“STUDY OF STARTUPS IN INDIA”

A Project Submitted to
University of Mumbai for partial completion of degree of
Bachelor of Management Studies
Under the Faculty of Commerce

By

MS.KUNIKA BALKRISHNA MANE

Under the guidance of

Mrs. Vibha Dicondwar

Modern Education Society’s

D.G Ruparel College of Arts, Science & Commerce
Mahim, Mumbai-400 016
March 2023
 Certificate

This is to certify that Ms. Kunika Balkrishna Mane student of TYBMS Semester VI
of the D. G. Ruparel College of Arts, Science and Commerce has successfully
completed the project report on “Study of Startups in India” under the guidance of
Mrs. Vibha Dicondwar for the academic year 2022-23.

INTERNAL EXAMINER EXTERNAL EXAMINER

(MRS.VIBHA DICONDWAR)

DR. NEETA TATKE SEAL OF THE COLLEGE

(VICE PRINCIPAL)

Date of Submission: ___/___/______

Place: Mumbai
 Declaration by learner

I the undersigned Ms.Kunika Balkrishna Mane here by, declare that the work
embodied in this project work titled “Study of Startups in India" forms my
own contribution to the research work carried out under the guidance of Mrs.
Vibha Dicondwar is a result of my own research work and has not been
previously submitted to any other University for any other Degree/ Diploma to
this or any other University.

Wherever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained
and presented in accordance with academic rules and ethical conduct.

________________________
Kunika Balkrishna Mane
CERTIFIED BY

_______________________
Mrs. Vibha Dicondwar
(Project Guide)

Date: ___/___/______
Place: Mumbai
 Acknowledgement

To list who all have helped me is difficult because they are so numerous and the depth
is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.

I would like to thank my I/C Principal, Dr. Dilip Maske for providing the necessary
facilities required for completion of this project.

I take this opportunity to thank our Coordinator Dr. Neeta Tatke for her moral
support and guidance.

I would like to express my sincere gratitude towards my Project Guide Mrs. Vibha
Dicondwar whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference
books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped
me in the completion of the project especially my Parents and Peers who supported
me throughout my project.
 INDEX
SR NO PARTICULARS PAGE NO

1 CHAPTER 1 : Introduction 1-49

1.1 Introduction of Startups in India 1
1.2 Definition 2
1.3 Types of startups 3
1.4 Why funding is Required b startups 7
1.5 Stages of startups and source of funding 9
1.6 Steps to startup fund Rising 14
1.7 What do investors look for in startup 17
1.8 Government Schemes 19
1.9 Startup balance sheet: why you need one & how 24-30
to prepare it
1.10 Benefits of startups government schemes in India 31
1.11 Impact of startups on GDP/Indian economy 32-36
1.12 Startup business loan 37-40
1.13 States in India has more numbers of startups 41-42
1.14 Shark tank India 43-46
1.15 Case study-1 (SWIGGI) 47-50
1.16 Case study-2 (Paytm) 51-56
2 Chapter 2:Research Methodology 57-62
2.1 Methodology 57
2.2 Sampling and Data Collection 58
2.3 Objective of Study 59
2.3 Significance of Study 60
2.4 Scope of Study 61
2.5 Limitation of study 62
3 Chapter 3:Literature Review 63-64
4 Chapter4:Interview and Data Analysis, 65-80
Interpretation and Presentation
4.1 Interview 65-66
4.2 Data Analysis, Interpretation and Presentation 67-80
5 Chapter 5:Conclusion and suggestion 81
6 Chapter 6: Bibliography 82
7 Chapter 7: Annexure 83-85
 CHAPTER 1

1.1 INTRODUCTION

A startup venture could be defined as, a new business that is in the initial stages of
operation, beginning to grow and is typically financed by an individual or small group
of individuals and Government of India It is a young entrepreneurial, scalable
business model built on technology and innovation wherein the founders develop a
product or service for which they foresee demand through disruption of existing or by
creating entirely new markets. Startups are nothing but an idea that manifests into a
commercial undertaking.

Why Startup India?

Startup India is about creating prosperity in India. Many enterprising people who
dream of starting their own business lack the resources to do so. As a result, their
ideas, talent and capabilities remain untapped – and the country loses out on wealth
creation, economic growth and employment. Startup India will help boost
entrepreneurship and economic development – by ensuring that people who have the
potential to innovate and start their own business are encouraged – with proactive
support and incentives at multiple levels. Indian government is serious in promoting
entrepreneurship at the startup level and has taken a number of initiatives to ensure
appropriate support. In this aspect it is relevant to mention ‘Make in India’ campaign
introduced in September ’14 to attract foreign investments and encourage domestic
companies to participate in the manufacturing sector. The government increased the
foreign direct investment (FDI) limits for most of the sectors and strengthened
intellectual property rights (IPRs) protection to instill confidence in the startups. In
order to make the country as number one destination for startups, Government of

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India has introduced a new campaign called ‘Standup India’ in 6th January , 2016
aimed at promoting entrepreneurship among women and to help startups with bank
funding.

1.2 DEFINATION

The term startup refers to a company in the first stages of operations. Startups are
founded by one or more entrepreneurs who want to develop a product or service for
which they believe there is demand. These companies generally start with high costs
and limited revenue, which is why they look for capital from a variety of sources
such as venture capital.

KEY TAKEAWAYS

 A startup is a company that's in the initial stages of business.

 Founders normally finance their startups and may attempt to attract outside
investment before they get off the ground.
 Funding sources include family and friends, venture capitalists, crowd
funding, and loans.
 Startups must also consider where they'll do business and their legal structure.
 Startups come with high risk as failure is very possible but they can also be
very unique places to work with great benefits, a focus on innovation, and
great opportunities to learn.

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 1.3 TYPES OF STARTUP

1. LIFESTYLE STARTUP:

Lifestyle Startups are created by lifestyle entrepreneurs. These individuals turn their
lifestyle into a business opportunity. Examples include a musician teaching guitar to
underprivileged youth, or a travel blogger documenting personal trips. This business
model stems from the entrepreneur's passion; it's less focused on profits than other
types. The goal of a lifestyle startup is to spread the founder's passion.

 Bootstrapped of Self-funded
 Slow growth or no growth at all
 No exit strategy per se as the business is part of founders’ lifestyles
 Focus on profits at all times (as they don’t have external capital)

2. SMALL BUSINESS STARTUP:

Small Business Startups are simple; they feature people who work for themselves
instead of a traditional company that might employ someone in their profession.
Small business startups are different. From solo businesses and partnerships to small

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teams, these startups are happy staying startups as they sell their products and
services. And while they’re interested in growth, they grow at their own pace. Such
startups are often bootstrapped or self-funded, meaning that there’s less pressure to
scale ASAP or be beholden to the immediate needs of investors. Examples include
handymen, personal trainers, and boutique owners. These businesses aren’t meant to
make it big or change the world; they are intended to provide financial compensation
to the owner. The business is the owner’s source of income.

3. SCALABLE STARTUP:

A scalable startup is one that starts with an innovative idea and creates a business
model designed to turn the company into a profitable, high growth enterprise.
Scalable startups succeed by either entering a large market and taking market share
away from other companies or creating a market and growing it rapidly. This type of
startup is the most common among traditional technology entrepreneurs. Unlike small
businesses which are everywhere, scalable startups tend to be concentrated in the
world's technology hubs and only constitute a small percentage of entrepreneurial
ventures. Scalable startup entrepreneurs start their venture with the belief that their
vision will change the world and make them lots of money. A scalable startup starts
with the search for a repeatable and scalable business model. Outside venture capital
in the tens of millions is usually required so that a startup can meet market demand
and scale. Startup entrepreneurs need to sell investors on their vision in order to hire
employees and acquire their first.

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It involved everything that ranges from creating a plan to all the way up launching the
business. This form of Entrepreneurship involved a great sort of work, education, and
experience. This type of entrepreneurship commences with a vision that they can
make some changes in the world. Their investment comes from the venture capitalist
as well as by employing efficient employees. Their goal is to find out the repeatable
and scalable business model. Once they find that model, they further started raising
funds from venture capitalists for the growth of the business.

4. BUYABLE STARTUP:

A buyable startup is all about establishing startups with the end aim of selling them
for a profit. These are companies formed with the sole intention of being sold to a
larger company in the same niche. The expertise of a buyable startup lies in
developing web-based and mobile apps, and they are set up with the bare minimum in
capital investment to be taken over by internet conglomerates. Buyable startups work
on a temporary model basis and are usually sold off when their value peaks.

Bigger firms are always on the lookout for a buyable startup that can
complement their existing operations. These startups are routinely established and
sold once they turn profitable.

5. LARGE COMPANY STARTUP:

Companies that start small with a product that’s revolutionary, but go on to be

globally recognized are considered large company startups. These companies reach
the end of their life cycle fairly quickly. Therefore, in order to keep growing as a
company they need continuous sustaining innovation (variants of the core product)
and/or disruptive innovation (new products for new markets). These startups become
self reliant in all kinds of software, web and mobility development. It’s one of their
core competencies and thus continues to adapt and grow as the demand and trends of
technology change.

Large companies despite their seeming stability and large revenues are
constantly threatened by inventive and innovative competition from other large
organizations. Together with changes in customer tastes, new technologies and
legislation such competition can create pressure for more disruptive innovation. This

5
means that companies have to invest into improving efficiency and also fresh skills and
structures, requiring development of entirely new products that might be sold to new
customers in new markets.

6. SOCIAL STARTUP:

This type of startups involves usually some form of charitable foundation. Their goal is
to make the world a better place, but, unlike scalable startups, their owners are not
driven by the wish of wealth or power. In principle, these startups can be organized as
a for-profit, non-profit or hybrid and they usually depend on donations from the
likeminded people.
Social Startups are intended to make a difference in the world. One of the
most famous examples would be Ben & Jerry’s ice cream, whose goal is prison
reform. This company, however, still aims for profits; some other social startups are
technically non-profit. These organizations are oriented solely towards improving the
world in some way. Corporate social responsibility. Or (CSR) is great place to start if
your company is interested in making a difference.

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 1.4 WHY FUNDING IS REQUIRED BY STARTUPS

A startup might require funding for one, a few, or all of the following purposes. It is
important that an entrepreneur is clear about why they are raising funds. Founders
should have a detailed financial and business plan before they approach investors.

 Prototype Creation  Product Development

 Team Hiring  Working Capital

 Legal & Consulting  Raw Material &

Services Equipments

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 Licenses &  Marketing & Sales
Certifications

 Office Space & Admin

Expenses

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 1.5 STAGES OF STARTUP AND SOURCE OF EUNDING

There are multiple sources of funding available for startups. However, the source of
funding should typically match the stage of operations of the startup. Please note that
raising funds from external sources is a time-consuming process and can easily take
over 6 months to convert.

1. IDEATION:

This stage where the entrepreneur has an idea and is working on bringing it to life. At
this stage, the amount of funds needed is usually small. Additionally, at the initial
stage in the startup lifecycle, there are very limited and mostly informal channels
available for raising funds.

Pre-Seed Stage:

 Bootstrapping/Self-financing:

Bootstrapping a startup means growing the business with little or no venture capital or
outside investment. It means relying on your savings and revenue to operate and
expand. This is the first recourse for most entrepreneurs as there is no pressure to pay
back the funds or dilute control of your startup.

