Startup India Scheme
The Startup India Scheme was launched by the Government of India on January 16, 2016 to promote
entrepreneurship and innovation, and to create a strong ecosystem for startups in India. The scheme aims to support
new businesses by offering financial benefits, regulatory relaxations, and other incentives to help them grow and
thrive.
Key Features:
1. Simplified Registration:
o Startups can register online, making it easy to start a business with minimal paperwork.
o Self-certification for labor and environmental laws reduces compliance requirements.
2. Tax Benefits:
o 3-Year Tax Holiday: Startups can enjoy tax exemptions for the first 3 years of operation.
o Capital Gains Tax Exemption: Investments in startups are exempt from long-term capital gains
tax under certain conditions.
3. Financial Support:
o Fund of Funds: The government has set up a ₹10,000 crore fund to help startups with financial
backing.
o Credit Guarantee Fund: Helps startups access loans by providing guarantees to lenders.
4. Easier Compliance:
o Faster approvals and fewer regulations for setting up and running a business.
o A single-window clearance system to reduce bureaucracy.
5. IPR Support:
o Startups can avail themselves of reduced fees for patents, trademarks, and designs. Fast-tracking of
intellectual property applications is also available.
6. Mentorship and Networking:
o Access to incubation centers, investors, and mentors who can provide guidance and support.
7. Government Procurement:
o Startups are given priority in government procurement, allowing them to secure contracts with
government departments.
Eligibility:
To qualify for benefits under the scheme, a startup must:
• Be less than 10 years old.
• Have an annual turnover of less than ₹100 crore.
• Focus on innovation, technology, or intellectual property generation.
Impact:
The scheme has helped thousands of new businesses to start and scale, creating jobs and fostering a culture of
innovation. It has also attracted both domestic and international investment, boosting India’s startup ecosystem.
Conclusion:
The Startup India Scheme is a major initiative that aims to make India a global hub for innovation and
entrepreneurship. By providing financial, regulatory, and institutional support, it helps startups grow and contribute
to the economy.
WAYS TO FUND STARTUP
1. Bootstrapping (Self-funding)
• What it is: Using your own savings or personal assets to fund your startup.
• Pros: Full control over your business, no need to share equity or decision-making.
• Cons: Risk of personal financial loss if the business fails.
2. Friends and Family
• What it is: Borrowing money or accepting investments from close friends or family members.
• Pros: Relatively easy and fast, as they may trust you more than traditional investors.
• Cons: Can strain relationships if the business fails or doesn’t perform well.
3. Angel Investors
• What it is: Individuals who provide capital for startups in exchange for equity or debt.
• Pros: Can bring not only money but also expertise, connections, and advice.
• Cons: You give up some ownership and control of your company.
4. Venture Capital (VC)
• What it is: Investment from firms or groups that provide large sums of money in exchange for equity,
usually when your startup is growing quickly.
• Pros: Provides significant funding to scale quickly and can add valuable business mentorship.
• Cons: VCs often require significant equity and influence over business decisions.
5. Crowdfunding
• What it is: Raising small amounts of money from a large number of people, typically through online
platforms (e.g., Kickstarter, Indiegogo).
• Pros: Can validate your business idea, raise awareness, and gain early customers.
• Cons: Requires marketing effort and may not guarantee success.
6. Grants and Competitions
• What it is: Funding from government bodies, nonprofit organizations, or private companies offering grants
or prizes for innovative business ideas.
• Pros: Non-repayable and doesn't require equity.
• Cons: Competitive and often involves a long application process with no guarantee of funding.
7. Bank Loans or Lines of Credit
• What it is: Traditional loans or lines of credit from a bank or financial institution.
• Pros: Can get relatively quick access to funds if you have a strong credit history.
• Cons: Risk of debt and possible collateral requirements; interest payments.
8. Accelerators and Incubators
• What it is: Programs that provide funding, mentorship, and resources to early-stage startups in exchange
for equity.
• Pros: Access to mentors, funding, and a structured program to help your business grow.
• Cons: Equity is typically given in exchange for their services and support.
9. Strategic Partnerships
• What it is: Partnering with larger companies or other startups to share resources or co-invest in your
business.
• Pros: Can bring in funding, expertise, and open new markets.
• Cons: Might involve sharing profits or decision-making.
10. Revenue-Based Financing
• What it is: A financing model where you repay the investors as a percentage of your revenue, typically
used by businesses with steady income.
• Pros: Flexible repayments based on your revenue.
• Cons: It can be expensive in the long run compared to traditional loans.
11. Family Offices
• What it is: Wealthy individuals or families who invest in startups, often in industries they're passionate
about or have experience in.
• Pros: Can provide large amounts of capital, with more flexible terms than VCs.
• Cons: Often limited to certain industries or regions.
• Aspect Entrepreneurship Management
What it is Starting and building a new business or idea. Running and organizing a business or team.
Making sure things run smoothly and
Main Focus Finding new ideas and opportunities.
efficiently.
Lower risk, as it’s about managing an
Risk High risk, because it’s new and uncertain.
existing business.
To meet goals and keep the business running
Goal To create something new and successful.
well.
Creative and innovative, thinking about the Practical and organized, focused on the
Type of Thinking
future. present.
The person who manages and leads teams or
Role The founder or creator of the business.
projects.
Decisions are made with little information, Decisions are based on facts, rules, and past
Decision Making
often risky. experience.
Using the current resources to make the
Resources Finding new resources to build the business.
business better.
Time Focus Long-term vision and future growth. Short-term goals and current operations.
Lots of creativity to develop new products or More focus on improving and managing
Creativity
services. what exists.
Organization, problem-solving, and team
Skills Needed Creativity, risk-taking, leadership, and vision.
management.
Work Style Flexible, changes often, and new challenges. More stable, with routine tasks and set roles.
Work
Informal, may change as the business grows. More formal, with clear rules and roles.
Environment
Example Starting a new tech startup. Managing a team in an established company.
