Startup ecosystem

1. ENTREPRENEURSHIP
UNIT-2
Startup

2. Start-up and Start-up Ecosystem
• Understanding the concept of start-up
• Indian definition and scope of start-up
• Overview of start-up ecosystem stakeholders: venture capitalist,
evangelist, mentors and advisors, co-working spaces
• Role of Incubator and accelerators, Grants as mode of initial
funding for start-ups

4. STARTUP
• A Startup is a high-growth fueled business in its early stages,
typically characterised by high uncertainty and risk.
• Startups differentiate itself from traditional firms by its
innovation, creativity and agile approach to growth.
• The term Startup refers to a company in the first stage 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.

5. STARTUP
• Startups are companies or ventures that are focused on a single
product or service that the founder ( Entrepreneur) wants to
bring to the market. These companies typically don’t have a
fully developed business model and, more crucially, lack
adequate capital to move onto the next phase of business. Most
of the companies are initially funded by their founders.

6. Indian definition of Start-up
An entity shall be considered as a Startup:
1. The Startup should be incorporated as a private limited
company or registered as a partnership firm or a limited
liability company.
2. Turnover should be less than 100 Crore rupee in any of the
previous financial years.
3. An entity shall be considered as a Startup up to 10 years from
the date of its incorporation.
4. The Startup should be working towards
innovation/improvement of existing product, services and
process and should have the potential to generate
employment/ create wealth.
An entity formed by splitting up or reconstruction of an existing
business shall not be considered a Startup.

7. Number of Government recognized Startups from
financial year 2016 to 2022
India has more than 90,674 DPIIT recognized Startups, making
it the world’s third-largest Startup ecosystem in the world after
the US and China.
Year Number of Startups
2022 19,500
2021 20,160
2020 14,596
2019 11,417
2018 8,775
2017 5,233
2016 471

8. Cheetah, Gazelle & Unicorn
• A Cheetah is a startup that could be unicorn in four years.
Valuation of cheetah ranges between $200 million to $500
million.
• A Gazelle is a startup that could be a unicorn in two years.
Gazelles have an estimated valuation ranging from $500
million to $1billion.
• Unicorn companies are those that reach a valuation of $1
billion without being listed on the stock market.

9. Challenges faced by Startups
A study, “Entrepreneurial India” by the IBM Institute found
that 90% of Startups fail with in the first five years. And the most
common reason for failure is lack of-
1. Planning
2. Execution
3. Lack of Innovation
4. Funding
5. Lack of mentorship
6. Human resource

10. Startup India
• In August 2015, Prime Minister, Shri Narendra Modi,
announced the launch of the National Flagship Initiative-
Startup India, with a mandate to promote and encourage
young entrepreneurs of our country. Startup India scheme
launched on 16th january,2016.The action plan of this
initiative is based on following three pillars:
1
• Simplification and Handholding
2
• Funding Support and Incentives
3
• Industry Academia Partnership

11. • By launching Startup India scheme government’s aim is
transform India into a Startup Nation, “ A country of job
creators instead of job seekers”.
• The Startup India initiative aim to fill gaps in the economy for
the growth and development of startups and also boost digital
entrepreneurship at the grassroots.
• Startup India is a flagship initiative of the government of India,
intended to build a strong eco-system for nurturing innovation
and startups in the country that will drive sustainable economic
growth and generate large scale employment opportunities.

12. Why Startup India
• To boost up/Promote Startup/Entrepreneurship.
• Core objective is to generate maximum employment.
• Encourage the people who have the potential to innovate and
start their own business.
• To boost up Banking sector
• Be a job creator.

13. Benefits provided under Startup India
1. Reduction in patent registration fee
2. Easy access to funds
3. Tax holiday for 3 years
4. Apply for tenders
5. R & D facilities
6. Self-certification compliance
7. Tax saving for investors
8. Choose your investor
9. Meet other entrepreneurs
10. Single window clearance even with the help of mobile app
11. Encourage entrepreneurship

14. Impact of start-up india on indian
economy
• Creation of job
• Increase export
• Increase production will lower the price of goods and
services.
• Marginal propensity to consume MPC will go up
• Boost GDP

15. Scope of Startup in India
India has the third-largest startup ecosystem in the world, with
consistent annual growth of 12 -15% predicted for the coming
year. The report revealed that a record-breaking 46 Indian firms
earned unicorn status in 2021, 19 Startup earned unicorn status in
2022, bringing the country’s total number of unicorn startups to
108, with the majority operating in the services industry. Three
primary scope of Start-Up Companies in India are as-
1. Increase in Globalization
A lot of factors, including globalization and the rise of the IT
industry were majorly responsible for the rise of entrepreneurship in
India. Higher pay scales with good designations offered by several
private sectors or multinational companies encouraged the people.

16. 2. Startup Ecosystem
The startup ecosystem is receiving a lot of support from
international and Indian investors, who have increased trust in the
sector and have committed funding to enable these businesses to
develop. Today, the Indian economy is undergoing an immense
makeover with new strategies rolling into the market
emphasizing and enhancing the role and contribution of startups.
3. Make In India initiative
The government of India launched the “Make in India” project to
encourage businesses to create, produce, and assemble goods in
India and to encourage targeted investments in manufacturing.
The goal of the strategy was to create a business-friendly
atmosphere, buildup an effective infrastructure, and open up new
markets to foreign investment.