galatime.com - Kaushik Gala

Note: The views & opinions expressed in these essays are strictly my own, and not those of any entity I may be associated with as an employee, consultant, promoter, investor, etc.

ARCHIVES

 

Pune

Technology Venture Investors in Pune

 

Technology Entrepreneurship in India - Teams

Entrepreneurial traits

Picking cofounders

 

Technology Entrepreneurship in India - Generating Revenue

Is your business model well-defined?

Your industry's value chain

What is your value proposition?

Which distribution channels will you use?

Who will drive business development?

 

Technology Entrepreneurship in India - Raising Capital

Venture capital & venture capitalists (VCs)

Corporate venture capital

Angels & angel networks in India

Government support for Indian startups

Proof-of-concept funding

Do you need a business plan?

How much money should you raise?

Startup valuation

Pitching to investors

Figure out the term sheet

Negotiating with investors

Due diligence - A necessary evil

Time to sign the investment agreements

 

Equities, ETFs, F&O

› Oct 2011: Equity Risk Premium for India

› Jun 2011: Investing in Indian equities

 

Technology Enterprises in India

› Nov 2010: Technology investment in India - WATER

› Aug 2010: Technology enterprises in India - 3 avatars

 

Risk Capital for MSMEs

› Mar 2010: Risk mitigation for investors in MSMEs

› Mar 2010: Why don't (Indian) MSMEs get risk capital?

› Feb 2010: Angel investing - Will it work for Indian MSMEs?

› Feb 2010: What's so special about innovative MSMEs?

› Feb 2010: Where do Indian/NRI (V)HNIs invest?

› Feb 2010: Funding options for innovative MSMEs in India

› Jan 2010: Innovative MSMEs in India

Government support for Indian startups

(Last revised Mar-2012, Send comments to galatime@gmail.com)

Technology ventures in India must seriously consider (financial) support from the government during their early years. In response to the big gap in very early-stage risk capital (Rs 5 lakh - Rs 1 crore), the GoI has launched a variety of funding schemes. These range from outright grants for individuals to (matched) soft loans and equity capital for private limited companies.

Amounts greater than 1 crore are available to:

  • Biotech enterprises (via DBT)
  • Revenue-generating technology enterprises that need funds to scale (via TDB)

Obviously, such support comes with its own constraints in terms of timelines, flexibility, documentation needs, etc.

There are indirect sources of government support as well. For example, a science venture with an R&D lab can get an exemption from the customs & excise duties, if it obtains DSIR recognition. Considering that such duties on (expensive!) imported equipment can add 25%+ to the cost, the exemption is a huge benefit.

To tap GoI support for your startup:

  • Strategically use it as a complement to your capital, as early on as possible.
  • Build relationships with GoI-funded incubators, who run/understand these funding schemes.
  • Maintain a track record of good proposals, timely execution & transparent, detailed paperwork.

Tools

  • Venture Center's exhaustive database of funding sources for technology innovators & entrepreneurs in India

Perspectives