Table of Contents
Startup India: What is it?
What is the Startup India Seed Fund Scheme?
The SISFS's goals
Eligibility Criteria for Startups
- A DPIIT-recognized startup that was only two years old when the application was submitted. Visit https://www.startupindia.gov.in/content/sih/en/startupgov/startup-recognition-page.html to become DPIIT-recognized.
- The Startup needs a solid business plan before it can create a good-fitting product or service that can be scaled up.
- The Startup should incorporate technology into its main product or service, business plan, distribution strategy, or technique in order to address the issue at hand.
- Startups developing cutting-edge solutions in fields like social impact, waste management, water management, financial inclusion, the inclusion of underserved populations, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defense, space, railways, oil and gas, textiles, etc. would be given preference.
- In accordance with any other Central or State Government program, the Startup should not have had greater financial assistance than Rs 10 lakh. This excludes prize money from contests and big challenges, free workspace, a monthly founder allowance, access to labs, and access to prototype facilities.
- According to the SEBI (ICDR) Regulations of 2018 and the Companies Act of 2013, the Startup’s Indian promoters must own at least 51% of the company’s shares at the time they apply to the incubator for the program.
- According to the program’s rules, a startup applicant may receive seed funding once, each in the form of a grant and in the form of debt or convertible debentures.
The Need for Funding in Startups
- Creation of prototypes
- Product Creation
- Group hiring
- Employing Money
- Advisory & Legal Services
- Raw materials and tools
- Regulations & Certifications
- Promoting and selling
- Office costs and admin fees
How to Raise Startup Funds
#1 Identifying the Funding Need
#2 Investment Readiness Evaluation
- Increased revenue and market position
- satisfactory return on investment
- Time to profitability and break-even
- startup’s originality and competitive advantage
- The goal and future objectives of the business owners
- dependable, driven, and talented team
#3 Creating a pitch deck
#4 Investor Orientation
- Track down active investors
- their preferred industries
- geographical area
- Average fundraising ticket size
- Level of involvement and mentoring offered to startup investors
- Pitching occasions present a beneficial chance to speak with possible investors face-to-face.
- Pitch decks can be sent to the contact email IDs of angel networks and venture capitalists.
#5 An investigation by Potential Investors
#6 Term Sheet
What qualities do investors seek in startups?
- Problem-solving and objectivity: Any startup should differentiate its offering to address a particular consumer need or to address a particular customer problem. Patented concepts or goods provide investors with significant development potential.
- Administration & Team: In addition to all the previously listed characteristics, the founders and the management team’s drive, expertise, and talents to move the company ahead are equally important.
- Market Environment: Market size, attainable market share, rate of product adoption, historical and projected market growth rates, and macroeconomic factors influencing the market you intend to target.
- Sustainability & Scalability: Startups should demonstrate their ability to grow quickly, paired with a solid and viable business plan. They should also think about expansion goals, growth rate, imitation costs, and obstacles to entry.
- Clients and Suppliers: Clearly, state who your suppliers and customers are. Take into account your product’s stickiness with customers, vendor agreements, and current vendors.
- Competitive Research: The competition and other market participants who are working on related projects should be accurately depicted. Although it is impossible to compare apples to apples, it is crucial to highlight the service or product offers of competitors in the same industry. Consider…
- Selling and marketing: No matter how amazing your product or service is, if there is no market for it, it is useless. A sales estimate, targeted audiences, product mix, conversion and retention rates, etc., are a few things to think about.
- Financial Evaluation: A thorough financial business plan that shows cash flows over time, investments needed to reach important milestones, break-even points, and growth rates. At this point, assumptions should be acceptable and explicitly stated.
- Avenues of exit: A startup showing prospective buyers or allies becomes an important consideration for the investor. Initial public offerings, purchases, and additional investment rounds are a few examples of exit strategies.