What is a Start Up?

At present an unmistakable meaning of a ‘Startup’ does not exist in the Indian setting because of the subjectivity and multifaceted nature included. Considering different parameters relating to any business, for example, the phase of their lifecycle, the sum and level of financing accomplished – startup funding, the measure of income created, the zone of activities, and so forth, we can say,

A Start Up is a young company that is just beginning to develop. They are usually of small scale and initially financed by the founders or one individual. These companies usually start with a new idea or offer something in a new manner that is already available in the market.

Life-cycle of Start Up –

• PRE-START UP:

1. Discovery – Identify a potential Product/ Service idea that would attract a big target market.
2. Validation – Looking for a potential customer to convert into an actual customer after launching the discovered product/service.

• START UP:

1. Efficiency – The founder begins to define his/her business model with the intention to develop a strong customer base.
2. Scale – Pushing the business to grow aggressively and increasing the capacity to grow in a stable manner.

• GROWTH:

1. Maintenance – Boosting benefits and dealing with the problems derived from the worldwide dimensions that the company has achieved.
2. Sale or Renewal – The decision to sell the start-up to an established company or arrange huge resource to accelerate the growth of the company.

 Start Up industry Composition in India-

Total Startups: 20000+ (approx.)

What is the present Scenario of Start Up Funding in India?

India is currently the third largest country behind US and UK with 20, 000 new businesses and 5200+ technology based new companies which are ready to reach 10,500 by 2020 as detailed by Start-up India and NASSCOM.

Upto 7 million college graduates every year and around 55% of the young generation prefer working in start-up companies over corporates. Almost 66% of overall start-up base is found in the metro cities like Bengaluru, Delhi NCR and Mumbai, even the tier II cities are not way behind because of new talent, government support, local investor and infrastructure support.

In the same time government support is also expanding as the Indian government has skimmed plans for new businesses, for example, Single Point Registration Scheme (SPRS), Bank Credit Facilitation Scheme, Start-up India initiative and others.

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How to fund for your Start Up?

Startup funding and fund raising, both are key present day business situations that help the development of a new business. The first round of Startup funding, prevalently known as seed funding shapes the premise of raising support. It is trailed by arrangement A, B and C rounds of funding. While the seed funding regularly alludes to the initial round of Startup funding, series A, B, and C vary in the business development and the kind of speculators included. The series funding helps in the evolvement of a start-up to a full-fledged organisation by helping it raising funds at necessary times.

 

Start Up funding Options in India:-

• CROWDFUNDING: The method of Crowdfunding is very similar to mutual funds on an initial level. This method of startup funding involves more than one investor who offers a fixed amount of money based on the business idea. Crowdfunding is slowly getting popular which shows that the experienced players are believing in the ideas of these new players. This method also helps a start-up to get crucial funds in the discovery stage itself which helps accelerating the fundamental growth of the business. Crowdfunding can be gathered from Friends, Family, entrepreneurs and big business who believe in the business idea.
• SELF-FUNDING: Self-Funding also known as Bootstrapping is the most suitable means of Startup funding when it is hard to convince others of your visions and plans in the initial stage of the start-up. Investors usually ask for tractions before investing, this helps to prove the feasibility of the idea and earn the confidence of the investor for future funding plans.
• VENTURE CAPITALIST: Another method of Startup funding is from Venture Capitalist (VC). These professionals offer you professionally managed funds who are presently looking for Startup funding opportunities that have a high success rate. The most vital part of Startup funding from a venture capitalist is the guidance and monitoring that they provide with their funds. Usually VCs invest in equity and once the business releases its IPO or is acquired, they leave.
• ANGEL INVESTOR: Angel investors are another popular means of Startup funding. These are individuals with surplus cash looking for suitable opportunities like Startup funding, investment schemes, etc. to invest their funds in, with a good potential growth rate. Although the problem with angel investors is they come with high-Interest and low-Investment expectations, it is important to remember that companies like Google, Yahoo and also Alibaba were a result of Angel Investing.

Future of Start Ups in India:

Start-Ups are the possible future of India. Indian start-ups in order to be successful have to understand how to develop a good business plan from an idea. Start-up community will be the platform which will be providing millions of job opportunities to the aspiring youths of the country with innovative start-up ideas and visions. This will gradually attract many investors towards Startup funding and as a result we can expect a boost in the number of start-ups in the country.

“Most businesses try to earn goodwill after they succeed. But entrepreneurs must come up with a business idea, which can be a business opportunity and earn goodwill at the same time.” -Mr. Suresh Prabhu