The Startup Journey

In the recent Union 2012 budget, the government (GOI) announced that an investment by an individual into an Indian company would be treated as income from other sources, taxed at the rate of 30% on the difference between fair market value and the premium being paid, with the assessing tax officer being the arbiter! This regressive measure led to a hue and cry being raised with the Government agreeing to take a relook at this issue. But what of the many thousands of crores that are allocated for entrepreneurship with no discernable impact? No hue and cry? The budget also announced the setting up of a Rs 5000 crore India Opportunities Venture Fund to help micro, small and medium enterprises. In addition, the GOI extended by 5 years weighted deduction of 200 per cent on R&D expenditure as well as introduced weighted deduction of 150 per cent on expenditure related to skill development of employees. 40% of India’s exports and 45% of India’s manufacturing output is contributed to by t...

Economic Times has an article on some of the lesser known funding options available for start-up ventures. Govt grants and loans The Small Industries Development Bank of India (SIDBI) has also formed the SIDBI Foundation for Risk Capital to develop and provide appropriate risk capital products for Micro, Small and Medium Enterprises (MSMEs) in different industry segments. Some of the products introduced are equity and equity-like instruments and mezzanine instruments like optionallyconvertible debt and subordinate debt for MSMEs. With a corpus size of 2,000 crore, the fund will invest a minimum of 25 lakh and a maximum of 10 crore in the form of term loans or assistance. “Our products are easy to work around with. Risk capital has both the characteristic of equity and debt. It’s a very flexible product,” says SIDBI general manager R Dharmaji. ... Credit Guarantee Scheme It is to bypass the issue of collateral that the government has come up with the Credit Guarantee Fund Trust for...

DARE magazine has an article on the various government-related agencies that provide funding for technology start-ups. Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. Click here to learn about Venture Intelligence's products and services for entrepreneurs.