 Friends & Family

This is also a commonly utilized channel of funding by entrepreneurs still in the early
stages. The major benefit of this source of investment is that there is an inherent level
of trust between the entrepreneurs and the investors

 Business Plan/Pitching Events

This is the prize money/grants/financial benefits that are provided by institutes or

organizations that conduct business plan competitions and challenges. Even though
the quantum of money is not generally large, it is usually enough at the idea stage.
What makes the difference at these events is having a good business plan.

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2. VALIDATION:

At this stage, a startup has a prototype ready and needs to validate the potential
demand of the startup’s product/service. This is called conducting a ‘Proof of Concept
(POC)’, after which comes the big market launch.

Seed Stage:

A startup will need to conduct field trials, test the product on a few potential
customers, onboard mentors, and build a formal team for which it can explore the
following funding sources:

 Incubators:

Incubators are organizations set up with the specific goal of assisting entrepreneurs
with building and launching their startups. Not only do incubators offer a lot of value-
added services (office space, utilities, admin & legal assistance, etc.), they often also
make grants/debt/equity investments.

 Government Loan Schemes

The government has initiated a few loan schemes to provide collateral-free debt to
aspiring entrepreneurs and help them gain access to low-cost capital such as the
Startup India Seed Fund Scheme and SIDBI Fund of Funds.

 Angel Investors

Angel investors are individuals who invest their money into high-potential startups in
return for equity. Reach out to angel networks such as Indian Angel Network,
Mumbai Angels, Lead Angels, Chennai Angels, etc., or relevant industrialists for
this.
 Crowdfunding
Crowdfunding refers to raising money from a large number of people who each
contribute a relatively small amount. This is typically done via online crowdfunding
platforms.

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3. EARLY TRACTION:

At the Early Traction stage startup’s products or services have been launched in the
market. Key performance indicators such as customer base, revenue, and app
downloads, etc. become important at this stage.

Series A Stage:

Funds are raised at this stage to further grow the user base, product offerings, expand
to new geographies, etc. Common funding sources utilized by startups in this stage
are:

 Venture Capital Funds

Venture capital (VC) funds are professionally managed investment funds that invest
exclusively in high-growth startups. Each VC fund has its investment thesis –
preferred sectors, stage of the startup, and funding amount – which should align with
your startup. VCs take startup equity in return for their investments and actively
engage in the mentorship of their investee startups.

 Banks/Non-Banking Financial Companies (NBFCs)

Formal debt can be raised from banks and NBFCs at this stage as the startup can show
market traction and revenue to validate its ability to finance interest payment
obligations. This is especially applicable for working capital. Some entrepreneurs
might prefer debt over equity as debt funding does not dilute equity stake.

 Venture Debt Funds

Venture Debt funds are private investment funds that invest money in startups
primarily in the form of debt. Debt funds typically invest along with an angel or VC
round.

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4. SCALING:

At this stage, the startup is experiencing a fast rate of market growth and increasing
revenues.

Series B, C, D & E

Common funding sources utilized by startups in this stage are:

 Venture Capital Funds:

VC funds with larger ticket sizes in their investment thesis provide funding for late-
stage startups. It is recommended to approach these funds only after the startup has
generated significant market traction. A pool of VCs may come together and fund a
startup as well

 Private Equity/Investment Firms:

Private equity/Investment firms generally do not fund startups however, lately some
private equity and investment firms have been providing funds for fast-growing late-
stage startups who have maintained a consistent growth record.

5. EXIT OPRATION:

Mergers & Acquisitions

The investor may decide to sell the portfolio company to another company in the
market. In essence, it entails one company combining with another, either by
acquiring it (or part of it) or by being acquired (in whole or in part).

Initial Public Offering (IPO)

IPO refers to the event where a startup lists on the stock market for the first time.
Since the public listing process is elaborate and replete with statutory formalities, it is
generally undertaken by startups with an impressive track record of profits and who
are growing at a steady pace.

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Selling Shares

Investors may sell their equity or shares to other venture capital or private equity
firms.

Buybacks

Founders of the startup may also buy back their shares from the fund/investors if they
have liquid assets to make the purchase and wish to regain control of their company.

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 1.6 STEPS TO STARTUP FUND RAISING

The entrepreneur must be willing to put in the effort and have the patience that a
successful fund-raising round requires. The fund-raising process can be broken down
into the following steps

1. ASSESSING NEED FOR FUNDING:

The startup needs to assess why the funding is required, and the right amount to be
raised. The startup should develop a milestone-based plan with clear timelines
regarding what the startup wishes to do in the next 2, 4, and 10 years. A financial
forecast is a carefully constructed projection of company development over a given
time period, taking into consideration projected sales data, as well as market and
economic indicators. The cost of Production, Prototype Development, Research,
Manufacturing, etc should be planned well. Basis this, the startup can decide what the
next round of investment will be for.

2. ASSESSING INVESTMENT READINESS:

While it is important to identify the requirement of funding, it is also equally

important to understand if the startup is ready to raise funds. Any investor will take
you seriously if they are convinced about your revenue projections and their returns.
Investors are generally looking for the following in potential investee startups:

 Revenue growth and market position

 Favorable return on investment
 Time to break-even and profitability
 Uniqueness of the startup and competitive advantage
 The entrepreneurs’ vision and future plans
 Reliable, passionate, and talented team

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3. PREPARING OF PITCHDECK:
A pitchdeck is a detailed presentation about the startup outlining all the important
aspects of the startup. Creating an investor pitch is all about telling a good story. Your
pitch isn’t a series of individual slides but should flow like a story connecting each
element to the other.

4. INVESTOR TARGETING:
Every Venture Capitalist Firm has an Investment Thesis which is a strategy that the
venture capitalist fund follows. The Investment Thesis identifies the stage, geography,
focus of investments, and differentiation of the firm. You can gauge the Investment
Thesis of the company by thoroughly going through the company website, brochures,
and fund description. To target the right set of investors, it is necessary to research
Investment Thesis, their past investments in the market, and speak with entrepreneurs
who have successfully risen equity funding. This exercise will help you:

 Identify active investors

 Their sector preferences
 Geographic location
 Average ticket size of funding
 Level of engagement and mentorship provided to investee startups

Pitching events offer a good opportunity to interact with potential investors in person.
Pitchdecks can be shared with Angel Networks and VCs on their contact email IDs.

5. DUE DILIGENCE BY INTERESTED INVESTOR:

Angel networks and VCs conduct thorough due diligence of the startup before
finalizing any equity deal. They look at the startup’s past financial decisions and the
team’s credentials as well as background. This is done to ensure that the startup’s
claims regarding the growth and market numbers can be verified as well as to ensure
that the investor can identify any objectionable activities beforehand. If the due
diligence is a success, the funding is finalized and completed on mutually agreeable
terms.

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6. TEAM SHEET:

A term sheet is a “Non-binding” list of propositions by a venture capital firm at the

early stages of a deal. It summarizes the major points of engagement in the deal
between the investing firm/investor and the startup. A term sheet for a venture capital
transaction in India typically consists of four structural provisions: valuation,
investment structure, management structure, and finally changes to share capital.

 Valuation
Startup valuation is the total worth of the company as estimated by a professional
vaguer. There are various methods of valuing a startup company, such as the Cost to
Duplicate approach, Market Multiple approach, Discounted cash flow (DCF) analysis,
and Valuation-by-Stage approach. Investors choose the relevant approach based on
the stage of investment and market maturity of the startup.

 Investment Structure
It defines the mode of the venture capital investment in the startup, whether it is
through equity, debt, or a combination of both.

 Management Structure
The term sheet lays down the management structure of the company which includes a
list for the board of directors, and prescribed appointment and removal procedures.

 Changes to share capital

All investors in startups have their investment timelines, and accordingly they seek
flexibility while analyzing exit options through subsequent rounds of funding. The
term sheet addresses the stakeholders’ rights and obligations for subsequent changes
in the company’s share capital.

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 1.7 WHAT DO INVESTORS LOOK FOR IN STARTUP

1. OBJECTIVE AND PROBLEM SOLVING:

The offering of any startup should be differentiated to solve a unique customer

problem or to meet specific customer needs. Ideas or products that are patented show
high growth potential for investors.

2. MANAGEMENT AND TEAM:

The passion, experience, and skills of the founders as well as the management team to
drive the company forward are equally crucial in addition to all the factors mentioned
above.

3. MARKET LANDSCAPE:

Market size, obtainable market share, product adoption rate, historical and forecasted
market growth rates, macroeconomic drivers for the market your plans to target.

4. SCALIBILITY AND SUSTAINBILITY:

Startups should showcase the potential to scale in the near future, along with a
sustainable and stable business plan. They should also consider barriers to entry,
imitation costs, growth rate, and expansion plans.

5. CUSTOMERS AND SUPPLIERS:

Clear identification of your buyers and suppliers. Consider customer relationships,

stickiness to your product, vendor terms as well as existing vendors.

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6. COMPETITIVE ANALYSIS:

A true picture of competition and other players in the market working on similar
things should be highlighted. There can never be an apple-to-apple comparison but
highlighting the service or product offerings of similar players in the industry is
important.

7. SALES AND MARKETING:

No matter how good your product or service may be, if it does not find any end-use, it
is no good. Consider things like a sales forecast, targeted audiences, product mix,
conversion and retention ratio, etc.

8. FINANCIAL ASSESSMENT:

A detailed financial business model that showcases cash inflows over the years,
investments required key milestones, break-even points, and growth rates.
Assumptions used at this stage should be reasonable and clearly mentioned.

9. EXIT AVENUES

A startup highlighting potential future acquirers or alliance partners becomes a

valuable decision parameter for the investor. Initial public offerings, acquisitions,
subsequent rounds of funding are all examples of exit options.A detailed financial
business model that showcases cash inflows over the years, investments required key
milestones, break-even points, and growth rates. Assumptions used at this stage
should be reasonable and clearly mentioned.

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 1.8 GOVERNMENT SCHEMES

There are more than 39,000 startups in India at present who have access to many
private equity and debt funding options. However, it is a challenge to get funding
when the business is just an idea or is in the early stage. Also, the Micro, Small, and
Medium Enterprises (MSME) sector in India only has limited access to formal credit
which is why the Government of India decided to roll out startup business loan
schemes for MSMEs and startups.

The Small Industries Development Bank of India (SIDBI) has also begun lending to
startups and MSMEs directly rather than channelizing it through banks. The interest
rates on these loans are lower than the one offered by banks by almost 300 basis
points. Some of the most notable and popular schemes offered by the Indian
government for startups and MSMEs are as follows:

1. STARTUP INDIA INITIATIVE:

The Startup India Initiative is, by far, the largest government scheme for startups in
India. Started by Prime Minister Narendra Modi in 2016, over 50,000 businesses
come under this scheme.

It has an extensive collection of ebooks, courses, and mentorship programs to promote

leadership and skills. Critical benefits of this scheme include:

 Tax exemption
 Cost reduction
 Easy business wind-up option in 90 days.
 Access to funds
 Self-certification under labor and environmental laws
 Fast-track patent registration with an 80% fee rebate.
 Here’s the eligibility for this government scheme..
 The startup should be a registered partnership firm, private limited company,
or LLP.
 Turnover shouldn’t exceed 100 cores in any of the previous financial years.
 The startup must apply within ten years from the date of formation.

