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Tax sops for angel investment will boost PM's start-ups initiative: Google
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Top Stories |
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Aparajita Gupta | 09 Feb, 2016
As Prime Minister Narendra Modi gears up to give a shot in the arm to
start-ups with the launch of 'Start-up India, Stand up India' initiative
on Saturday, Google India feels friendly policies, encouragement to the
existing start-ups and adequate infrastructure would provide an impetus
to newcomers.
It also suggests that tax incentives would go a
long way in supporting entrants. "Tax-free investment for angel money
for three years will help start-ups," Sunil Rao, head of start-up
ecosystem, Google India, told reporter in an interview in New Delhi.
"The
ecosystem will get a real boost with start-up friendly policies that the
government may announce. Secondly, if the government provides
encouragement to people who have been flourishing in the existing
ecosystem, like recognising them and giving them a good platform, will
be great. That will motivate others to go ahead," Rao said.
The
industry also expects the government to make exiting easier if a venture
does not work, so that new start-ups could be floated.
Google
mentors start-up companies across the world, providing them with
assistance and seeing them through their teething troubles. In India,
Google started this programme around three years back. It has so far
trained 70 companies in early stage and an additional 70 under the
Google Launchpad programme. By 2016, it would have trained 16 more under
the Google Accelerator programme.
The company is also planning
to start an advanced stage programme soon for start-up firms which have
already raised some funding.
Rao mentioned that the mortality
rate of start-up ventures in India is high. "Around 60 percent of the
start-ups don't last more than 18 months. But it is globally in tune
with similar countries like Indonesia, Brazil and Latin America. And the
good thing is out of this 60 percent, around 50 percent companies start
another venture," he said.
Rao attributed the high mortality
rate to inadequate due diligence that the entrepreneurs do before they
start the venture. "They don't do sufficient due diligence about product
or market fit," Rao said.
He suggested that to become a
successful entrepreneur, young entrepreneurs should spend six to eight
months to validate the ideas before starting.
Saying that
strategising the business model well before the launch is crucial, he
added that Indian start-up market is now at a stage where China was five
years back.
"The future of start-ups in India is bright. I can
compare this to the what China was five years back. More and more
Chinese companies are working and developing apps for the China market
and not for the western market. Even in India, we have seen in the last
two years that the survival rate of start-ups providing products for the
local market is much higher."
(Aparajita Gupta can be reached at aparajita.g@ians.in)
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