1.

OVERVIEW
Background
A startup company (startup or start-up) is an entrepreneurial venture typically describing
newly emerged, fast-growing business.
Definition of the startup usually refers to acompany, a partnership or an organization designed to
rapidly develop scalable business model.
Often, startup companies deploy advanced technologies, such as Internet, communication,
robotics, etc. These companies are generally involved in the design and implementation of
the innovative processes of the development, validation and research for target markets.
The term became internationally widespread during the dot-com bubble when a great number
of dot-com companies were founded.
Evolution

Startup companies can come in all forms and sizes. Some of the critical tasks are to build a cofounder team to secure key skills and resources in able to conduct research and build a
first minimum viable product (MVP) to validate, assess and develop the ideas or business
concepts. In addition to this, opportunities to establish further and deeper understanding of the
ideas or business concepts as well as their commercial potential are important. A Shareholders'
agreement (SHA) should be agreed early on to confirm the commitment, ownership and
contributions of the founders and to deal with the intellectual properties being generated for the

startup. Business models for startups are generally found via a bottom-up or top-down approach.
A company may cease to be a startup as it passes various milestones, [11] such as becoming
publicly traded in an IPO, or ceasing to exist as an independent entity via a merger or acquisition.
Companies may also fail and cease to operate altogether. The size and maturity of the startup
ecosystem where the startup is born and grows have a clear effect on the volume and success of
the startups.
Investors are generally most attracted to those new companies distinguished by their strong cofounding team, risk/reward profile and scalability. That is, they have lower bootstrapping costs,
higher risk, and higher potential return on investment. Successful startups are typically more
scalable than an established business, in the sense that they have the potential to grow rapidly
with limited investment of capital, labor or land.[12] Timing has often been the single most
important factor for biggest startup successes,[13] while at the same time it's identified to be one of
the hardest things to master by many serial entrepreneurs and investors. [14] Startups encounter
several unique options for funding. Venture capital firms and angel investors may help startup
companies begin operations, exchanging seed money for an equity stake. In practice though,
many startups are initially funded by the founders themselves. This is known
as Bootstrapping. Factoring is another option, though not unique to startups. Other funding
opportunities include various forms of crowdfunding, for example equity crowdfunding.[15]

Chapter I : Introduction: Why Entrepreneurship

Chapter II : What Motivates Entrepreneurship
Chapter V : Education, Innovation and Entrepreneurship
Chapter VI : Business Environment for Entrepreneurship
Chapter VII : Conclusion: Encouraging Entrepreneurship

Introduction: Why Entrepreneurship

Entrepreneurship is the professional application of knowledge, skills and competencies and/or
of monetizing a new idea, by an individual or a set of people by launching an enterprise de novo
or diversifying from an existing one (distinct from seeking self employment as in a profession or
trade), thus to pursue growth while generating wealth, employment and social good.
Entrepreneurship means different things to different people.1 Conceptually and in practice, the
term hints of no stereotypical model. Yet its very etymology derived from the French
entreprendre which literally means, to undertake2 indicates the minimum characteristics of
an entrepreneur.
From the perspective of economic functions, three crucial characteristics of entrepreneurial
activity are: risk taking, innovation and venturing into new business activities for profit.

Role of Entrepreneurship in the Economy: Creating Value

The entrepreneur who implements new combinations of means of production plays a crucial
role in disturbing the status quo through innovation or creative destruction and thereby
becomes an agent of change.4 As such, the dynamic equilibrium achieved by a constantly
innovating entrepreneur could generate the conditions for:
a. increasing opportunities for employment (comprising various competitive skill sets);
b. additional wealth creation;
c. introduction and dissemination of new methods and technology; and d. overall economic
growth