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2. STARTUP INDIA SEED FUND SCHEME

The Startup India Seed Fund Scheme (SISFS) provides financial assistance to early-
stage startups for market entry, product trials, commercialization, prototype
development, and proof of concept.

The government has allocated a total budget of 945 cores to this scheme. It expects to
provide funds to 3600 startups. Grants of up to 20 lakh rupees will be provided for
developing trials or prototypes. This scheme also aims to enhance the innovation
culture and development in the country.

Here’s the eligibility criterion for this government scheme for startups.

 The startup must be recognized by DPIIT.

 The product or idea must be scalable, innovative, tech-based, and feasible.
 Indian promoters must hold shares equal to or more than 51%.
 The startup must apply within two years of its incorporation for this scheme.
The USP of this government scheme is that it’s industry agnostic and doesn’t require
physical incubation.

3. PRADHAN MANTRI MUDRA YOJNA:

PMMY is a scheme for startups and MSMEs that aims to provide access to capital
and loans to help ventures sustain and grow their business. Launched in 2015, eligible
applicants can claim loans of up to 10 lakhs for working capital requirements. The
repayment period for loans availed under this scheme is five to seven years.

There are three categories under which loan get provided in PMMY:

 Shishu – Up to 50,000
 Kishor -Up to 5 Lakhs
 Tarun – Between 5-10 Lakhs
Startups must be involved in trading, manufacturing, services, or any other non-farm
business to be eligible for this scheme.

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4. ATAL INNOVATION MISSION:

This scheme belongs to a category of government schemes for startups with a

mandate to promote entrepreneurship and innovation countrywide. The core focus of
this scheme is on tier-2 and tier-3 cities.

Also known as AIM, this scheme provides a platform for promoting world-class
innovation hubs, pectoral focus, grand challenges, and talent initiatives. Some key
programs under this scheme are innovation centers, Atal tinkering labs, community
incubation centers, and innovation centers.

Besides providing financial support and resources to startups, the scheme offers easy
access to information and resources.

5. CREDIT GUARANTEE TRUST FUND:

The Credit Guarantee Trust Fund For Micro & Small Enterprises (CGTMSE)
provides collateral-free loans for MSMEs and selected startups. The amount of these
loans can range up to INR 1 crore. It helps retailers, self-help groups, educational
institutes, SMEs, and farmers.

This scheme facilitates the flow of credit in the startup sector and strengthens the
credit delivery system. The CGTMSE is primarily for service and manufacturing
businesses. Loans under this scheme can be claimed as working capital or term loan.

6. VENTURE CAPITAL ASSISTANCE SCHEME:

It is one of the most sought-after government schemes for startups in the agricultural
sector. Under this scheme, entrepreneurs can receive interest-free debt and OD. It
allows them to cover up their working capital.

The core focus of this scheme is on the development of the Agro-industry. A fund of
INR 10,000 crores was fixed by the government under this scheme. This fund
provides INR 2500 crore as interest-free debt financing to small and marginal
farmers.

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The benefits of this scheme include:

 Overdraft facility and term loan

 Facilitate Agri-based venture setup
 Longer repayment period of up to 5 years.
 Helps startups set up an Agro business by arranging meets, visits, and training.

 Interest-free debt financing from financial institutes.

7. THE STANDUP INDIA SCHEME:

This scheme is one of the few government schemes for startups that encourage
entrepreneurship among scheduled tribes (STs), scheduled castes (SCs), and women
by offering financial help as loans.

The SIC, launched by the Prime Minister in 2016, aims to promote employment
generation for backward castes and women and entrepreneurial spirit in this section.

Banks will provide loans of up to INR 1 crore to at least one SC or ST borrower and a
woman borrower. There’s a flexible loan repayment time of seven years under this
scheme. However, only first-time entrepreneurs can apply for this scheme.

8. DESIGN CLINIC SCHEME:

The government of India wants every startup and MSME to build a design-centric
approach for fueling their business. In order to boost experimentation with new
designs, the MSME Ministry established this scheme.

It aims to encourage an ecosystem of sustainable design through ongoing skill

development and training. The government shall extend up to INR 60,000 for
attending design seminars and up to INR 3.75 lakhs to the startup for conducting the
seminar under this scheme.

The hope behind this scheme is that entrepreneurs would learn the latest trends and
practices about designs and network with like-minded individuals.

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9. RAW MATERIAL ASSISTANCE SCHEME:

This government scheme for startups in India was launched by National Small
Industries Corporation (NSIC). It aims to assist manufacturers and startups with
procuring raw materials. Under this scheme, applicants can claim low-interest loans
and financial help to get raw materials.

10. SINGLE POINT REGISTRATION SCHEME:

This government startup scheme offers a single-window system for filing tenders to
startups and MSMEs. It is administered by the National Small Industries Corporation.

The goal of this scheme is to ease restrictions for startups applying for government
tenders. SRPS reduces the time, cost, and requirements with participation in
government tenders. However, it’s essential that the startup shouldn’t have completed
a year of incorporation if they want to apply for this scheme.

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 1.9 STARTUP BALANCE SHEET: WHY YOU NEED ONE &
HOW TO PREPARE IT

What is a Startup Balance Sheet?

A startup balance sheet or projected balance sheet is a financial statement highlighting

a business startup's assets, liabilities, and owners' equity. In other words, a balance
sheet shows what a business owns, the amount that it owes, and the amount that the
business owner may claim. A balance sheet operates on the principle that the sum of
liabilities and owners' equity equals its assets. If a business is a true startup with no
historical data or assets to the business yet, you can create what is called a projected
balance sheet as well.

Most other startup financial statements are prepared for a given fiscal period, such as
a year or a quarter. A balance sheet precisely represents the startup's financial position
at a point in time. Its contents depend on when it's prepared and reflect every financial
decision made up to that point.

Balance sheets are important financial documents, not only because they give a bird's-
eye view of the entire finances. They also give investors a good idea of how the
business is doing and the assets into which cash is poured. This makes the balance
sheet crucial for securing investments and loans from investment firms, private
investors, and banks.

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Why You Need a Balance Sheet?

Balance sheets are crucial financial statements for every business, including startups.
There are several reasons why your startup will need a balance sheet. Some of them
are:

 It gives a snapshot of the business

As Inc. Magazine showed, most owners of failed businesses do not realize that the
business is failing until it is too late. This occurs because they fail to regularly check
the business's accounts and balance sheets. As a result, they do not make important
changes quickly enough. Checking your balance sheet regularly shows you how
inflow is being managed to facilitate growth.

 It helps your startup secure loans and investments

Before a bank or any other financial institution offers loans to a business, they must
ensure that their financial documents and projections are up-to-date and of a required
standard. Additionally, investors want to be confident in the business owners' ability
to give them a profitable return. A balance sheet is one of the crucial documents that
these institutions will examine to ensure that business owners are competent.

 It reveals trends in the business

Since balance sheets compare the value of specific assets and liabilities over time,
they can show recurring or progressing trends in the business. For example, if you're
constantly overstocked or under stocked, it'd appear in the size of your inventory. If
you're taking more loans than you need, it'd also appear. This allows you to make
changes and improve productivity.

 It contributes to decision making

Business owners need to make sound decisions based on the company's financial
position. A balance sheet is a crucial document that reveals this position. With a good
knowledge of the business's financial position, leaders are better equipped to make
positive decisions for the company.

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What to Include in a Balance Sheet?

The contents of a balance sheet vary widely but belong to one of three classes. This
section describes the contents to include in your startup balance sheet:

 Assets

Assets are items that a business owns and may use to generate profit through its
business activities. The sources of these assets include liabilities, or borrowings, and
equity, which is the amount that the business owner and investors put into the
business. Assets can be divided into two categories – current assets and non-current
(fixed) assets.

Current assets are items that the business can convert to cash in a short period, usually
a year. Current assets include cash, short-term investments, accounts receivable, and
inventories. Typically, they appear at the top of the list.

Fixed assets or non-current assets cannot be converted to cash within a single year.
They are referred to as illiquid assets and have a longer lifespan when compared to
current assets. Fixed assets include tangible assets such as land, buildings, stocks,
machinery, bonds, and long-term investments.

Fixed assets may also be intangible, such as patents, goodwill, copyrights, trademarks.
A brand name is also another intangible asset that may be of great value. The value of
fixed assets is subject to appreciation and depreciation. Typically, fixed assets appear
at the bottom of the list of assets.

 Liabilities

Liabilities are items that the business owes to entities outside of the business. It is one
of the sources of capital to run the business. It is, therefore, an essential component of
the balance sheet. Liabilities may also be described as financial obligations a
company has to others. Often, they appear with the tag “payable.” Liabilities may also
be classified into two groups: long-term and short-term liabilities.

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Short-term liabilities, or current liabilities, are financial obligations that the business
must pay in less than a year. These include outstanding bills, unpaid dues, and taxes
payable. Unpaid salaries and wages may also be a form of short-term liability. Short-
term liabilities appear at the top of the list in the balance sheet.

Long-term liabilities are financial obligations that the business is not due to pay until
a period much greater than a year. These include bank debt, bondholder debt, and
other loans that are not due until over a year. They generally appear at the bottom of
the balance sheet.

 Equity

Equity is the value of ownership in a business. It also represents the amount that
business owners have invested into their business. Equity comprises both paid-in
funds and retained earnings. There are two kinds of equity: shareholders' equity and
owner's equity.

Owner's equity refers to the value of the investment that a sole proprietor puts into the
business. If the company has some investors, the investors' stake in the company is
known as shareholders' equity. Equity can be calculated as the total value of assets
minus the company's liabilities. Its value gives the net worth of the business. The
balance sheet equation gives a critical relationship between the three main
components of a balance sheet. It reads thus: Assets = Liabilities + Equity

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How to Create a Balance Sheet for Startup?

According to the balance sheet equation, a business's assets must equal the sum of its
liabilities and equity, which are the sources of its possessions. Arranging the
information for a balance sheet might seem difficult, especially for a startup. This
guide will help you to overcome these difficulties to create a balance sheet:

 Seek the guidance of an accountant

Preparing your first balance sheet, known as an opening day balance sheet, can seem
quite scary. If you have not prepared a balance sheet before, you may need the advice
of an expert to get started. This helps you avoid mistakes such as unreported assets or
undocumented liabilities, which may present an inaccurate picture of the business.

Additionally, an expert accountant is in a great position to give you financial advice

which can help grow the company. Nowadays, most startups even outsource their
financials to accountants. You may not be able to afford this as a new startup. Still,
with a few hundred dollars, you can gain enough from their expertise to boost the
financial security of your business.

 Choose a date to prepare the balance sheet

Most businesses prefer to prepare a balance sheet at the end of a fiscal year or, in
other cases, at the end of each quarter. For you, this date may be the end of a financial
period, at the beginning of the month, or any other date relevant to your business.
Most businesses may still be preparing the balance sheet a few weeks after the date
has passed.

Choosing the date to prepare the balance sheet allows you to collect documents,
receipts, and files relevant to that point in time. This date should appear at the top of
the balance sheet, typically part of the title.

 Gather the necessary data

After choosing the date for preparing the balance sheet, you'll need to collect all the
necessary data. Collect important receipts, sales invoices, and request relevant bank

28
statements. Determine how many loans you've taken as a business and how much is
due to you. Don't forget to estimate the value of intangible assets, such as patents and
trademarks. Having the necessary data handy makes it easier to create a balance sheet.

