It is a wonderful feeling when your start-up fairy tale begins to unfold. Your product begins to attract customers, you manage to bring together a great team, and you even find VCs scrambling to invest in your start-up. All in all, everything seems to be falling into place perfectly. If all this seems too good to be true, then probably it is!
Start-up stories are anything but a fairy tale. The journey of a start-up, in India or elsewhere in the world, is hardly less than nerve-wracking or a roller coaster ride.
The Resilient Ecosystem
The current Indian start-up ecosystem is abuzz with a flurry of activity where many first generation entrepreneurs are testing and marketing unique B2B or B2C solutions in the healthcare, technology, societal and other spaces across many cities.
The financial bloodbath that sparked attrition and closure in the start-up space in the last couple of years is over, and ‘I too can do it’ movement is again gaining ground among the wannabe entrepreneurs.
India has become the third-largest start-up ecosystem in the world in terms of the growth of start-ups. This number is expected to rise almost four times, from 3,100 in 2014 to over 11,500 tech startups by 2020.
The mentoring infrastructure of incubation and accelerator facilities has grown, particularly after the booster shot of Startup India initiative launched by the government in 2016.
States Support for Start-ups
Startup India is an initiative which fosters entrepreneurship and innovation in the country and facilitates an environment conducive for entrepreneurial growth.
According to Nasscom, there were 190 incubators and accelerators in the country in 2017. Incubators or accelerators are either academic or government-supported like Atal Incubation Centres, NSRCEL at IIM Bangalore, SINE at IIT Bombay, or business incubator like UDGAM.
The Department of Industrial Policy and Promotion (DIPP), a wing under Commerce Ministry is expected to release the State Startup Index in June. The index will rank all the 18 states participating in the Startup India initiative as per their performance in seven parameters: adoption of the start-up policy, its implementation, funding support, which includes, seed funding, angel, and venture capital funding, number of incubators, simplified regulations, promotion, awareness and outreach of the campaign, and ease of public procurement.
Budget 2018 for Start-ups
No start-up ecosystem can thrive without the sustained support of the government. The Budget 2018 announced a slew of proposals that would, directly and indirectly, bolster the start-up culture in the country.
The Finance Minister Arun Jaitley proposed the creation of a new regulatory regime for venture funds and angel investors, and a separate policy for allowing VC firms to invest in hybrid instruments.
He doubled the allocation for Digital India to Rs 3,073 crore, which is expected to promote start-ups working in digital manufacturing space, research, training, and skilling in robotics, big data analysis, artificial intelligence, quantum communication, and the Internet of Things.
The Way Forward
Even as the government is working to strengthen the start-up ecosystem in the country, entrepreneurs are learning from the reverses of the past. Misjudgements like over-hiring, high cost of acquiring customers, unrealistic salaries had marred many start-ups resulting in failure of many start-up ventures in the last couple of years.
The resurgence of entrepreneurship in the country is witnessing more products emerging under the B2B category. Products catering to tier-2 and tier 3-cities, as well as offline consumer models are appearing better off in finding feet and grabbing VC funding.
A start-up facing constant growth pangs may never witness a fairy tale success, yet it holds a huge potential to become an inspirational narrative.
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