What Motivates Entrepreneurship

1. Money.
You can deny it all you want, but the vast majority of entrepreneurs get into the game at least
partially because of the potential to make lots and lots of money.
2. Flexibility.
Some entrepreneurs venture out on their own because theyre tired of the demands of traditional
work. In a high-level position, the demands are exceptional -- working long hours, catering to the
whims of your bosses and clients, and being stuck in the same old rut of responsibilities. Being

your own boss in the world of entrepreneurship frees you from those restraints. You can work
your own hours, wherever you feel like working, and set your own goals and responsibilities.
3. Control.
The desire for control drives many entrepreneurs who aspire to attain a leadership position.
When youre the boss of your own organization, youll get to call all the shots, from who gets
hired and at what salary to what new strategic directions your business heads down
4. Teamwork.
Some people love working with others. They like the atmosphere of team-based creative problem
solving, the interactions between mutually respectful, intelligent people, and the thrill of
succeeding together. Some jobs offer direct supervisory or leadership roles, but theres nothing
like building your own team from scratch.
5. Legacy.
Some entrepreneurs arent in it for the money or the experience as much as theyre in it for a
lasting legacy. They might want to become the face of a brand and earn a taste of fame along the
way. They might want to leave behind something that appreciates them. They might even want to
pass the business on to a future generation. The point is, they want to create something
meaningful thats going to outlast them. This motivation is one of the strongest for entrepreneurs,
because it cant be achieved in any other application, and it lasts a lot longer than money or
experience.

Entrepreneurship includes:
creativity, innovation and risk taking

ability to plan and manage projects in order to achieve objectives

support in daily life at home and in society

employees being aware of the context of their work

being able to seize opportunities

a foundation for more specific skills and knowledge needed in establishing social or
commercial activity

Start ups

Startups are essentially of two kinds. One that starts something ground up, something that no one
has thought about and is often ground breaking. This type of startup is difficult to create but once
created often sees unprecedented growth. The second kind of startups that we see around us is
primarily the ones that do not want to reinvent the wheel. They are akin to adding old sauce in a
new dish to create something new and innovative.
Whatever may be the kind of startup, Indian startups face its own set of challenges. The
challenges can be classified as:
Culture Entrepreneurship and startups are only a recent phenomenon in the country. It is only in
the last decade and half that people in the country have moved from being job seekers to job
creators. Doing a startup is tough and every country sees more failures than success. More often
than not an entrepreneur needs to be prepared to face failures and unprecedented hardship.
However, culturally we are not groomed to fail and failure is frowned upon. Entrepreneurship
thrives on celebrations and a society that fails to appreciate business failures stifles innovation
and creativity even before it can start. A startup failing has to be OK as failures often teach an
entrepreneur, what to do and what not to do.
Mentoring Doing a startup is perilous and often a lonely journey. You may have cofounders, but
you may not necessarily possess the business acumen to succeed.
Having a brilliant idea is different from making that idea a business success. For a startup, it is
very important to have mentors who have been through a similar process of starting or have
business experience. A great mentor is often what separates success from failure by providing
valuable inputs. However, there is no formal mechanism to mentor startups in the country. Every
mentoring that happens is on an adhoc basis. A startup that has raised funds can count the
investors for some form of mentoring, but honest, unbiased, good business mentors are far and
few in between. For startups finding a good mentor is often an uphill task.
Policies Government is the single largest enabler for the entrepreneurial ecosystem.
Government's role in ease of doing business and helping companies start is vital to ensuring
success. The latest World Bank Ease of Doing Business (out of 189 economies) ranks India at an
abysmal 142 where starting a business rank for the country is even lower at 158.
It is uncannily difficult to start a business in India and myriad laws and regulations means it takes
about 30 days to comply compared to just 9 days in OECD countries. The government's role has
so far been limited to giving out grants and loans, but without an effective, enabling