 Follow a standard format

A balance sheet follows a standard format in which assets, liabilities, and equity
occupy designated columns. Ensure that your balance sheet follows a standard format
so that it can be easily interpreted by investors and other firms interested in your
business

 Prepare the assets section

Under the Assets section, create a subheading for current assets first. Under this
subheading, list all your current assets such as cash, inventory, accounts payable, et
cetera. Be sure to list the items from most liquid to least liquid. Add up the subtotal of
current assets, and include it in your balance sheet as “Total Current Assets.”

Then, create a section for fixed assets. Here, you can include items like plants,
equipment, and long-term investments. Don't forget to add the intangible assets as
well. Find the subtotal of the fixed assets. Finally, include the total of all assets.

 Add the liabilities section

Under the Liabilities section, create a subheading for current liabilities. Under this
subheading, list all repayments due within a year, such as short-term debts, salaries
payable, and accounts payable within a year. Add up the subtotal and list it in your
balance sheet.

Also, create a subheading for long-term liabilities. In this section, list all repayments
due in more than a year, such as bank loans and mortgages. Include the subtotal in
your balance sheet. Finally, add up the total value of the liabilities, and include this in
the balance sheet.

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  Include an equity section

Under this section, include the amount invested in the business by shareholders and
the business owner. Be sure to add any retained earnings which went into the
business. Add these up as the total equity.

 Ensure the accounting equation is balanced

Finally, add up the total assets and the total liabilities and equity. Compare the two
values – they should tally. If they do, your balance sheet is complete. If they do not
tally, you may need to visit your data to check for omitted or miscategorized figures.
Ensure that these are taken care of, and work on the balance sheet again.

Here is a sample balance sheet from a fictional startup as a guide:

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 1.10 BENEFITS OF STARTUPS GOVERNMENT SCHEMES IN
INDIA

While each startup government scheme in India comes with its pros, there are some
benefits that they share. Here are the key benefits of government startup schemes in
India.

 Financial assistance
 Facilitate funding
 Provide collateral-free loans
 Offer mentorship
 Tax exemptions
 Networking opportunities
 Easy access to vital resources

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 1.11 IMPACT OF STARTUPS ON GDP/INDIAN ECONOMY

With more than 60,000 registered startups in India, the ecosystem has the potential to
contribute 4-5% to the country’s gross domestic product (GDP) over the next three to
five years. As per Economic Survey 2021-22, India has about 61,400 registered
startups, making it the world’s third-largest startup ecosystem in the world after the
US and China.
“This rise of startups has made India the third-largest startup ecosystem in the world
and has significantly impacted the Indian economy showcasing the ability to
contribute approximately 4-5% to the GDP of India. The report expects that 24,500
platforms would have registered in 2022, against an estimated 20,000 in 2021. It said
that registration of new startups is projected to grow at an annualized rate of 25%
during 2022-27.

DIRECT IMPACT OF STARTUPS IN THE INDIAN ECONOMY:

 More job vacancies

The serious problem that India is facing is unemployment jobs which are generated
are mostly from startups and not big enterprises. since the startups are free from
economic downturns and free from encumbrance they can manage more staffs

 Creative ideas create more works

A startup that creates a solution easily will have more demand so every startup will
try to be creative and with Everyone thinks differently so that the solutions found out
by different startups for the same problem are also different and the smartest and
creative ways are encouraged more and create more outsourcing to India

 Talent explosion of professionals and entrepreneurs for better ROI

India is filled with talented professionals but they don’t have the option to expose it.
Startups are in search of talented professionals which give them a platform to

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showcase their talent and they are always encouraged by multinational companies
which make them spend more money in India

 The new technology that cut off production cost

Technological advances will significantly improve operations and lower the cost of
doing business. Startups will search for new technology or create new technology in
India which simplifies the workload. When new technologies are accepted and
demand increases then many multinational companies will show interest in
investment in India Not only that, many Advancements in the computer industry,
coupled with advancements in telecommunications, have increased job opportunities
and strengthen economic growth in recent years.

 More competition which gives more confidence for work

Good healthy competition is always required for the improvement of the quality and
updating of a product or service. When competition increases the companies studies
the behavior of customers and launch new products which the users demand which
increases the demand for the product and increases the sales which directly benefits
the Indian economy.

 More outsourcing of service

Many multinational companies are now outsourcing their work to small companies
because they can concentrate on their core work. When these start-up companies
prove their talents, then many other companies also show interest in our country to
outsource their work so that India will become specialized in that field.

 More flow of foreign money

When more outsourcing comes to India more foreign money is circulated and
distributed in India which is good for the growth of the Indian economy

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  More demand in the market

When you prove the quality and value of money of product and service then the
demand increases which increases the revenue of startups which positively reflect the
Indian economy.

 Can decrease importing

When our startups can handle the need for a product or service then we can decrease
the importing of that product/service which decreases the flow of money to another
country and that money flows inside the Indian market which is good for the Indian
economy.

 Can increase exporting

When we have more startups then we can produce more products then we can start to
export to another country which increases the flow of foreign money to Indian
markets.

 New investments

Many multinational companies are closely watching the progress of Indian start us
and they are ready to invest money that creates wealth for a start-up which helps to
increase production which is good for the Indian economy.

Not only that if many startups support their businesses they always prefer to start their
company in India which increases job opportunity also.

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INDIRECT IMPACT OF STARTUPS IN THE INDIAN ECONOMY

 More flow of money into the Indian market

When start-up gives a job to people, They start to purchase products and service
which increase the flow of money and revenue of the government which boosts up the
Indian economy

 Changes in the face of the town or city

When many startups are in a particular location the demand for that location increases
because many people are trying to stay there to work and the infrastructure of that city
changes a lot

 More indirect jobs are very important and an Impact of startups in the Indian
economy

When infrastructure change many hotels, homestays, restaurants, bus operators will
starts which indirectly creates many job opportunities which increase the revenue of
the people of that city

 Increase of demand for related service

Many supporting services for star-ups starts such as registration company, marketing
company, human resource company.. which also create jobs which are good for our
economy

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  Increase in GDP

When income increase the people start to spend more money in the market which
directly influences the economy of a country

 Improves standard of living

When people have money they will start to buy quality products to improve the
quality of life so the demand for good quality products increases which is good or our
economy

 Good progress in education

People always like to give a good education for their children. when they get a good
income which they will demand a good educational institution and much foreign
institute show interest in India which creates more job as well as the flow of money
which gives progress in the society

 Progress in the health segment

People like to get good treatment but they are much expensive but when people have
the income to spend then they demand good treatments which help the hospital
management to import all modern equipment that makes India self-sustainable for
every treatment

 Progress in the transport segment

The need for transport increases as a city progresses which also gives job and more
facility in the transport segment startup India is a program that is aimed to support
start-ups to promote the talents of every entrepreneur.

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 1.12 STARTUP BUSINESS LOAN

A Startup business loan from a bank or a financial body in order to raise funds to start
a business of your own or expand your current business. The rate of interest charged
by the bank will depend on the loan amount availed by you and the repayment tenure.

Business Loan Details:

Interest Rate Up to 21% p.a.
Loan Amount Up to Rs.75 lakh
Loan Tenure Up to 5 years
Processing Fee Up to 6.5% of the loan amount + GST

Startup Business Loans By Banks:

Name of the lender Interest Rate
HDFC Bank 15.75% p.a. onwards
TATA Capital 19% onwards
Kotak Mahindra 17% onwards
Fullerton India 17% p.a. to 21% p.a.

HDFC Bank

 Loans of up to Rs.40 lakh. Rs.50 lakh in select location.

 A processing fee of 0.99% of the loan amount will be charged by the bank.
 Repayment tenures of up to 4 years.

TATA Capital

 Repayment tenures of up to 3 years

 Loans ranging between Rs.50,000 and Rs.75 lakh.
 Processing fee of 2.50% of the loan amount plus GST will be charged by the lender

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 Kotak Mahindra

 Loans of up to Rs.75 lakh.

 Interest rate charged by the bank will depend on factors such as the loan amount
availed by you, the repayment tenure, etc.
 2% of the loan amount plus GST will be charged as the processing fee.
 Repayment tenures of up to 5 years

Fullerton India

 Loans of up to Rs.50 lakh.

 Repayment tenures of up to 5 years.
 The processing fee charged can go up to 6.5% of the loan amount plus GST.
Startup business loans are of two types -

 Line of Credit
 Equipment Financing.

Line of Credit

A startup business loan in the form of a line of credit works in a similar manner to
a credit card. However, the card is tied to the individual’s business instead of their
personal credit. One of the best benefits of a small business line of credit is that
customers will have no obligation to pay interest on the borrowed sum for the first
nine to 15 months, thereby making it easier to cover expenses whilst getting their
business to a good start.

Equipment Financing

In this type of loan for start-ups, the equipment that is bought when starting the
business is pledged as collateral, thus enabling the lender to charge a relatively low
rate of interest with a slightly higher risk. The customer is expected to repay the
amount used to purchase the equipment as revenues are generated from their business.
Similar to a line of credit, applicants are expected to have a high credit score (680+),
and the documents required to avail equipment financing include a vendor quote, a
detailed credit report, and a statement showing the manner in which the customer

38
 intends to utilize the equipment. The main benefit of equipment financing is that the
depreciation of the equipment can be used by the customer as a tax benefit for many
years.

Things to keep in mind when looking to apply for a Startup Business Loan:

Startups looking to get such a loan should ensure the following:

 Make a crisp and detailed business plan.

 State clearly how you intend to use the loan amount in your business plan.
 Summaries the objectives and goals of the business along with a chart that will
highlight the potential returns and growth of the venture.
 Give a clear approximation of the funds.

Eligibility Criteria for Startup Business Loan:

The eligibility criteria to avail startup business loans may vary from lender to lender
but the generic ones have been listed below:

 Age of the applicant should not be less than 21 years while the maximum age
should not exceed 65 years.
 The applicant must be a citizen of India.
 Applicants should have a business plan.

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 Documents Required to Avail Startup Business Loan:

Photographs 2 copies (passport-size)

Proof of Identity PAN Card, Passport, Aadhaar Card,
Voter’s ID, Driving License
Address Proof Driving License, Aadhaar Card, Postpaid
Phone Bill, Voter’s ID,Passport
Age Proof Passport, PAN Card
Bank Statements Last six months
Proof of Income Income Tax Returns, Salary Slips,
Signature Proof Bank verified signature, PAN Card,
Passport
IFSC Code Proof Cancelled/scanned cheque, copy of
passbook’s front page of the same bank
account

How to Apply for Startup Business Loan?

Some of the ways through which you can apply for a Startup Business Loan are:

 Visit the official website of the lender from you wish to avail the loan and apply for
it online by filling up the form and submitting the required documents.
 Visit the nearest lender’s branch and submit the loan application form and
documents.
 You can also call the lender’s customer care and request for assistance for applying
for a startup loan.

Features and Benefits of Startup Business Loan:

 No collateral or security needs to be provided to avail a startup business loan.

 Startup business loans come with easy and flexible repayment tenures.
 The documentation required for availing a startup business loan is minimal.
 The funds are swiftly disbursed to the applicant’s bank account.
 The interest rate charged by the lender will depend completely on the applicant’s
credit history.

