1. Stopping as vital as starting: Silicon Valley

Stopping as vital as starting: Silicon Valley

Not just starting start-ups but their winding-up should also be much easier than now if a prolific number of such enterprises were to sprout on Indian soil and flourish, the government was told on Friday

By: | New Delhi | Updated: January 16, 2016 12:34 AM

Not just starting start-ups but their winding-up should also be much easier than now if a prolific number of such enterprises were to sprout on Indian soil and flourish, the government was told on Friday, a day before the mega-launch of an action plan on its Start-up India programme.

A veritable galaxy of Silicon Valley leaders invited by the government to inspire local start-ups have also stressed the need for larger and diversified avenues for the budding entrepreneurs to raise capital and tax treatment akin to the one for Mauritius-based entities for US- and Europe-based investors as well.

Most of the 40-odd angel investors and venture capitalists who will be attending Saturday’s event — including Venktesh Shukla, president of TiE, Kanwal Rekhi, partner of Inventus Capital, Ram Reddy, founder of Global Industry Analyst, and Vinod Dham, managing director of Indo-US Venture Partners — met President Pranab Mukherjee on Friday evening. They are scheduled to meet Prime Minister Narendra Modi on Saturday.

Some 70% of jobs are created by start-ups and small businesses in the US where 2% of the population turn entrepreneurs,they said.

So to create a large number of jobs, India needs to focus more on creating a viable ecosystem for start-ups. “Most of the start-ups fail. So if they are not allowed to wind down, not many will come forward to invest in them,” said Shukla. Ease in raising money and adequate credit availability are equally important, he added.

Rekhi said the government should offer tax relief to US investors so that they can invest directly in Indian start-ups instead of routing the funds through tax havens. Currently, most of the investments in start-ups are routed through Mauritius, he added.

Echoing similar sentiments, Saurabh Srivastava, chairman-emeritus of the TIE Delhi-NCR chapter, said in a separate function organised by Ficci, “The government could look at extending debt financing to start-ups, besides creating funds of funds. Start-ups’ access to domestic capital should be enhanced by way of regulatory changes.” He added that the Securities and Exchange Board of India should ease the norms for venture capital investment to boost entrepreneurship in the country.

For example, from 1977 until now, barring about seven years of slowdown, most of the jobs created in the US were by start-ups from Silicon Valley, said Srivastava, who also heads the Indian Venture Capital Association. The Indian government aims create at least 10 million jobs every year for its large youth population.

“Start-ups require help in scaling up, in recruiting and retaining talent and in dealing with the government as buyers of their products as well as provider of regulatory ambience,” said Yogesh Andalay co-founder, Nucleus Software and Polaris Financial Technology.

The proposed one-day brainstorming session for the Start-up India programme on Saturday will have a dedicated panel discussion on “Inspirations From Silicon Valley”, to be moderated by IDG Ventures India founder-chairman Sudhir Sethi. Apart from Rekhi and Reddy, Shalini Govil Pai, senior director of Google and YouTube, Anand Rajaraman, founding partner of Milliways Ventures, and Asha Jadeja Motwani, founder of DotEdu Ventures, will participate in the panel discussion.

As many as 14 sessions of discussions will be held throughout the day before Modi unveils the action plan in the evening. Interactive sessions with global business leaders, including SoftBank founder and chief executive Masayoshi Son, Uber founder Travis Kalanick and WeWork founder Adam Nuemann, will be a crucial part of the event.

Many leaders of Indian start-ups and businesses — including Flipkart founder Sachin Bansal, Snapdeal’s Kunal Bahl and Ola founder Bhavish Aggarwal — will also attend. The action plan is expected to include the definition of start-ups and various incentives to be offered by the government.

  1. Hemen Parekh
    Jan 21, 2016 at 6:04 am
    START UP RE-DEFINED No doubt , you have read the definition of a Start Up in the Start Up Action Plan doent I have tried to envisage below, how that might look on that Mobile App for Registration : * Is yours a Private Ltd Co / LLP / Partnership ?........................................... Yes / No * Is your Company more than 5 years old ?....................................................Yes / No * Is your Start Up formed by splitting an existing business ?............................ Yes / No * In last 5 yrs, has your turnover exceeded Rs 25 Crores ?............................. Yes / No * Is your product/service " DIFFERENTIATED " ?............................................ Yes / No * Is your product / service " COMMERCIAL " ?............................................... Yes / No * Is your product / service " INNOVATIVE " ?................................................ Yes / No * Is your product / service driven by , " TECHNOLOGY / INTELLECTUAL PROPERTY " ? ............................................Yes / No * Is your product/service , " NEW / SIGNIFICANTLY IMPROVED " version " ?.................... ...................... Yes / No * Does your product/service add " VALUE " to customers ?................................ Yes / No * Does your product/service add " VALUE " to " WORKFLOW " ?......................... Yes / No * Have you got certification from Inter-Ministerial Board ?................................ Yes / No * Have you got recommendation from Incubator in Post Grad Indian College ?.......Yes / No MY TAKE : # Each year 12 million persons join India's work force # Of these , 3.5 million are Graduates # Rest ( 8.5 million ) are 10th / 12th Standard p or less # No more than 1,000 persons will fulfill above mentioned " Eligibility Criteria " for Start Up # There will be endless debates on the correct meaning of words in CAPITAL letters above ! WHY SUCH STRINGENT " ELIGIBILITY CRITERIA " ? # At Rs 2.5 cr loan per Start Up, Govt Fund of Rs 2500 Cr can help only 1,000 Start Ups ! # Any relaxation in " eligibility criteria " , may result in MILLIONs of persons queue-up ! WHAT IS THE IMPLICATION ? # Funds are just insufficient to help 12 million persons to become " Self Emplo " MY SUGGESTION : In India , we are talking of getting " Unemplo " to launch " Start Ups " Anywhere between 100 million to 400 million " Unemplo " for whom neither Public Sector nor Private Sector , is in any position to create jobs We want them to become " Self Emplo " - what Shri Narendra Modi described in USA , as our " PERSONAL SECTOR " They are unlikely to launch technology driven , Web-based businesses , even if their businesses require them to have a Smart phone , on which , their customers can reach them They aspire to become ( list can run into 200 trades ! ) : * Street-side Vendors ( Vegetables / Shoes / Purses / Fruits / Trinkets ) * Craftsmen ( Plumber / Electrician / Carpenter / Repairer ) * Dhobi / Barber / Pan Beedi shop-owner / Tailor / Mochi * Doodh-wala / Ruddi Paper-wala / Gajra-wala / Delivery Boy * Cook / Maid / Courier / Tuition Teacher / Beautician / Taxi Driver * Home-cooked Tiffin Service / Car wash / Gardening ...... How can we help millions of JOBLESS to set up such MICRO - BUSINESSES ? By Government ( Central / State / Munil ) getting out of their way ! HOW ? * No licenses / permits / approvals / conditions / criteria * Simple online registration on proposed Web site of DIPP for Start Ups * No personal Income tax for individuals * No Corporate Income tax for Start Ups for 10 years ( no chance of profit in first 3 years ) * Amnesty Scheme for enabling Rs 10 million*crores of BLACK MONEY to flow into such Self Employment It is still not too late for our Policy Makers will think " Out of Box " and implement : > Blogs > A New Economic Order - Start Up Act - 2015 Anything less just won't make much of a difference ! ------------------------------------------------------------------------------------------------------ hemen parekh 21 Jan 2016
    Reply

    Go to Top