environment, implementation is far off the target. In this regard it will be interesting to see the
contours of the recently announced Startup Fund in this year's budget. For startups to thrive and
succeed, the government has a lot to do and understand the importance of entrepreneurship in
economic development.
Hiring The economy has been in a flux and along with the world economy the heady days of
high growth are long gone. In an uncertain economy where one is not sure about demand, for a
startup, it is particularly difficult to make correct estimates on the number of employees needed.
This, however, is the minor problem where the biggest issue is about finding skilled manpower.
India's skilling need is so huge that National Skill Development Corporation (NSDC) has been
mandated to skill 150 million Indians by 2022. For a startup, it is particularly difficult to attract
and hire talent and skilled workers. A startup often cannot match the salaries drawn at larger
companies nor is a job at a startup seen as a steady one. This means startups face severe hiring
challenges and at times have to settle for the next best option.
Funding Capital and access to capital has been a perennial problem for startups. While, of late
angel investors, venture capital and private equity have brought succor to some extent, a large
number of startups still grapple to raise funds from institutional setup. Funding challenge is not
merely limited to seed rounds, but also for vital Series A and B rounds. For a startup looking to
scale, it is still very hard to raise rounds to scale as the number of investors that write larger
cheques in India are very limited in number.

Five forces
The bargaining power of suppliers refers to how much power to negotiate price and other
terms your suppliers have. If youre a small company and building a product with rare inputs that
are only sold by a handful of companies, your suppliers probably have a lot of bargaining power
because if you dont buy from them you wont be able to get what you need elsewhere. On the
other hand, if youre a massive company and purchasing commodity products that are easy to get
from a number of different suppliers, then the bargaining power of suppliers is severely limited
because if you dont like their terms you can just go elsewhere. Walmarts suppliers have very
limited bargaining power whereas the suppliers for a top chef who needs a very specific and rare
ingredient, such as a particular truffle, have quite a bit.
The bargaining power of buyers refers to essentially the same thing as the bargaining power of
suppliers, but as it applies to your customers. Do you make a rare product that they cant get
from anyone else or do you sell a commodity that they could easily find elsewhere? The more

difficult it is to get the same product or service elsewhere, the less bargaining power your buyers
have. On the other hand, if you sell a commodity, like office supplies, the buyer has a ton of
bargaining power because if you dont give him/her the deal s/he wants s/he can just go
somewhere else and get the exact same product.
the threat of new entrants refers to the barriers of entry into the industry and whether they are
strong enough to prevent a lot of new companies from jumping in to compete or whether they are
particularly weak and the market could easily be flooded with a bunch of new competitors.
The threat of substitute products refers to the ability of a customer to decide to use a different
product instead of yours to solve the same problem or meet the same need. This doesnt mean
that the customer chooses the store brand deli meat over the Boars Head thats just
competition within the same product. It means that the customer decides not to buy the deli meat
at all and instead purchases spam. The threat of substitute products is often overlooked by new
entrepreneurs who will come in and say they have a brand new product with no competition
whatsoever. However, substitute products should be viewed as a type of indirect competition.
The first microwave competed with the conventional oven even though it was a brand new
product because the conventional oven was a substitute product.
Finally, the last of Porters 5 Forces is competitive rivalry. This is pretty self-explanatory and
refers to the other players in your market with whom you compete.
Now that you understand the concept behind Porters 5 Forces, lets analyze how these forces
affect your potential business. Take a look at the figure to get a better understanding of how you
should think about what affects each force and then use that knowledge, to assess how the 5
forces will act on your business.

As you do so, its important to recognize which forces may make it especially difficult for you to
create a profitable business and which ones may actually work to your advantage. Be thorough as
you analyze your business to make sure that you carefully consider all of the possibilities within
each type of threat and whether that particular threat poses a large danger or a small danger to
your budding business. This knowledge will be invaluable to you when youre first deciding
whether to move forward with building your business as well as each time you re-assess your
strategic plan.
When an organization is established and its setup is laid out, a proficient and wellthoughtbusiness strategy has to be adopted. With this strategic approach, the nature, ability, and
quality of a business are assessed: there are various internal and external factors that may
determine an organizations probable future. In this article, we will thoroughly examine two of
the most efficient business management tools: SWOT analysis and PEST analysis. Business
domains are evaluated at large by implementing these analysis techniques.
SWOT Analysis
SWOT is an acronym for strengths, weaknesses, opportunities and threats. It is a model or
representation of your business which determines the possible outcomes. It controls whether
your business is leading towards success or is a risk of failure. SWOT opens up new ways to
develop and expand businesses.
Strengths
An organizations strength is its internal characteristic. It determines the advantages you have
over your competitors and how you can use these strengths to excel in your business.
Weaknesses
Similar to the strengths, weaknesses are also an internal characteristic of an organization. It
determines the drawbacks and the weak points of your business in context of any underlying
project.