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 1.13 STATES IN INDIA HAS MORE NUMBERS OF STARTUPS

With 15,571 government-recognized startups, Maharashtra takes the top spot, whereas
Karnataka, Delhi, Uttar Pradesh, and Gujarat follow with 9,904; 9,588; 7,719; and
5,877, respectively. Data reveals that at least one startup exists in every state and
union territory. Almost 58 per cent of all government-recognized startups in the
country are concentrated in just five states - Maharashtra, Karnataka, Delhi, Gujarat,
and Uttar Pradesh, per a Lok Sabha response from December 7, 2022. Additionally,
the data showed that every Indian state and union territory has at least one startup,
however, Maharashtra topped the list with most startups. Concentration Of Startups
As of November 30, 2022, the government has 84,012 startups recognized under the
Department for Promotion of Industry and Internal Trade (DPIIT). Of these, almost
60 per cent startups are based in states of Maharashtra, Karnataka, Delhi, Gujarat, and
Uttar Pradesh. With 15,571 government-recognized startups, Maharashtra takes the
top spot, whereas states like Karnataka, Delhi, Uttar Pradesh, and Gujarat follow with
9904;9588;7719;5877.

Bangalore has been known as the silicon city for years now, as it is the hub for IT
Companies in the country. Currently, the city is called the Startup capital of India.
With Prime Minister Narendra Modi emphasizing on his “Make in India” project, the
city has grown a few folds by housing 7000+ Startups in the country.

Certainly! Maharashtra is considered the leading startup hub in India due to its well-
established ecosystem of incubators, investors, and mentorship programs. The state
government has also taken several initiatives to encourage entrepreneurship, such as
the Startup Maharashtra program, which provides funding, mentorship, and
networking opportunities to startups.

Karnataka, with its capital city Bangalore, is known as the "Silicon Valley of India"
and is home to some of the most successful startups in the country. The state
government has set up several incubation centers and startup funds to support new
ventures in the technology sector.

41
Delhi, being the capital city of India, has a diverse and well-connected business
environment, with a high concentration of government institutions, industries, and
investors. The Delhi government has launched several schemes to promote innovation
and entrepreneurship in the region, such as the Delhi Startup Fund and the
Entrepreneurship Mindset Curriculum.

Uttar Pradesh, with its large population and abundant resources, has immense
potential for startups. The state government has launched several initiatives, such as
the UP Startup Policy, to provide funding, infrastructure, and mentorship support to
startups in the region.

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 1.14 SHARK TANK INDIA

Indian start-ups have raised Rs 17.58 crore from the judges of the popular series
Shark Tank India, across season two till now, as per estimates shared by the business
reality television show. Namita Thapar, Executive Director of Emcure
Pharmaceuticals, has made the maximum investment in terms of amount, followed by
Aman Gupta (co-founder and CMO of boAt), Peyush Bansal (CEO of Lenskart),
Vineeta Singh (CEO of Sugar) and Anupam Mittal (Founder and CEO of People
Group).
Thapar has invested Rs 5.03 crore. Gupta, Bansal, Singh and Mittal have infused
capital worth Rs 3.55 crore, Rs 3.13 crore, Rs 2.95 crore, and Rs 2.92 crore,
respectively. These numbers were shared by Shark Tank India on its Twitter handle.
Some of the start-ups which raised funding include hyperlocal OTT platform STAGE,
clothing brand Girgit Store, electric vehicle start-up Gear Head Motors, snack
company Patil Kaki, fire extinguishing ball manufacturer Brandsdaddy, and beauty
appliance firm Winston India. However, some start-ups like shoe brand, Flatheads,
DNA jewellery company, Magic of Memories, failed to get funding but were
applauded by the sharks for being resilient, unique, and more.
The last season, which aired in 2021, saw 67 out 198 pitches getting funded. In all,
start-ups and their founders raised Rs 42 crore. In season one as well, Thapar invested
the most among all sharks. She invested Rs 10 crore across 24 deals. In terms of
volumes, Gupta invested in the most number of start-ups. He closed about 30 deals.
His total invest was rupees 6.7 crore in Shark Tank India Show.
Second highest investment came from Bansal who invested Rs 8.2 crore across 27
deals.
Apart from the sharks, the Indian start-up ecosystem also boasts of numerous angel
investors who back them. CRED founder, Kunal Shah, tops the list with more than
200 investments done across start-ups such as Razorpay, Unacademy, Slice, Mensa,
Spinny, and more, according to a report by A Junior VC, a start-up content platform.

Others who follow the suit include Kunal Bahl, co-founder of Snapdeal. Bahl is the
co-founder and CEO of Snapdeal and has invested in 66 start-ups such as Rapid, The
start-up ecosystem in India is the third largest in the world after the US and China. As
of September 1, 2022, India houses 77,473 start-ups.

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9 Startups that achieved tremendous growth after Shark Tank India Season 1

1. Skippi Ice Pops

Skippi Ice Pops was the first startup to get an all-sharks deal on the show. The
ice popsicle brand got a deal for Rs. 1 Cr for 15 percent equity. Before
appearing on the show, the company used to register sales of Rs 4-5 Lakhs per
month and only had regional distribution. But now, the numbers have
skyrocketed. Their monthly sales stand at Rs 70 Lakhs. From 150 visitors per
day to 8,000 visitors per day, their website has seen immense growth in traffic.
They have also started international exports in Uganda, Nepal, Kuwait, Hong
Kong, and Dubai.

2. Tagz Food
With an innovative and healthy concept of snacking for the GenZ, Tagz Foods
has successfully made a place in the hearts of their customers across India and
even abroad. The popped chips brand got a deal for Rs. 70 Lakhs for 2.75
percent equity. After appearing on the show, the company has witnessed a 3X
growth. From being a popped chips brand, they have extended to other
products like dips and chocolate cigars. They now have distribution in 20
Indian cities and Dubai, Kuwait, and Australia, which was restricted to 6 cities
before the show. They have also started six manufacturing units now.

3. The Sass Bar

Artisanal luxury soapery The Sass Bar has also seen impressive growth in its
business post-Shark Tank India Season 1. From monthly sales of Rs 6 Lakhs,
they have gone to Rs 10 to 20 Lakhs per month. The company sealed a deal
for Rs 50 Lakhs for 35 percent on the show. They are now taking bath and
body products a notch higher. They have also launched more SKUs after the
show.

4. Auli Lifestyle
With Shark Namita Thapar, Auli Lifestyle’s cruelty-free, ayurvedic skincare
products are touching new heights. Helmed by Aishwarya Biswas, the
company has started retail distribution after appearing on Shark Tank India.

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 From a monthly sale of Rs 10 to 12 Lakhs, they have moved to Rs 30 to 37
Lakhs per month. Their beauty and skincare products are now available in all
Mumuso stores. The company has also launched a new set of affordable rage.
International exports and national distribution are in the works.

5. Brain Wired
With a life-saving innovation Brain Wired proved to the world that good deeds
go a long way, and etched their names in the minds of everyone. One of the
most innovative tech products from Shark Tank India, the company is among
the top 75 success stories of agriculture in India. The tech company got a deal
for Rs 60 Lakhs for 10 percent. Before coming to the tank, their monthly sales
stood at Rs 1 to 2 Lakhs. This has now skyrocketed to Rs 35 Lakhs per month.
They are also starting international export.

6. Get A Whey
The mother-son duo of Jimmy and Jash Shah made an instant connection with
the investors with their excellent presentation skills, articulated responses, and
incredible stories. Get-A-Whey is a health-driven ice cream brand catering to
millennials. Their ice creams are high in protein, come with zero added sugar,
and are low in fat as well as low in calories. They sealed a deal for Rs 1 Cr for
15 percent equity. Before appearing on the show, their monthly sales were Rs
20 Lakhs, which are now between Rs 80 Lakhs to Rs 1 Cr. From a three-city
distribution network, they have reached 19 cities.

7. Namhya Foods
The all-natural superfood brand Namhya Foods proved that healthy and
nutritious is the new tasty. The company aims to promote the old Indian way
of eating with the goodness of Indian herbs. From a monthly sales of Rs 10
Lakhs, they have gone up to Rs 40 Lakhs. The company closed a deal for Rs
50 Lakhs for 10 percent and received Rs 50 Lakhs as debt. They are now
launching distribution in UAE, UK, US, and Canada. They are also launching
a new tea for kidney and gastric problems.

45
8. Nomad Food Project

What began as a research project in college is now becoming a successful food

company. Nomad Food Project aims to satiate your hunger pangs with their
delicious bacon thechas, spreads, and jams. Before the show, their monthly
sales were Rs 5 Lakhs, which has now gone up to Rs 19 Lakhs. From
distribution within India, they have started international shipping. The
company sealed a deal for Rs 40 Lakh for 20 percent. They are also increasing
their team strength and getting celebs to endorse their products. Their
manufacturing game has also gone up.

9. Hammer Lifestyle

Smart and innovative thinking can take you places. And Hammer Lifestyle is
proof. The smart gadget brand has recorded a brilliant growth in the market
after bagging an investment at Shark Tank India. Before the show, Hammer’s
monthly sales were Rs 70 Lakhs, while their website had 30k visitors. Now,
their monthly sales are Rs 2 Cr. Their website visitors have increased to
400k. The company has also started offline distribution. They have also
expanded their product mix from 14 to 21 SKUs, upgraded tech, and
increased their team strength.

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 1.15 CASE STUDY-1

SWIGGY

Swiggy is the most valuable and largest online delivery platform in India. Swiggy was
founded in 2014 by its two founders Sriharsha Majety and Nandan Reddy who were
based out of Bangalore. In early 2019, Swiggy diversified into deliveries of groceries
and general products, under the brand name Swiggy Stores.

Swiggy also launched its own pick-up and drop service in September of 2019 called
Swiggy Go. This service can be used to pick up and drop off laundry, deliver
documents or any other parcels to customers – business or retail.

In 2013, Sriharsha Majety and Nandan Reddy created an e-commerce website called
"Bundl" to promote courier service and ship goods within India. However, they
moved from Bundl into the food delivery market in no time. Start-ups like Food
panda, TinyOwl and Ola Cafe had come up but were struggling. Swiggy, with the
help of its parent company Bundl Technologies, built out an elaborate delivery
network and grew immensely.

Funding History and Valuation Swiggy recently managed to raise $113 million in a
led by its existing Naspers which is a South African internet giant. This new round of
funding increased the company's funding to nearly $3.6 billion. The investment is a
part of a $150 million funding round which included its existing investors, Meituan
and Hadley Harbour Master Investments. Naspers, which is its largest investor, now
owns a 40.6% stake while Meituan holds 6.35% in the company.

The investment might have stemmed from the recent acquisition of UberEats India by
Zomato, one of its biggest rivals, Zomato. This redirected all of UberEats' users to
Zomato. A few weeks prior to the deal, Zomato had raised $150 million from an
existing investor Ant Financial, when it was valued at $3 billion. Prior to this funding
round, last investment in Swiggy's was done in December 2018. It was a $1 billion
round led by Naspers, Other investors included Hillhouse Capital, Wellington
Management and Tencent. However, the valuation has been largely stagnant even
after this funding.

47
In 2015, the company received a $2 million investment from Accel and SAIF
Partners, along with an additional investment from Norwest Venture Partners. In the
following year, Swiggy raised $15 million from new and existing investors, including
Bessemer Venture Partners and Harmony Partners.

