Page 42 - Banking Finance December 2017

ARTICLE

Y They're chosen to stay private till they're in a better i. Concept and Startup funding:
condition for an Initial Public Offer (IPO) Y Early stage startups rely on angel investors and seed
funding
V. Startup India Financing Life Cycle
Y Invest solely into the entrepreneur with an idea
The startup companies are having four levels of funding
which are represented by the following graph. Y Does not encumber the entrepreneur with any corpo-
rate governance formalities.

ii. Growth Funding:
Y Used to scale the company's business model
Y Comes from larger institutional funds
Y Focus is on building the sales force and establishing a
global presence

iii. Expansion Funding:
Y Late stage startups can feel the need to expand more
aggressively or actively innovate the product
Y Private equity funds together with public markets pro-
vide large amounts of liquidity to late stage startups.
VI. Government Initiatives

The government of India has been taken some initiatives
towards the startup companies, those initiatives are repre-
Source : NASSCOM senting the below table.

2015 2025

Total number of
Startups 10,000 25,000
Employment
generation ('000) n/a 3,500
Expected contribution
(US$ b) n/a 500
Global startup 3rd (Behind the US and the UK) Aims to be No. 1
ranking
Driving factors O An emerging O Growing middle O Increasing internet users
economy class O Urbanization
O Young population O Rise in discretionary O Increasing domestic consumption
O Easing FDI norms spending
O Focus on standard of
living
Challenges for O Lack of awareness O Unorganized market O Stringent Exit policies
startups O Multiple clearance O Infrastructure in Tier O Ease of doing business
requirement II & III cities O Corruption/red tape
O Multi-tax existence O Lack of early stage O Technological risk
(Octroi, VAT funding
Excise, ST etc.) O Lack of mentoring

42 | 2017 | DECEMBER | BANKING FINANCE

Sashi Publications Pvt Ltd Call 8443808873/ 8232083010