Opportunities
It is an external factor for the business. These are the feasible chances that havent been availed.
Threats
It is an external effect that may have a negative impact on your business.
Implementation of SWOT Analysis
To use SWOT analysis for a business, analyze the capabilities of your business and list all the
strengths, weaknesses, opportunities and threats.
Example
Consider the example of a small-scale pizza shop located in a mall in the city downtown. The
pizza shop offers a wide variety of pizzas that have been uniquely served with wild and
scrumptious toppings. To buddy up with pizzas, they also offer side orders, such as garlic bread
and potato wedges. The SWOT analysis for this pizza shop is as follows:
Strengths
Product: Superior quality food with exceptional toppings.
Price: Much cheaper than popular brands.
Presentation: Skillfully designed pizza platters.
Atmosphere: Comfortable spot with an aroma of good food.
Weaknesses
Competition: Larger than life brands.
New Place: Not popular and not formally setup.
New Staff: Lack of trained and professional staff.

Lack of Experience: As a startup, one has to learn a lot more and theres a lot of room for
improvement.
Opportunities
Expand: To launch a franchise with a few more chains within the same city.
Promotion: Marketing for pizza fanatics who are tempted by the offers.
Threats
Competitors: More pizza shops opening providing a wider range of choices for pizza lovers.
Prices: imported ingredients for better quality food may result in increase in prices.
When you finalize your business plan at the end, consider the abovementioned factors and plan
accordingly.
PEST Analysis
PEST is the political, economic, social and technological factors that have an impact on a
companys performance. It can be implemented separately or with other tools according to the
projects requirements. With a PEST analysis, your business can take a futuristic approach and it
helps an organization in overcoming obstacles. Listed below are the four factors that lay the
foundation for a comprehensive PEST analysis:
Political
Political factor shows government and law enforcement agencies exert an influence on an
organizations infrastructure. Factors such as copyright issues, tax payment and other safety rules
and regulations play an important role in any business growth and prosperity.

Economic
The basic economic factors that have a powerful impact on business from the outside include
credit availability, inflation rates, interest rate and much more. The economic factor holds
importance because it can amend the blueprint of a business.
Social
Social factor emphasizes on how culture affects business and whether they enforce a positive or
negative impact on certain businesses. Population growth rate, religious and ethical behavior,
marketing trends and educational awareness schemes are all part of the social factor.
Technological
This factor shows how the use of technology affects the growth and success of a business. It
encompasses the technological research of recent times and portrays the consequences and
influences laid out by the advancement in latest technology, especially with the latest innovation
and trends.
Implementation of PEST Analysis for a startup
In order to use PEST analysis for a startup, we need to consider the political, economic, social
and technological factors that lay its foundation.
Example
Mentioned below is an example of a hotels PEST report.
Political Factors
A government sets up rules and regulations for cleanliness and proper hygiene. The hotel
management must ensure quality food and the room service must be up to the mark. The food
and health department must ensure the food is healthy and inspections are conducted in a timely
manner.

Economic Factors
Economic factors help you choose your marketing strategy. They determine the effectiveness of
your business and are a necessity for your business. The inflation rates affect the prices of
everything that is being used or supplied to the hotel. The salaries of employees also depend on
the rate of inflation. It may increase or decrease over time and the business has to be prepared to
deal with the fluctuations.
Social Factors
The hotel management must know that people belonging to different cultures are accustomed to
different kinds of foods. For instance, Muslims dont even touch pork and Hindus abominate
beef. Every individuals cultural identity must be respected and preserved. Likewise, rooms must
be given to residents based on their priorities.
Technological Factors
Optimal use of technology is beneficial for marketing. The hotel management must use the latest
technology to update the records of each customer and manage their data proficiently.
Recommended read: PESTLE Analysis of Marriott International, SWOT Analysis of Hotel
Industry
Conclusion
Regardless of the scale of a business, it is necessary that strategic management is properly
instilled within the organizations roots for better productivity and reduced risk in the long run.