Swiggy's management published a report which has forecast net profit of Rs 858 crore
on revenue of Rs 11,021 crore in 2022. However, for the year 2019-2020, Swiggy has
forecasted revenue of Rs 1,329 crore on a net loss of Rs 1,067 crore. Swiggy requires
larger investments to build and grow a consumer-facing logistics network in the
nation and to start making profit with higher revenue.

Business Structure:

Swiggy depends on its local restaurants and hence has an on-demand food delivery
business model. These local restaurant partners opt to deliver to customers that come
from Swiggy's platform. It also arranges and coordinate with its delivery partners
which deliver the food as per demand. Their responsibility to pick up the order from
the partner restaurant and deliver it to the end consumer. This is a carefully crafted
business model which relies on a dual partnership model.

Swiggy's role is to provide a platform so that its users can order from a wide range
partner restaurant in their locality and have the delivery personnel who pick up the
orders from the partner restaurants and deliver them. Swiggy bridges the gap by
providing a complete food ordering and delivery solution which is beneficial for both
the parties. Swiggy has integrated the Google Maps API like other on-demand
delivery applications. This gives the customers the realtime information regarding the
location of their order and the time remaining for their order to get delivered.

Revenue Mode:

l Swiggy's business model has made Swiggy a pioneer in the online food delivery
industry in India however, they have started earning revenues from other avenues as
well since they have set themselves up strongly.

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The following are the different revenue sources for Swiggy:

Commissions

Swiggy generally charges a commission of 15% – 25% on every order bill amount
received by its partner restaurant. This includes the GST charged on the bill, over and
above the menu price. If the restraint is exclusively available on Swiggy, specific
benefits are given to those restaurants such as discounts on the commission of around
2% – 3% and also higher visibility and noticeability to the restaurant. The band of the
commission charged depends on multiple factors like the popularity of the restraint,
number of orders received, its location, whether its exclusively available or not on
Swiggy, percentage charged by the competitors, and many others.

Delivery charges

Since Swiggy does not have a minimum order requirement for its orders, it usually
gets orders which are less than Rs 100 which increases the cost of logistics. Once
Swiggy established itself in the market, it started charging delivery charges to low
order amounts (dependent on the city you are in). Delivery charges for orders less
than Rs 250 are often as low as Rs 20. Swiggy also charges a surge in delivery
charges when there is a high demand, special occasions, rains, and midnight delivery
in a few areas.

Swiggy Super

Swiggy has released a form of membership program called Swiggy Super for its
customers. It enables the customers to have unlimited free delivery on orders above
Rs 99 and not being charged more in a period of surge pricing. It was launched in two
available options that are - a one-month membership costing Rs 149 and a 3-month
membership for Rs 349. To promote this, Swiggy has offered them at an introductory
price of Rs 49 and Rs 129 respectively as a sale. This amount has contributed to the
revenue of the company along with the repeat orders Swiggy believes it has been
receiving due to this program.

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Advertising

Swiggy has also started earning revenue through advertising via two models – priority
listing of restaurants and banner promotions. It recently started with Banner
promotions following the lead of its rivals Zomato and FoodPanda. Restaurants are
promoted and displayed selectively in their app and on their website according to
various regions. Various regions on the page shown vary in their rates based on the
priority that the restaurant is to get via the promotion. Swiggy’s home page shows the
user the list of restaurants available to the them. It has used this opportunity to get
revenue by charging a premium to show a particular restaurant priority in the said list.
Higher the restaurant is in the list, higher is the premium the restaurant is charged.

Restaurants

Swiggy has also invested its own restaurants which are dominantly displayed on the
platform with a great amount of visibility and priority. This was initially done in
Bangalore and then eventually adapted in cities such as Mumbai as well as
Hyderabad.

Swiggy Access

Swiggy launched Swiggy Access in Bangalore in the year 2019, which quickly
expanded to 30 restaurants, to cities like Delhi, Mumbai, Hyderabad, and Kolkata. It
is a central kitchen base-like facility which is a house for kitchens of different
restaurants. This cloud kitchen model helps the restaurants to set up kitchens in
locations even where they are not officially present. Swiggy is expecting this model to
help them penetrate into tier 2 and tier 3 cities of the country. In the markets it is
currently present it contributes to 8% – 25% order volumes

Affiliate Income

Besides the core business practices Swiggy also earns revenue in the form of affiliate
income by referring credit cards to its users. The company is partner with various
banks and financial institutions such as American Express, ICICI bank, HSBC,
Citibank, etc. to sell their credit cards to the customers and promote them. Customers
see these promotions when they are on the tracking screen of their orders.

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 1.16 CASE STUDY-2

Paytm

Paytm short for “Payment through Mobile” is an e-commerce platform that enables its
members to make digital payments, maintain a balance (e-wallet) and provides other
services such as banking services, recharge, bill payments, bookings/reservations, etc.

It is based in Noida (Uttar Pradesh) and was founded in 2010 by Vijay Shekhar
Sharma who is also the current CEO of the unicorn start-up. One97 Communications
Ltd. is the parent company of Paytm. It delivers commerce services and mobile
content to customers through various telecom applications cloud platforms. His aim in
the beginning was to start a recharge platform, but now Paytm has transformed into a
virtual marketplace and a e-bank model. It has catered its services to over 100 million
users online.

Funding History and Valuation Paytm knows the art of fundraising a little better than
any other Indian unicorn. Despite losing momentum in payments and commerce
businesses, Vijay Shekhar Sharma comfortably in November raised a whopping $1
billion in Series G round at a towering valuation of $16 billion. This was over a 45%
jump from its $10.5 billion valuation in its valuation report as of September 2019.
This has enabled Paytm to be India’s largest unicorn, now valued at $16 billion. This
was the highest amount of funding raised by any start-up in the country in the year
2018-19. Paytm has recently raised $1 billion (approximately ₹7,173 crore) in the
latest funding round. This was majorly done by US-based AMC named T Rowe Price.
The amount of investment by Discovery Capital and D1 Capital including T Rowe’s
investment was almost $400 million. It is existing investors such as Ant Financial and
SoftBank Vision Fund put in $400 million and $200 million, respectively. In the
previous round, Paytm had gained $300 million by Berkshire Hathaway in 2018. The
company’s valuation was done at $10-11 billion then. The company has recorded a
rise of 46.6%, comparing to the valuation of then to now being at $16 billion. Paytm
is planning to go public by launching its IPO in 2022. As per the company, over 7
million merchants across India use this QR code to accept payments directly into their
bank account.

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Business Structure

Paytm is India’s largest payment, commerce, and e-wallet enterprise. It was initially
launched as an online mobile recharge platform but transformed its business model to
a virtual and marketplace bank model over the years. It is a pioneer of the cashback
business model.

The business structure of the company can be explained by describing the

various facilities that it offers:

Paytm Marketplace (Paytm Mall)

Paytm is the first platform who took the step of evolving as a mobile-only e-
marketplace in the country. Sellers on this platform can make high profits and it is one
of the most beneficial marketplaces for sellers. It has a large user base with over 120
million buyers and 2 million daily transactions. It is imperitive to note that most of its
orders are prepaid. Revenue for Swiggy, however, is created as commissions and fees
from the sellers. This fee differs for different category of products.

Recharge Services

Paytm started its business mainly by providing a platform for mobile recharges and
bill payments. These have now been transformed and grown into online recharge
services for TV channels subscriptions, mobile subscriptions, and even metro cards.
Just like all other recharge services providers, it charges commissions from these
operators which lead to a huge source of revenue for Paytm.

Bill Payment

This facility is not just limited to recharge services, customers can also pay bills of
any kind such as their electricity, telephone, water, mobile, broadband, gas bills on
Paytm. Paytm also accepts educational and tutoring fees as it has partnered with
several educational institutions across the nation. It allows its customers to pay
insurance installments to various financial organizations. The revenue generated from
these services is also earned by charging commissions from their providers.

52
Payment Solutions Paytm offers smart payment solutions for the online businesses
registered with it. This allows them to enable online payments via Paytm. If a
business wishes to enable it, it need not pay any setup charges and can do so for free.
It also does not have to pay any maintenance charges. However, Paytm charges a
1.99% commission on each transaction.

Paytm Wallet

Paytm wallet is a semi-closed wallet which can be used to store currency in digitally.
This amount can also be used to buy goods and services (including financial services)
by using the application. These are available at identified merchant locations or
establishments (like petrol pumps, a supermarket, your barber’s shop, movie hall, etc.)
that have registered themselves with the company accept this payment form. Paytm
Wallet, however, does not work like a bank account and it does not and cannot permit
cash withdrawal by its users.

A Paytm wallet is so well established and works in a way that it can be used to pay for
almost everything. Amounts of money are easily transferrable between the Paytm
wallets of users with the help of their phones. The amount deposited by its users in
Paytm wallet is then deposited in an Escrow Account with a partner bank by Paytm.
This escrow account deposit earns certain interest for Paytm, which is decided as per
the contract between Paytm and the partner bank.

Digital Gold

In India, Gold is considered as the safest and a go-to investment and Paytm has full
plans to capitalize on this. The company is planning to introduce trade of gold
digitally exclusively on Paytm. The company will enable its users not only buy gold
digitally, store it in the form but also use this to buy and avail services on Paytm.
Customers can get the gold delivered to their doorstep as well by paying a minimal
delivery charge. The users of this will have a Gold Bank account on Paytm. For this,
the company has partnered with gold refiner MMTC-PAMP to launch ‘Digital Gold’.

53
Paytm Bank

This is a type of a digital bank which can accept deposits and give out interests on the
deposits. However, they are not permitted to offer loans to its customers. Users can
access this facility as well by using their Smartphone’s. Paytm has also issued debit
cards that have QR codes that can be scanned at various points. The bank offers a 4%
p.a. interest on saving bank accounts and as well as an overdraft facility with the
current accounts. There are no restrictions on any transaction except that balances
over ₹1 lakh are moved to a FD (fixed deposit) with a partner bank (this provides 7%
interest p.a.).

Cross-Selling

Paytm is a partner with various banks and financial institutions which help them in to
selling their products and services such as insurance, investments, loans etc. along
with its own. The revenue rolls in a form of commissions or other forms as per the
contract between them.

Interest Arbitrage Paytm bank also makes money by depositing the money with some
other bank and/or government deposits. These provide interest rates higher than that is
provided by Paytm bank. The difference helps them earn profits on arbitrage.

Revenue Model

The company earns revenue in two ways:

1. Paytm earns commissions from the customer transactions through their usage of its
platform.

2. Escrow accounts are a major source of revenue for Paytm. Since it does not have
an underlying capital, it is not able to offer its users any interest. The deposits in these
accounts generate interest for the company which is a major source of revenue for
them.

54
Cost Structure of Paytm

Paytm serves many millions of customers which forces it to be, for its own survival,
cost driven. The expenses incurred by it are majorly related to customer acquisition
and its platform. The money used up is generally higher than the revenue it makes
from its initial purchases. Most of its budget, however, is used in increasing the
security on its application and avoiding the risk of fraudulent activities especially
since it has over 65 million customers in its platform.

