this scheme, make India’s cyberspace safer and more stable, and increase the ease of doing business. It helps to hit every part of the country with digital tools and services.
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Start-up India
The Government of India encourages and supports entrepreneurship by mentoring, fostering and encouraging start-ups during their life cycle, with the aid of the Startup India initiative. Launched in 2016, the system has effectively given a great start to a number of potential start-ups in the country.
The initiative has provisions for different methods to learn and learn more about start-up development, including among others, research parks, incubators and start-up centers. In addition to this the scheme has also developed a ‘Fund of Funds’ that enables start-ups to access funding. The key reason for this is to create an atmosphere in which start-ups can innovate and grow without any obstacles.
The frameworks used in the initiative include online identification of start-ups, the Startup India Learning Program, Facilitated Patent Filing, Easy Enforcement Standards, Relaxed Procurement Standards, Incubator Support Student Innovation-Focused Initiatives, Financing Support, Tax Benefits and Addressing of Regulatory issues.
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Atal Innovation Mission (AIM)
AIM is a Government of India scheme that aims to foster the culture of innovation and entrepreneurship and serves as a forum for promoting world-class innovation hubs, Grand Challenges, start-ups and other self-employment activities, particularly in areas powered by technology.
The government has also launched Atal Tinkering Labs (ATL) across India to instill innovation and imagination in children at school level. Students will take part in different activities here at these workplaces and work with instruments and equipment to obtain hands-on knowledge of STEM (Science, Technology, Engineering and Math) concepts. Another initiative set up by Target is Atal Incubation Centers (AICs) with an aim to develop creative start-up companies as scalable and sustainable enterprises. They provide the right amount of physical infrastructure to different facilities on the basis of capital equipment and operating facilities.
Challenges faced by the founders of Start-ups
Many businesses fail to survive the market amid the flood of venture capital funds into the start-up industry and may ultimately be forced to shut down operations. Therefore the factors that impede the growth and survival of startups in the country are important to understand.
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Investment
According to research firm Venture Intelligence, almost $242 million in venture capital funding has gone to a total of 64 startups in India. Industry analysts, however, argue that this amount is negligible and there is a good reason to dramatically increase it to maintain early-stage risk resources. Debt as a means of financing is often not a feasible choice because of the mechanisms involved and the high interest rates. Personal financing is a concern since financial stability involves immediate sources of income that may not be available in the initial stages of starting a company.
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Team Members
A team of committed individuals who aspire to succeed at their job and are serious enough to follow up without any reminders is an important aspect of any startup. Scouting for a good team is a start- up’s major challenge, especially at the nascent stage, where a team can make or break the business.
Team failure was attributed to the shutdown of 23 percent of failed startups, according to a survey. The absence of co-founders is a top factor for failed startups. It needs a team of committed individuals with complementary skill sets. Early on a team with a great combination of abilities but different ways of working can also cause problems.
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Generation of Revenue
Due to weak revenue generation, many startups fail as the company is expanding. As activities rise, spending increases with reduced profits, startups are forced to focus on the financing factor thus diluting the emphasis on the basic company. Revenue generation is therefore important; Guaranteeing good burn rate control in which the pace at which start-ups invests money is common parlance. In the original steps, the challenge is not to generate sufficient resources, but also to expand and maintain production.
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Market
Startups fail because of the lack of commitment to the constraints in the Market. The markets typically, the atmosphere for a startup is more due to the uniqueness of the company, it is challenging for an existing company about the product. For a new product, the case is more complicated as a start-ups, everything must be built from scratch.
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Regulations
Although things on the regulatory front are improving, registering your company, which takes anywhere from a month to 6 months, is still difficult. In the region, regulations relating to labor laws, intellectual property rights, information technology, contracts, dispute resolution, etc are strict, which can initially make the start-up difficult.
Case Law
Meesho
Meesho is building an ecosystem where someone with zero investment can start their company. By 2020, the start-up plans to build about 20 million micro-entrepreneurs. Meesho is a retail distribution platform for social commerce, allowing small retail merchants to effectively link and sell their goods via social media platforms.
The Meesho platform has over two million resellers; more than 20,000 producers from 500 towns across the country receive distribution facilities through Meesho. Meesho operates on around 10-15 percent commission and sellers can gain on each sale by adding a profit margin. Over two consecutive years, the company saw 50X growth and the number of orders (HY18 to HY19) grew by 1451 percent. When Facebook invested in the company, the biggest affirmation for the firm was. The start-up has raised $215.2 million in financing to date.
How to overcome hurdles faced by the Start-up founders
There are different challenges faced by the start-up founders to run their business. Founders can overcome hurdle by
Management of Time
During your company’s rapid growth periods, delegating key roles is important, which makes it an absolute necessity to recruit the right talent to manage tasks that you are not as good at. This is a lesson that Bauer quickly learned with his start-up, Thread Wallets. Bauer states, “The concept began with only my wife and I making these wallets by hand.” But it was clear after seeing the future consumer demand that there would be more work than we could do on our own. Hiring an early sales manager and PR manager was a lifesaver that gave us more time to concentrate on perfecting our product.
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Maintaining culture of the company
Deloitte recently discovered that 94 percent of managers and 88 percent of workers agree that a distinct culture of the workplace is vital for business success. Fine-tuning the atmosphere of your startup is important if you want to retain the kinds of talented employees that can carry your company to the next stage.
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Market Trends
With PR, the relationship between what you put in and what you get out is not linear. Catharine does a lot of things and still gets nothing. She’ll do a little bit of outreach here or there at other times, and all of a sudden we get a flood of coverage Help A Reporter Out (HARO), where individuals and organizations can provide helpful data and quotes for writers in need of an authoritative source on select news media topics, is among the tools that have been most popular for Reel good.
Conclusion
India’s current economic scenario is in expansion mode. With the implementation of liberal policies and initiatives for entrepreneurs such as ‘Make in India’,’ Startup India’, MUDRA etc.’ Make in India ‘is a great opportunity for Indian start-ups, the Indian government is increasingly enthusiastic about rising the GDP rate of growth from grassroots levels.
It could arrest brain drain and provide an atmosphere to increase the availability of local talent for recruiting start-up companies with the government going full hog on emerging entrepreneurs. Small investments from a number of entrepreneurs will have a cascading impact on the economy and job creation, complementing efforts by medium and large industries to catapult India into a rapidly rising economy.
References
https://www.indiafilings.com/learn/challenges-faced-startups-india/
https://pixr8.com/india/the-helpful-startup-policies-from-indian-government/
https://www.forbes.com/sites/ryanrobinson/2019/06/06/startup-hurdles-rapid-growth/?sh=2be63d76136b
https://yourstory.com/2019/12/india-top-50-disruptive-startups-yourstory
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