evolution and growth of startup in world

Indian startup scenario before Independence

The colonial era saw entrepreneurship to be confined by the boundaries of social, cultural and
religious rigidities. Further, the colonial rule brought in an array of political and economic
factors that were non-conducive for entrepreneurship. The volatile political environment, lack of
favourable laws, harsh tax policies restricted the surge of entrepreneurship. The education system
did nothing to encourage emergence of startups during this period. Slowly, the social reforms,
rising nationalism and betterment of education brought steady change in the scenario.
In spite of these drawbacks, the East India Company, deliberately or accidentally, seems to have
played a vital role in the emergence of Indian entrepreneurs. The popularity of swadeshi
campaign, a campaign focussed on the use of indigenous goods by locals, is also believed to
have played a significant role in the growth of startups in the country.
The period between the world wars was marked by the visible growth of entrepreneurship in
India. The emergence of the Managing Agency System played a significant role in growth of
entrepreneurship during this period. The following decades brought many opportunities for
business that was effectively capitalised by entrepreneurs. This coupled with the society attitude
broadened the vision for the Indian business class. This remained to be the backdrop for the
growth of Indian entrepreneurship after Independence.
Growth of Entrepreneurship after Independence
Independence was marked by significant shift in the entrepreneurial sector. With the new found
freedom, entrepreneurs gained the confidence and belief to pursue their entrepreneurial dreams.
Need of employment and regional development paved way for startups. However, during this
period policies were not formulated with any special emphasis on entrepreneurship.
Development of industries on large scale was still the focus.
The transformation of Indian Startup Ecosystem
The next few decades witnessed significant growth in the entrepreneurial ventures across
economic and social sectors. With the changing environment, entrepreneurship gained
importance. The last decade has seen noteworthy improvement in the quality of startups in India.
Institutions have started to take business and academic interest in startups. In the last few years,
they have exhibited potential and proficiency, which has made the global investors to venture in
the Indian startup ecosystem.
The accelerated funding coupled with the innovative and incrementally competent growth
of startups like Zomato, Flipkart, Snapdeal, etc. and their potential to grow as world class
companies has set benchmark and hope for many aspiring entrepreneurs. The foundation

for a sustainable startup ecosystem has already been laid. What remains to be seen is how we
capitalize and develop on it while fighting the logistics, market and funding challenges that come
along.
Startup Recipe for success
While we are all excited about the accelerated growth of Indian startups, unfortunately, 90
percent of startups fail to sail through phases and succeed. While this may seem to be a rather
distressing statistic for entrepreneurs, it is the cold truth. Further, it is aimed at aspiring startups
to work smarter to reach their goal. Because entrepreneurship is essentially a journey into the
unknown, it is upon startups to find their own magic sauce to success. Here are a few reasons
how successful startups find their way to success.
Vision and the art of getting things done
Startups thrive on clear, precise vision. It is their anchor that helps them to keep going when
everything around is tough. Having a clear plan and monetizing from the very beginning can
help you through your long way to success. As a startup, you want things to get done fast. In fact,
thats what will take you steps ahead of your competitors. The more productive you are, the
better you can succeed and faster you can attract funding.
When you are a startup, it is not as easy to shun away from responsibilities. Being a startup and
wanting grow rapidly, you must learn to understand that your responsibilities and roles will
overlap. Further, as an entrepreneur, you must be ready to step up to every issue. If you are
waiting for others to do work because it isnt your role or responsibility, you are designing your
downfall.
Tackling risk and challenges with determination
Risks are another part of startup success. However, assiduity is necessary while taking such
decisions to reduce any fall that may occur. Challenges are part of every startup; your
determination to overcome the challenges even when the ride gets rough is what makes you a
successful startup. Finally, whatever is the challenge, you must work together as a team with
tenacity to make things happen.
Successful startups are the ones that are always on a lookout for opportunity, they are diligent in
seizing them and find innovative ways to tackle their challenge learn from mistakes and stay
focused on their vision. With the startup ecosystem in India on a roll, there is no reason why,
with the right ingredients, you shouldnt very well be on the road to success.