Another cost it has to incur comes from operating a prepaid wallet. Banks and other
payment gateways charge a fee of around 1-3% of the amount deposited for using
their services. This fee cannot be charged to the customers as it will make them
choose alternatives like UPI, IMPS, etc

Revenue, Profit and Losses

Paytm’s parent One97 Communications posted Rs 3,959.6 crore in net losses for the
fiscal year ending March 31, 2019 against just Rs 1,490 crore for the same period
while the revenue for the year 2018-19 was Rs 3319 crores as against Rs 3229 crores
for the year 2017-18. These losses occurred due to mainly due to a high increase in
expenses especially in advertising and promotion (Rs. 2193 crores in 2017). This was
due since demonetization was done in 2016 which opened opportunities for market
capitalization for the company. One97 Communications Ltd (OCL), the parent
company of Paytm, had posted a loss of ₹3,959.6 crore in 2018-19 as against ₹1,490
crore a year ago, and its standalone revenue rose marginally to ₹3,319 crore from
₹3,229 crore in 2017-18, as per reports.

Marketing Strategy

Paytm is completely ready with its new marketing strategy where it has planned to
zoom in more on its digital currency prospects. This implies that most of its core
marketing and advertising strategies enforce customers to use of Paytm Wallet. This
has been an extremely smart and bold move since now it will get the first mover
advantage over e-Wallets. Also, through its extensive distribution strategy (which is
considerably better than its competitors such as Ola Money, Free charge, etc.), it will be

55
able to increase its brand preference and retain its customers. This will by and by help
it to carry out its future the way it plans to.

Future Expectations

Even though digital payments in the industry are still expected to grow to $1 trillion
by 2023, Credit Suisse report, digital wallets, where Paytm had initially established a
monopoly, may soon become obsolete. This is happening as recently growth in digital
payments is now being led by the Unified Payments Interface (UPI) platform. There
are various start-ups by large companies from Reliance Industries and Facebook to
small start-ups such as Razorpay are launching UPI-based products. The competition
for Paytm is on rise. Two of these new platforms are a major threat to Paytm. These
are PhonePe which is owned by Walmart and Google Pay. These are now the
preferred mode of digital payments and have also recently recorded more transactions
on UPI than Paytm. These efforts made by UP based apps have already started to take
a toll on Paytm’s revenues and profits. At the same time, in order to match with its
rivals, Paytm had to spend hundreds of crores of rupees on cashbacks as well. In the
year ending 31st March 2019, it reported a net loss distended to ₹4,217.2 crore, in
comparison with ₹1,604.3 crore in the previous financial year. These are extremely
bad numbers for any company especially for a company that is quickly losing market
share and customers.

With the development of UPI, usage of wallets is expected to shut down in the next
few years. This has major implications for Paytm, and it needs to take steps to beat
this competition or adapt to this facility as well.

Paytm’s corporate governance practices also attract scrutiny. Its CEO, who is also the
founder, Vijay Shekhar Sharma is known to have unrestrained power and control.
This type of controversial management styles of their leaders are often questioned by
its investors if the business is not doing well and growing according to expectations.
Such management practices have also contributed to the dramatic change in the fates
of companies like Uber and WeWork.

Despite its efforts, Paytm is still seen as a payments app. It has struggled to expand
its new businesses, but it faces fierce competition from new internet start-ups as well
as established financial services firms.

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 CHAPTER-2

2.1 METHODOLOGY
Research comprises defining and redefining problems Explaining the purpose of the
study formulating hypothesis or suggested solutions; collecting, organizing and
evaluating data; making deductions and reaching conclusions; and at last, carefully
testing the conclusions to determine whether they fit the formulating

Hypothecs is Being exploratory research, the researcher is planned to make use of

both types of data i.e. (1) Primary data and (2) Secondary data with the vision to
construct the findings more comprehensive and precise.

A primary data is source is an original data source, that is, one in which the data are
collected firsthand for this research.

For STUDY OF STARTUPS IN INDIA primary data is collected from one on one
questionnaire distribution through the Google form and conducting interview with the
startup entrepreneur which is a QUALITATIVE RESEARCH METHOD of collecting
data. It is a semi-structure interview between interviewer and interviewee.

A Secondary data can provide a baseline for primary research to compare the
collected primary data results to and it can also be helpful in research design. A clear
benefit for study is secondary data is that much of the background work needed has
already been carried out, such as literature reviews or case studies. In this study
Secondary data generally have a pre-established degree of validity and reliability
which need not be re-examined by the who is re-using such data.

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 2.2 SAMPLING AND DATA COLLECTION
The collection of data is placed into an order. Percentages of respondents answered
similarly are calculated and placed in a table. Then this is interpreted. This involved
drawing conclusion from the gathered data Interpretation changes the new
information immerging from the analysis into information that is pertinent or relevant
to the study.

Population The Study involves quite a good number of responses involved and
relevant to the subject in and inside the country.

Data Collection & Contemplated tools Facts and figures have been obtained from
primary sources in Google form and secondary sources as newspapers, internet,
magazine and books.

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 2.3OBJECTIVES OF STUDY

The objectives of studying startups in India from a finance point of view may include:

 Understanding the funding landscape: To study the different sources of

funding available to startups in India, including angel investors, venture
capitalists, and government schemes. This can help in identifying the most
appropriate sources of funding for a particular startup and understanding the
different terms and conditions associated with each.
 Evaluating the financial performance: To analyze the financial statements of
startups and evaluate their financial performance. This can include assessing
the revenue growth, profitability, cash flow, and return on investment of the
startup.
 Identifying financial challenges: To identify the financial challenges faced by
startups in India and understand the reasons behind them. This can include
challenges related to funding, taxation, compliance, and regulatory issues.
 Studying valuation methodologies: To study the different valuation
methodologies used for startups in India and understand the factors that impact
the valuation. This can help in making informed decisions related to
investment, acquisition, or divestment of startups.
 Benchmarking with peers: To benchmark the financial performance of startups
with their peers in the industry and identify areas of improvement. This can
help in setting realistic financial targets and developing strategies to achieve
them.
 Developing financial strategies: To develop financial strategies for startups
that align with their business objectives and risk appetite. This can include
strategies related to funding, cash flow management, tax planning, and risk
management.

Overall, studying startups in India from a finance point of view can provide valuable
insights into the financial aspects of running a startup and help in making informed
decisions related to funding, valuation, and financial management.

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 2.4 SIGNIFICANCE OF STUDY

The study of startups in India is significant from both financial and economic points
of view. India has emerged as one of the fastest-growing startup ecosystems in the
world in recent years. Here are some reasons why the study of startups in India is
important:

 Job Creation: Startups are a significant contributor to job creation in India.

According to a report by NASSCOM, the Indian startup ecosystem created
more than 1.6 million direct and indirect jobs in 2020. This has a significant
impact on the economy, as it helps to reduce unemployment and boost
economic growth.
 Innovation: Startups are at the forefront of innovation in India. They are
driving the development of new technologies and business models that have
the potential to disrupt traditional industries and create new ones. This is
crucial for the long-term growth of the economy, as it helps to create new
markets and increase productivity.
 Investment: Startups are attracting significant investment from both domestic
and international investors. This has a positive impact on the economy, as it
helps to create a vibrant ecosystem for entrepreneurship and innovation. It also
helps to attract talent and resources to the country, which can further boost
economic growth.
 Economic Growth: Startups are contributing to the overall growth of the
Indian economy. They are creating new industries, generating new revenue
streams, and contributing to the development of a skilled workforce. This has
a ripple effect on other sectors of the economy, as it leads to increased demand
for goods and services, and stimulates growth in other industries.

In conclusion, the study of startups in India is significant from both financial and
economic points of view. It has the potential to create jobs, drive innovation, attract
investment, and contribute to overall economic growth.

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 2.5 SCOPE OF STUDY

The scope of studying startups in India is vast and varied, as India has emerged as one
of the world's leading startup ecosystems in recent years. Some of the areas that
researchers and students can explore in the context of Indian startups include:

 Startup ecosystem: India’s startup ecosystem includes a network of

entrepreneurs, investors, incubators, accelerators, and government initiatives.
Researchers can study the structure and dynamics of this ecosystem, the role
of different stakeholders, and the policies and programs that support startups.
 Sectoral analysis: Indian startups operate in diverse sectors such as e-
commerce, healthcare, and more. Researchers can analyze the trends,
challenges, and opportunities in different sectors and how startups are
leveraging technology to disrupt traditional industries.
 Funding and investment: Indian startups have attracted significant funding
from both domestic and international investors. Researchers can study the
funding landscape, the role of venture capital, angel investors, and other
sources of capital, and the impact of funding on startup growth and success.
 Entrepreneurship and innovation: Indian startups are driving innovation in
various fields, and researchers can explore the factors that motivate
entrepreneurs to start a business, the role of innovation in startup success, and
the challenges faced by entrepreneurs in India.
 Social impact: Many Indian startups are focused on solving social and
environmental problems. Researchers can analyze the social impact of startups
and their contribution to sustainable development.
 Internationalization: Indian startups are expanding globally, and researchers
can study the strategies adopted by startups to enter foreign markets, the
challenges faced in internationalization, and the impact of global expansion on
startup growth and success.

Overall, the study of startups in India offers a rich and diverse research agenda for
students, scholars, and practitioners interested in entrepreneurship, innovation, and
economic development.

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 2.6 LIMITATIONS OF STUDY

There are several limitations to the study of startups in India, some of which include:

 Lack of reliable data: One of the major limitations of studying startups in India
is the lack of reliable data. There is often limited information available on
startups in India, making it difficult to study their performance and impact
accurately.
 Cultural differences: India is a diverse country with various cultural
differences that can significantly impact the success of startups. Therefore,
studies that fail to consider these cultural differences may not be entirely
accurate.
 Limited access to funding: While India is a rapidly growing economy, access
to funding remains limited for most startups. This lack of funding can impact
the success of startups and make it challenging to study their potential fully.
 Regulatory barriers: India has complex regulatory structures, which can make
it difficult for startups to navigate the legal framework. These regulatory
barriers can impact the growth and development of startups, and studying
them requires a deep understanding of the legal system.
 Limited infrastructure: In some regions of India, there is limited access to
basic infrastructure like electricity, internet connectivity, and transportation.
This can significantly impact the success of startups and make it difficult to
study their potential.
 Limited awareness and adoption of technology: Despite rapid technological
advancements in India, there is still limited awareness and adoption of
technology in some parts of the country. This can limit the success of startups
that rely on technology and make it challenging to study their potential impact.

Overall, these limitations highlight the need for a nuanced and comprehensive
approach to studying startups in India. It requires understanding the country's cultural,
economic, and regulatory landscape and considering how these factors impact the
success of startups.

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 CHAPTER 3

LITERATURE REVIEW

The trend in Startups Innovation

Ayadi-Frikha. Year-2014

According to Ayadi-Frikha (2014), innovation is a key ingredient that accelerates the

growth and profitability of most startups in India.Innovation in most Indians startups
depends on the size, availability of ideas and experts to deploy new strategies and the
willingness of the entrepreneur to incorporate the new technology. Wakkee et
al.,(2015) states that high technologies are good for big companies but for startups, it
is better for that entrepreneur to integrate innovationthat they can manage as per the
economies of scale of the startup. Bentzen et al. (2012), have a different notion as far
as startup innovation is concerned, they argue that t innovation is what will yearn
great success for a given startup. Their suggestion oninnovation is that startups should
consider including as much innovation as opposed to most traditional companies
whose growth have staggered due to lack of new ideas to implement in their business
models.

