Monday, January 18, 2021

India’s 1000 Crore Seed Funding For Startups

The Prime Minister Narendra Modi has announced on Saturday that the government will launch a Rs 1,000-crore seed fund for startups. The startup is...

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    and When Does a Stop Being a Startup?

    India has gone on to become the third-largest hub in the world and startups are playing an important role in making Indian cities live up to the standards of Silicon Valley. But and ? This depends on various factors.

    What constitutes a startup?

    According to the Ministry of Commerce and Industry, an entity that is registered as a private limited company as defined in the Companies Act, 2013 or registered as a partnership firm under section 59 of the partnership act, 1932 of a limited liability company under the LLP Act of 2008 in India is called a startup if:

    Its period of existence from the date of incorporation is less than 10 years,

    Its annual turnover does not exceed Rs 100 crore in a financial year.

    It is working towards innovation, development, improvement of products or processes or services.

    Or, if it is a scalable business model with a high potential for employment generation or wealth creation.

    But should the number of years a startup has been around be a deciding factor, or should it based on growth and profitability?

    Some factors that decide when a startup has leaped.

    In technical terms, a startup stops being a startup as soon as it crosses 100 crores turnover or ten years of incorporation.

    You enter in the corporate culture when your team grows to 50-100 people.

    An entity struggling with its business model continues to remain a startup until it decides on a business model they want for the long term.

    Once a company has raised angel or seed and done two rounds of large venture capital or private equity investment, it is not a startup anymore because it has found its business model and is just expanding. These companies are in growth mode, not startups.

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