evolution and growth of startup in india

Key features of startup
A start-up is a new business which stands alone. Its not tied to any other or parent organization
except for the purpose of normal business activity. The business idea may not be necessarily new
but start-up itself is a new vehicle to exploit an idea. The existing enterprises, spinoffs {spinoff is
a new company or entity which is derived from a large firm and is controlled directly or remotely
by that large firm}, franchisees etc. Usually, the scope of start-up is linked to the willingness and
ability of an individual, who is also a founder of that start-up. The level of risk in start-ups varies
from zero-risk to a high and such risk is generally borne by the founder or people who are
involved has partners of the founder. Thus, a start-up may emerge as an individual proprietorship
or partnership firm or a private limited company and sometimes also as a cooperative.
Factors for Emergence and Start-up Routes
There are several factors for emergence of a start-up, which can be broadly classified into four
categories as follows:
As means of livelihood
As a result of policy support or inducement
In response to demand of large firms and market opportunities
As

result

of

innovative

idea

based

on

knowledge

and

experience.

The above four categories are not isolated but overlap with each other. Further, the start-ups can
spring up in traditional as well as modern manufacturing and service industries or in technology /
knowledge intensive industries and services. This implies that there are three parallel tracks for
start-ups
to
emerge:
Traditional Manufacturing Industries and services:
As cottage / household industries or handicraft artisans. These start-ups run exclusively on the
basis of household labour and employ no hired labour.
As small workshops which employ hired labour. This is scaled-up version of the cottage /
household industry.

In modern manufacturing industries and services:

As micro, small and medium enterprises (MSME) sector which are tagged so on the basis of
their scale of investments. In technology / knowledge intensive industries: Usually as
proprietorship
or
partnership
firms
or
as
companies.

Evolution of Start-ups in India

The earliest form of start-ups in India was the cottage industries which led to diversification of
the traditional economies from agriculture to industry and services. These included cottage
industries such as smiths, weavers, masons, artisans, carpenters etc. They catered to the non-food
needs of the rural population. The cottage industries played a decisive role in economic
diversification by generating non-farm employment. However, the industrial revolution in
Europe gave them major setback, and this system was almost replaced by factory based
industrialization. However, in India, these industries kept playing important albeit eclipsed role
in rural economies. Post-independence, the government efforts focussed more on heavy
industries but rural and cottage industry was given its due importance. In 1970s and 80s, such
traditional start-ups emerged in India in the form of livelihood based entrepreneurship called
Own Account Enterprises (OAEs). These OAEs have been a major employment generating
segments of the economy however, they are unregistered and unorganized. How to bring them
into organized sector is a major policy challenge.
However, the term start-up has become synonymous with third type of new ventures that started
appearing spontaneously post new industrial policy 1991. These Start-ups rose as a response to
the IT revolution, globalization which allowed freer movement of labour and capital between
countries and new market opportunities. These Start-ups have emerged into multiple sectors and

in multiple forms such as ICT industries, R&D, Technology Business Incubators (TBIs), Ecommerce ventures, Remote Education etc. The wave of these start-ups was such that it led to
the phenomena of reverse brain drain whereby the Indians employed abroad returned back to
the country and started these ventures. They have been duly supported by new forms of finances
such as venture capital, angel investors, private equities etc. Gradually, an ecosystem has
developed in India in cities such as Bengaluru, Mumbai, Gurgaon etc.
This

ecosystem

in

India

is

characterised

by

the

following:

A strong base of diversified sources of funding including venture capital, angel investors etc.
Conducive environment, for example the enactment of Limited Liability Partnership Act 2008
helped to create conducive legal environment while SME exchange platforms on BSE enabled
them early corporatisation and fund raising.
Promotion by big corporate such as Tata and industry bodies such as NASSCOM, and MNCs;
and presences of online resources such as websites, Start-up initiatives by technology/knowledge
intensive
companies
etc.