Quarter to quarter growth Paramasivan, & Muthusamy

Paramasivan, & Muthusamy, S. Year-2016

explains that the growth of startups in terms of finances has above 25% quarter on
quarter, the main areas that are experiencing robust growth include Mumbai and
Bangalore. Bangalore has managed to be on the forefront since it investments have
been massive as compared to other cities like Mumbai. Carvalho (2016) in his writing
indicates that it is the IT hub of India since most tech savvy's are housed within
its bounds. Statics show that Bangalore has over 100% growth of Tech startup on a
yearly basis. The statistical analysis of startup trends in India he shows that
investment value in Mumbai and Bangalore have risen to over 150% in the last ten
years. Some of the companies that are notable in the startup outburst are the Little
internet, Blackbuck,Housejoy, Porter medical among other startups that have emerged
in the Indian market. Carvalho (2016) also agree with the earlier argument that
banaglore is the hub of the Tech savvy startup since it tends to have the right external

63
factors that can nurture the growth of startups in the region. The statistics below show
the distribution of startups in India in terms of value in US Dollar and the volume of
the startup.

Factors influencing the success of startups in India.

NASSCOM Report. Year-2021

Year of the Titans” underlines how 2021 was the year of unparalleled growth in the
Indian tech start-up ecosystem. Many records have been established this year across
different areas: unicorns, funding, merger & acquisitions, investors, and more. The
report also highlights key aspects of the ecosystem which is strengthening its core like
rising inclusivity and diversity, intensifying corporate participation, deepening
investors’ commitment, and much more. The report ends with some proactive
measures that would allow us to accelerate, and de-risk, the tech start-up ecosystem
growth.

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 CHAPTER 4

4.1 INTERVIEW

For the survey of Study of Startups in India, I am conducting interview with my very
close friend and Entrepreneur Mrs. Dhananjay Gowda. He the founder of the
company tag digital solution.

1. What is the Name of your company and what it actually does?

Gowda: My company name is tag digital solution. We make digital visiting

cards..You just scan that card and you will get all the details of the company.

2. At which age you started your business?

Gowda: I started at the age of 20.( Jan,2021)

3. Is your business is in partnership or sole ownership?

Gowda: It is partnership venture. Me and my friend Ramanjeet Chabra. We are

partners. He looks into digital work and I am all marketing work.

4. What would be the source of your funds for the startup?

Gowda: We invest our own funds. We are not talking any kind of loan form market.

5. How much amount you initially invested?

Gowda: Rs 100000

6. Why you choice to do this startup?

Gowda: Because we both wants to do revolutionized in visiting card business

7. What were your requirements of the business?

Gowda: First of all we register our company and our basic requirements are Printing
Machine for card, cloud service.

8. Are you willing to merge your business with any other company?

Gowda: No; We don’t want to merge our business to any other firm . We looking
forward to work with Government of India and make innovation in visiting card.

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9. What are your future goals?

Gowda: Looking to expand more products.

10. Who inspired you to do the startup?

Gowda: We both are self-motivated. We both want to do something new and

innovative.

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 4.2 DATA ANALYSIS ,INTERPRETATION AND
PRESENTATION

1) Question title: Age group of people. Number of responses: 102

responses

Interpretation:

78.4% of the respondents falls under Age group of 18-25, 12.7% of respondents under
the age of 26-35.

3.9% means almost 4% respondents fall under Age of 36-45 and almost 5% above the
Age 45.

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2)Question title: Gender of Respondent

Interpretation:
There are 53.9% means almost 54% male respondents are in survey of the Startup and
45.1%mean 45% of female respond to the survey.

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3) Question title: Occupation of people

Interpretation:
This study represents occupation of peoples. In this form of question get mix type of
answers, but mostly 69.6% is Student and 14.7% is salaried people in the survey. And
8.8%Professional is respondents of the survey. After this Business and Self-
Employed are there..

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4) Question title: Do you have any idea about the startup?

Interpretation:
According this question positive response i.e.63.7% people have their own startup
idea and 21.6% people may have startup idea and around 14.7%people respond
negative and they don’t have any startup idea or that less aware about the startups.

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5) Question title: What would your preferred choice of business be ?

Interpretation:
According to this survey 71.6% people choice is startup rather than go for Family
Business or other things to do. 11.8% people want to join their own Family
Business.16.7% population wants to go for other things.

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6) Question title: Are you willingly to go for a startup business ?

Interpretation:
65.7% of people willing to go for startup business and 26.5% people maybe wants to
do their own startup. 7.8% negative response are there .

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7) Question title: What would be your choice for Startup?

Interpretation:
37.3% people choice small startup business rather than go for other business type
follow 22.5% people go for lifestyle startups and 12.7% , 11.8%,9.8% respondents go
for Buyable startups, social startups and Scalable startups respectively. Around 6%
people prefer Large Company startups.

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8) Question title: What would be your choice of industry for the startup?

Interpretation:
According to respondents 46.1% choice food startups that is the highest percentage,
following 23.5% people wants to go for other industry rather than go for finance,
Technology, Education and Hospitality. Finance industry is also one of the growing
industries now a days and 11.8% means almost 12% people choose finance industry
for startup.

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9) Question title: What of the following would you prefer?

Interpretation:
On this observation 52.9% means 53% people wants to become a sole owner of the
business rather than go for partnership business but still 42.2% of population think
that go for partnership business and minimize the risk of loss and other .

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10) Question title: According to your opinion which startups will be
trending and growing in the near future?

Interpretation:
According to respondents opinion Lifestyle startups and small business startups will
growing in near future in high rate. Buyable startups are also in race of startups and
take 17.6% rate.

14.7% people think scalable startups and social startup are trending in
the market.

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11) Question title: What would be the source of your funds for the
startup?

Interpretation:
For minimizing the risk people choose saving open over the bank loan and
government schemes. 38.2% of population selects the saving for the startup funding.

29.4% people believe on bank loan for startups and 24.5% people take
advantages of government scheme.

Some group of people chooses other funding source for startups which
is 7.8%.

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12) Question title: What are the requirements for your startup ?

Interpretation:
13.7% people required software Technology for their startup business.14.7% and
18.6% population required Real Estate and Laborer respectively for the growth of
startup business.

60% of people required real estate, software technology and labor which
means all the aspects for the startup business.

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13) Question title: How much fund would be required for your startup
business?

Interpretation:
According to observation people wants funds for the startup business which they
collect from various finance institutes or their own saving.

Many people required average 2000000 to 5000000 rupees fund to run the business
smoothly.

14) Question title: Would you like the aid of government schemes for
your startup business?

Interpretation:
Through this question understand that 76.5% are aware about the schemes provided
by Government of India. This is a big achievement of Government because knowing
the scheme is important for funding and startup idea.

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15) Question title: Which of the following government schemes for
startups are you aware of?

Interpretation:
Many people aware about the schemes provided by Government of India.

59.8% people are familiar with Pradhan Mantri Mudra Yojana and The startup India
Scheme is also well known for Indian population.

Government runs many programs to create awareness of startup schemes.

16) Question title: Which startup company do you look at for

inspiration?

Interpretation:
Many people inspired form big companies and wants to do some new and innovative
in upcoming age.

Zomato, ola, lenskard,Swiggy, Nykaa, boat these are some famous

brands and people get inspired form these startups

Not only big companies inspired the most but all small startups play
important role to inspired youth of Growing India

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 CHAPTER 5

CONCLUSION AND SUGGESTION

India has emerged as a hub for startups over the past decade, with a booming
entrepreneurial ecosystem and supportive government policies. The country has
witnessed an impressive growth in the number of startups in recent years, which has
attracted significant investments from both domestic and international investors. This
has created new opportunities for job seekers, boosted the country's economy and has
also contributed to the country's technological advancements.

One of the key factors behind the success of Indian startups is the availability of a vast
pool of skilled and educated young people. The country has a large population of
tech-savvy individuals who are eager to explore new business ideas and are willing to
take risks. Additionally, the government has taken several measures to promote
entrepreneurship, including tax benefits and subsidies for startups, which have
encouraged more people to pursue their business ideas.

However, despite the growth of the startup ecosystem, the industry still faces several
challenges. Some of the major hurdles include access to capital, regulatory
complexities, and a lack of infrastructure in certain parts of the country. Addressing
these challenges will require concerted efforts from both the government and the
private sector.

In conclusion, startups in India have a bright future, given the country's supportive
policies and large pool of talent. However, to sustain this growth, stakeholders must
address the challenges faced by the industry and work together to create an
environment that encourages innovation and entrepreneurship. Additionally, there is a
need for more investment in infrastructure and technology to ensure that startups in
India can continue to grow and thrive in the years to come.

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 CHAPTER 6

BIBLIOGRAPHY

1. https://www.theeconomicsjournal.com/article/view/16/2-1-4
2. https://www.ringcentral.com/us/en/blog/types-of-startups/
3. https://www.masslight.com/posts/types-of-startups
4. https://medium.com/sciforce/understanding-your-startup-5aa1b95e965c
5. https://icubedigital.com/impact-of-startups-in-the-indian-economy/
6. https://www.livemint.com/
7. https://www.startupindia.gov.in/content/sih/en/funding.html
8. https://www.msmex.in/learn/government-schemes-for-startups-and-msmes-in-
india/
9. https://www.cemexventures.com/startup-stages-phases/
10. https://thelogicalindian.com/trending/only-5-states-home-to-majority-of-
startups-in-india-maharashtra-tops-the-list-
39343#:~:text=With%2015%2C571%20government%2Drecognized%20startu
ps,every%20state%20and%20union%20territory
11. https://www.lifestyleasia.com/ind/entertainment/success-stories-from-shark-
tank-india-startups-that-achieved-tremendous-growth-after-the-show/
12. https://www.cemexventures.com/startup-stages-phases/
13. https://www.projectionhub.com/post/startup-balance-sheet

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 CHAPTER 7
ANNEXURE

1. Name

2. Age
o 18-25
o 26-35
o 36-45
o 45+

3. Gender
o Male
o Female
o Other

4. Occupation
o Student
o Professional
o Business
o Self-Employed
o Salaried

5. Do you have any idea about startup?

o Yes
o No
o Maybe

6. What would your preferred choice of business be?

o Startup
o Family Business
o Other

7. Are you willingly to go for a startup business?

o Yes
o No
o Maybe

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8. What would be your choice for Startup?
o Lifestyle startups
o Small business startups
o Scalable startups
o Buyable startups
o Large company Startups
o Social startups

9. What would be your choice of industry for the startup ?

o Food
o Finance
o Technology
o Education
o Hospitality
o Other

10. Which of the following would you prefer?

o Sole Ownership
o Partnership
o Other

11. According to your opinion which startups will be trending and

growing in the near future?
o Lifestyle startups
o Small business startups
o Scalable startups
o Buyable startups
o Large company Startups
o Social startups

12. What would be the source of your funds for the startup?
o Saving
o Bank Loan
o Government Scheme
o Other

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13. What are the requirements for your startup?
o Real Estate
o Software Technology
o Labor
o All of the above

14. How much fund would be required for your startup business?

15. Would you like the aid of government schemes for your startup
business?
o Yes
o No
o Maybe

16. Which of the following government schemes for startups are you
aware of?
o Pradhan Mantri Mudra Yojana
o Credit Guarantee Trust Fund for Micro & Small Enterprises
o Venture Capital Assistance Scheme
o The Standup India Scheme
o Single Point Registration Scheme
o Raw Material Assistance Scheme
o Other

17. Which startup company do you look at for inspiration?

85