So what is a start-up and how is it different from any other traditional small business being
started?
A newly formed traditional company takes years to build its business, in terms of assets,
manpower and valuation, and relies on traditional sources of funding like loans from banks and
other sources like friends and family. The business in this case is less risky and has a greater
chance of success but is slow on building its company valuation.
On the other hand, a start-up is high risk business with a high probability of failure in its early
stage. The upside is that if it survives the early stage with a robust business model, the company
valuation tends to sky rocket in a relatively short time span. Sources of finance for start-ups vary
from venture capital companies, angel investors, early stage investors, accelerators and crowd
funding, all looking for the next big idea that can enable them exit in a few years, with a
handsome return on investment.

So what is really behind the success of the start-up ecosystem in India?

All factors that contribute in the success of a start-up are now abundantly available in India. Lets
take a look at some of the major factors.
a). Potential entrepreneurs with innovative ideas
Thanks to our IITs, IIMs and now emerging private universities, India today has a steady flow of
educated youth that is aware of developments around the world and is willing to dream big and
take the risk to convert that dream into a business plan, and finally, plunge into the high risk high
reward new age business. Same is true for established corporate executives who are now willing
to give up their well paid jobs to join the start-up army and let fly their entrepreneurial spirit. Its
the mindset that has changed, and now there seems to be no limit for an Indian who is more than
open to convert his big idea into the next big opportunity.
b). Sources of funding
Several funding options are now available. There are angel investors who are willing to back an
idea with no capital input from the entrepreneur. Then there are the early stage investors
($100,000 to $1 million) along with established venture capital firms that are willing to back a
new idea.
Once the initial round of funding graduates to the next level, there are private equity firms and
venture capital companies who are more than willing to extend large amounts ($1 million to $10
million), and then there are companies that focus on the 3rd round of funding for even higher
amounts.
In many cases, if the business model demonstrates a hockey stick growth curve, very serious
capital becomes easily available by the second round of funding. And now, the latest trend to
emerge is crowd funding. Here, ideas get advertised over social media, with request for fund
support, and investors the world over contribute small sums for a small equity in the business.
The investor in this case has the advantage of hedging his bets with a small amount and therefore
minimizing his risk, whereas the entrepreneur gets a collective amount that enables him to kick
start his business and hopes to scale up to the next round of funding, where venture capital firms
begin look at investing in the company.
In India today, all types of investors as mentioned above are now looking for investment
opportunities. In fact, a significant source of funding is actually coming from entrepreneurs from
previously successful start-ups, who have now reached a serious level of valuation in their own
businesses. This new breed of entrepreneur is willing to invest a part of his newly created wealth
into other start-ups to hedge their bets on the next big idea. All of these together are contributing
to the ecosystem for supporting start-ups.

c). Technology
Access to suitable technology has become easy and low cost, unlike in previous years. Today,
building an application in-house is easy, as there are plenty of tools and applications to write
code and there are enough technically qualified persons available to undertake any software
development or hardware integration. These, along with rapid growth of broadband and mobile
technology, are enabling factors that drive the start-up ecosystem.
d). Start-up incubators
The government, institutions and private companies, all recognise the need to encourage and
support innovative ideas and have now set up technology and innovation parks that have been
designed to offer complete infrastructure required by start-ups to launch their businesses. Even
educational institutions like the IITs have established technology incubators within their
campuses.
Technology incubators provide space between 500 sq ft to 1500 sq ft or as required by the
business. These come with complete office furniture and broadband connectivity to enable
entrepreneurs to get started from day one. Several IT Parks in smaller towns, like those in Kochi,
Jaipur and Ahmedabad, are fast emerging as nestling grounds for young entrepreneurs to launch
their business.

https://www.entrepreneur.com/article/249417
http://pestleanalysis.com/swot-and-pest-analysis-in-startups/
http://www.nasscom.in/india-fastest-growing-and-3rd-largest-startup-ecosystem-globallynasscom-startup-report-2014
http://www.gktoday.in/blog/start-up-meaning-and-evolution-of-start-ups-in-india/

http://www.mapsofindia.com/my-india/business/the-rise-of-the-start-ups-in-india-andtheir-success